XM Radio 2009 Annual Report Download - page 25

Compensation Committee may not employ the same process, or may adopt a modified or wholly different
process, in making future bonus decisions.
• After the end of the year, the Compensation Committee evaluated our actual performance against a
variety of operating metrics to determine the appropriate funding of a bonus pool for all employees. In
measuring our performance, the Compensation Committee exercised its judgment as to whether to
reflect or exclude the impact of changes in accounting principles, extraordinary, unusual or infrequently
occurring events reported in our public filings, and changes approved from time to time by the board
outside of the original 2009 operating budget. In determining the bonus pool, the Compensation
Committee also considered a variety of additional accomplishments and factors that it believed were
relevant.
• Following a consideration of overall annual performance, additional accomplishments and other factors
the Compensation Committee deemed relevant, the Compensation Committee determined an aggregate
bonus pool for all employees. For named executive officers (other than himself), our Chief Executive
Officer recommended to the Compensation Committee individual bonus amounts, taking into account
the responsibilities and contributions of each individual during the year. These amounts were reviewed
and discussed with the Compensation Committee by our Chief Executive Officer and, following
consideration by the Compensation Committee, the amounts were approved or modified. For the Chief
Executive Officer, the Compensation Committee reviewed his performance for the year, determined he
should receive a bonus and determined the bonus amount.
In 2010, the Compensation Committee intends to determine the overall bonus funding by evaluating our
performance against our 2010 business plan as approved by our board of directors, including operating metrics
such as total subscribers, cash, revenues, EBITDA, SAC per gross addition, churn, operating expense growth,
and other factors that it determines are appropriate.
Year 2008 Decisions. The Compensation Committee did not award any bonuses with respect to the year
ended December 31, 2008 in light of the economic environment and concerns regarding our liquidity.
Year 2009 Decisions. Following the process described above, including considering our performance,
additional accomplishments and other factors it deemed relevant, the Compensation Committee determined
that it was appropriate to award bonuses for 2009 and approved a bonus pool to be divided among employees.
The Compensation Committee also determined that it was appropriate to award bonuses for 2009 to our named
executive officers (the bonuses are described below and are reflected in the Summary Compensation Table)
and determined that the bonuses to our named executive officers for 2009 would be paid in cash.
The annual bonus for Mr. Karmazin is discussed below under “Compensation of our Chief Executive
Officer.”
Mr. Greenstein was awarded a bonus for his contributions during the year, including his role in the
continued enhancement of our programming and the marketing efforts which supported our brand awareness
and customer satisfaction levels, the renegotiation and extension of various programming agreements resulting
in extended terms and significant cost reductions, the launch of the SIRIUS XM application for the iPhone
and iPod touch, and the successful integration of the legacy SIRIUS and XM operations resulting in significant
synergies.
Mr. Meyer was awarded a bonus for his contributions during the year, including his role in the company
being cash flow positive for full year 2009, the reduction of operating expense growth, the stabilization of
self-pay churn levels and improvement in customer save rates, the reduction in subscriber acquisition costs per
gross addition, the launch of the SIRIUS XM application for the iPhone and iPod touch, the improvement in
automaker penetration, the negotiation of extensions and amendments of our agreements with various
automakers, and the successful integration of the legacy SIRIUS and XM operations resulting in significant
synergies.
Mr. Donnelly was awarded a bonus for his contributions during the year, including his regular on-going
contributions as our general counsel, and his role in the successful restructuring of our capital structure,
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