Sirius Explains Proposed Stock Split; Executive Pay Increases
March 31, 2010 at 4:31 AM (PT)
SIRIUS XM has filed a Schedule 14A Preliminary Proxy Statement with the SEC, and in it, covers information on their proposed stock split as well as executive compensation. Regarding a proposed stock split, SIRIUS XM writes:
"Why are you seeking approval of the authority to effect a reverse stock split?
On SEPTEMBER 15th, 2009, we received notice from the NASDAQ STOCK MARKET that our common stock had closed below $1.00 per share for 30 consecutive business days and was therefore not in compliance with the NASDAQ Marketplace Rule that requires the $1.00 per share minimum closing bid price. On MARCH 16th, 2010, we received a letter from the NASDAQ staff stating that we had not regained compliance with the $1.00 minimum closing bid price requirement for continued listing under NASDAQ Listing Rule 5450(a)(1) during the allowed grace period. We have been granted a hearing before a NASDAQ Hearings Panel to appeal the staff’s determination. This request automatically stayed any action to delist our common stock from The NASDAQ GLOBAL SELECT MARKET until the hearing procedures have concluded. The purpose of any reverse stock split would be to increase the per share trading value of our common stock above $1.00 if necessary to comply with such rule. We meet all of the NASDAQ GLOBAL SELECT MARKET’s continued listing criteria, other than the minimum bid price requirement. Our board of directors intends to effect the reverse stock split only if the implementation of the reverse stock split is determined by the board of directors to be in the best interests of the company and its stockholders."
On executive pay, SIRIUS XM writes:
"Changes in market conditions and our business caused us to make adjustments to our compensation program in 2008 and 2009. Key matters addressed by the Compensation Committee in 2009 with respect to the compensation of our named executive officers included the following:
* new employment agreements with Messrs. KARMAZIN, GREENSTEIN, MEYER and DONNELLY, providing for increases in their base salaries effective in 2010 and grants of options related to the execution of the agreements;
* cancellation of our discretionary annual bonus program for 2008;
* determination of our discretionary annual bonuses for 2009; and
* creation of a retention-based short-term incentive program during 2009 as a means to retain employees while conserving cash.
During 2009, our Compensation Committee approved an increase in the base salary of Mr. KARMAZIN for the first time since he joined us in 2004. Mr. KARMAZIN’s base salary was increased to $1,500,000 from $1,250,000, effective JANUARY 1st, 2010. The Compensation Committee believed the increase was appropriate following the successful completion of the merger and integration of the two companies and as part of an agreement to extend his employment.
Our Compensation Committee also approved increases in the base salaries of Messrs. GREENSTEIN, MEYER and DONNELLY beginning in 2010 as part of agreements to extend their employment. The Compensation Committee believed these increases were necessary to assist us in remaining competitive in the labor market and to compensate the executives for increased responsibilities brought about by the merger and changing economic conditions. Effective JANUARY 1st, 2010, Mr. GREENSTEIN’s base salary was increased to $925,000 from $850,000, Mr. MEYER’s base salary was increased to $1,100,000 from $950,000, and Mr. DONNELLY’s base salary was increased to $575,000 from $525,000."