Sirius XM Sets Poison-Pill Plan
May 1, 2009 at 5:14 AM (PT)
SIRIUS XM said it has adopted a stockholder rights plan in what appears to be an attempt to fend off any hostile takeover of the company, reports THE STREET.COM, which writes that "under the plan, if any person or group acquires 4.9% or more of the outstanding SIRIUS XM shares without the approval of the company's board of directors, a significant dilution in the voting and economic ownership of the person or group would occur, SIRIUS XM said late WEDNESDAY."
"This rights plan protects the interests of all stockholders and preserves these substantial tax benefits for the Company," said CEO MEL KARMAZIN in a statement.
"While the market seemed to take the announcement as a poison-pill plan, KARMAZIN was careful to point out the rights plan is intended 'to enhance stockholder value' and that the company did not implement it 'for defensive or antitakeover purposes.'"
No Bonus For Mel
"CEO MEL KARMAZIN has received his fair share of criticism in 2009, writes TODAY's WASHINGTON POST, "mainly for taking on too much debt over the years and leaving his company in a cash crunch. We even called him out for making $7 million in 2007 while his stock dropped 23%. However, the good times may be over for now (or at least until the company solves its cash flow problems) and in 2008 no senior executive, including KARMAZIN, was paid a bonus -- either in cash or stock, according to an SEC filing. The only exception was CFO DAVID FREAR who was granted a bonus in restricted stock now worth about $100,000.
"KARMAZIN's salary remained flat at $1.125 million while sales head JAMES MEYER pulled in the next highest pay day at $945,834 (6% higher than last year). Content head SCOTT GREENSTEIN's salary increased about 7% to $845,834 in 2008.
"SIRIUS has had a rocky 2009. It nearly filed for bankruptcy in FEBRUARY, then received a lifeline in the form of an investment by LIBERTY MEDIA. Since then, the company reported lackluster fourth-quarter 2008 results and the stock has nearly quadrupled to $0.39.