Mel Karmazin gets raise, contract extension
Sirius board boosts salary, adds 120 million sharesWith its stock down 91% since he took over five years ago, the board of Sirius XM has given CEO Mel Karmazin a raise, extended his contract through 2012 and awarded him options for a hefty 120 million additional shares.
Karmazin, whose employment agreement had been set to expire in November, will see his salary boosted by $250,000 per year to $1.5 million.
The exercise price on his new stock options is 43 cents, which is where shares closed on Tuesday. On Wednesday, the stock moved 7% higher to 46 cents. When Karmazin was made CEO in November 2004, shares of Sirius were just under $5.
Karmazin, who signed on with Sirius shortly after Howard Stern said he was joining the company, has taken some drastic measures lately to keep the company afloat in the midst of huge debt brought on in part by Stern's $500 million, five-year salary and massive licensing fees paid to the NFL and other entities.
The CEO managed, after 18 months of wrangling with the FCC and antitrust regulators, to merge Sirius and XM last year, and this year raised as much as $530 million by selling a chunk of the company to Liberty Media. The company also recently announced that a $1.98 per month music royalty fee will be charged to subscribers beginning next month.
Sirius XM boasts 18.6 million subscribers, but in May it reported the company's first-ever quarterly loss of subscribers on a sequential basis.