XM Radio 2008 Annual Report Download - page 162

disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Ernst &
Young, would have caused it to make reference to the subject matter of the disagreements in connection with
its report, nor were there any “reportable events” as such term is described in Item 304(a)(1)(v) of
Regulation S-K, promulgated under the Securities Exchange Act of 1934, as amended.
We requested Ernst & Young to review the disclosures contained in the preceding two paragraphs and
asked Ernst & Young to furnish us with a letter addressed to the SEC stating whether it agreed with those
statements contained herein. We filed a copy of Ernst & Young’s letter as an exhibit to a Current Report on
Form 8-K dated September 25, 2008.
The board of directors unanimously recommends a vote “FOR” the ratification of KPMG LLP as
our independent registered public accountants for 2009.
Item 6 — Stockholder Proposal on advisory vote on executive compensation.
We have been advised that Michael Hartleib (the “Proponent”) has submitted a stockholder proposal for
consideration (the “Stockholder Proposal”) at the annual meeting. The Proponent’s address is 24892 Hollow
Circle, Laguna Niguel, California 92677. The Proponent has represented to us that he beneficially held in
excess of 100,000 shares of our common stock as of December 16, 2008. We are not responsible for the
contents of the Stockholder Proposal or the accuracy thereof. Our board of directors unanimously recommends
a vote “AGAINST” the following Stockholder Proposal.
Stockholder Proposal
RESOLVED, that stockholders of Sirius XM Satellite Radio urge the board of directors to adopt a policy that
Sirius XM Satellite Radio stockholders be given the opportunity at each annual meeting of stockholders to vote on
an advisory resolution, to be proposed by Sirius XM Satellite Radio’s management, to ratify the compensation of
the named executive officers (“NEOs”) set forth in the proxy statement’s Summary Compensation Table (the
“SCT”) and the accompanying narrative disclosure of material factors provided to understand the SCT (but not the
Compensation Discussion and Analysis). The proposal submitted to stockholders should make clear that the vote is
non-bindingandwouldnotaffectanycompensationpaidorawardedtoanyNEO.
Supporting Statement
Investors are increasingly concerned about mushrooming executive compensation which sometimes
appears to be insufficiently aligned with the creation of stockholder value. Additionally, recent media attention
to questionable dating of stock options grants by companies has raised related investor concerns.
The SEC has created a new rule, with record support from investors, requiring companies to disclose
additional information about compensation and perquisites for top executives. The rule has now been in effect
for over a year. In establishing the rule the SEC has made it clear that it is the role of market forces, not the
SEC, to provide checks and balances on compensation practices.
We believe that existing U.S. corporate governance arrangements, including SEC rules and stock exchange
listing standards, do not provide stockholders with enough mechanisms for providing input to boards on senior
executive compensation. In contrast to U.S. practices, in the United Kingdom, public companies allow stockholders
to cast an advisory vote on the “directors’ remuneration report,” which discloses executive compensation. Such a
vote isn’t binding, but gives stockholders a clear voice that could help shape senior executive compensation.
Currently, U.S. stock exchange listing standards require stockholder approval of equity-based compensa-
tion plans; those plans, however, set general parameters and accord the compensation committee substantial
discretion in making awards and establishing performance thresholds for a particular year. Stockholders do not
have any mechanism for providing ongoing feedback on the application of those general standards to
individual pay packages. (See Lucian Bebchuk & Jesse Fried, Pay Without Performance 49 (2004)).
Similarly, performance criteria submitted for stockholder approval to allow a company to deduct
compensation in excess of $1 million are broad and do not constrain compensation committees in setting
performance targets for particular senior executives. Withholding votes from compensation committee
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