XM Radio 2010 Annual Report Download - page 39

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• increasing our 2010 revenue by 13.9% over 2009 levels;
• growing ARPU by 7% as compared to 2009;
• increasing free cash flow by 14% to $210 million despite capital expenditures in 2010 that were
$63 million over 2009 levels;
• reducing our monthly average churn;
• negotiating new programming agreements;
• overseeing the successful construction, launch and commission of our XM-5 satellite;
• creating a corporate culture that fosters quality, creativity and innovation to differentiate our content
and services;
• adding compelling content to our services while reducing programming expenses; and
• establishing Sirius XM as the second largest subscription-based media company in the United States.
Policy with Respect to Internal Revenue Code Section 162(m)
In developing the compensation packages for the named executive officers, the Compensation Committee
considered the deductibility of executive compensation under Section 162(m) of the Internal Revenue Code.
Section 162(m) generally disallows a tax deduction for compensation that we pay to our Chief Executive
Officer or any of the next three most highly compensated executive officers (other than our Chief Financial
Officer) to the extent that the compensation for any such individual exceeds $1 million in any taxable year.
However, this deduction limitation does not apply to compensation that is “performance-based” under
Section 162(m).
In 2011, the Compensation Committee adopted a plan applicable to annual bonuses for our Chief
Executive Officer and the four most highly compensated executive officers, other than our Chief Financial
Officer. The Committee anticipates that this plan will result in tax deductibility for any compensation we pay
to such executive officers that exceeds $1 million in any taxable year. However, the Compensation Committee
may from time to time approve compensation that is not deductible under Section 162(m) if it determines that
it is in our best interest to do so.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis
with management. Based on such review and discussion, we recommended to the board of directors that the
Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into
our annual report on Form 10-K for the year ended December 31, 2010.
Compensation Committee
LAWRENCE F. GILBERTI,Chairman
JAMES P. H OLDEN
JACK SHAW
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