Severance Deals Protect XM Executives
August 6, 2008 at 5:24 AM (PT)
Executives at XM SATELLITE RADIO INC. aren’t guaranteed jobs at the newly named SIRIUS XM INC., but they won’t suffer, writes the WASHINGTON BUSINESS JOURNAL. Key members of the company’s executive team are assured a cushy landing if they find themselves without work because of the merger thanks to severance agreements drawn up and approved in 2007 when the contentious battle to combine SIRIUS and XM started.
NATE DAVIS, the former CEO of XM, won’t be running the new company. At least not as CEO. If he leaves the company, he is guaranteed an estimated severance package worth as much as $10 million.
XM Chairman GARY PARSONS, who will continue as chairman at SIRIUS XM, would receive more than $9 million if he is fired or resigns. Agreements are in place for two other XM executives. EVP/CFO JOSEPH EUTENEUER will get $4.9 million. Chief Marketing Officer VERNON IRVIN will get $4.5 million.
"This is how you entice a business leader to take risk and protect their downside should a deal or transaction take place where their job is eliminated," said STOUT CAUSEY & HORNING GROUP Managing Partner CHRIS HELMRATH. "If you really want top CEOs, they can most times name their deal and [companies] need to live with the realities."