Sirius XM President Scott Greenstein Extends Employment Deal Through 2016

Sirius XM Satellite Radio Logo - H 2011

Sirius XM Satellite Radio Logo - H 2011

The satellite radio executive gets $6 million in new stock options but loses a golden parachute benefit.

On Monday, Siriux XM entered into a new employment agreement with Scott Greenstein, president and chief content officer at the company. The deal extends his service to the company until at least 2016.

As part of the agreement, Greenstein will continue to earn $1.25 million in base salary. He'll also be given the opportunity to earn up to $1.88 million in additional bonus money. Greenstein is also being given $6.5 million in stock options as well as $1 million in restricted stock.

What's different about the latest employment contract, according to a security filing by Sirius XM, is that Greenstein's employment contract "no longer provides for a so-called golden parachute excise tax gross-up."

About 30 years ago, Congress put a 20 percent tax on certain golden parachute benefits. To make things more favorable to corporate executives, many companies attempted to insulate their leaders from potentially having to lose any money in taxes. The benefit has recently been subject to scrutiny from shareholders and others. For example, when Congress bailed out financial institutions a few years ago, banning golden parachute excise tax gross-ups were a condition for getting government money.

The amount of compensation that outgoing Sirus XM executives have earned in the past has also raised eyebrows.

For example, when Mel Karmazin, the former CEO who had once called himself "one of the most underpaid executives in history," left the company, he exercised stock options for a $244.3 million gain, on top of the nearly $11 million he was being paid.

If Greenstein, who once worked at Miramax and has been credited with bringing Howard Stern to the satellite radio service, is terminated before 2016, he could be eligible for a lump sum severance payment that's equal to his base salary plus the last bonus paid to him, according to the company's latest security filing.