XM Radio 2010 Annual Report Download - page 53

Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation
(Item 4 on Proxy Card)
In accordance with the requirements of Section 14A of the Exchange Act (which was added by the Dodd-
Frank Act) and the related rules of the SEC, we are submitting for stockholder consideration a separate resolution
to determine, in a non-binding, advisory vote, whether a stockholder vote to approve the compensation paid to our
named executive officers should occur every one, two or three years. While the results of the vote are non-binding
and advisory in nature, the board of directors intends to consider the results of this vote.
After consideration, the board of directors has determined that an advisory vote on executive compensa-
tion that occurs every three years (triennially) is the most appropriate policy for us. Our reasons include:
• We value consistency and we do not expect our executive compensation program to change significantly
from year to year;
• In our view, our executive compensation program does not contain any significant risks that might be
of concern to our stockholders;
• A longer frequency is generally consistent with our long-term compensation objectives; and
• Our executive compensation program is designed to reward and incentivize long-term performance and
a triennial vote corresponds more closely with our long-term incentive awards, which typically vest
over a three or four year period.
We encourage our stockholders to evaluate our executive compensation program over a multi-year horizon
and to review our named executive officers’ compensation over the past three fiscal years as reported in the
Summary Compensation Table. We believe that a triennial advisory vote on executive compensation reflects the
appropriate time frame for our board of directors and Compensation Committee to evaluate the results of the most
recent advisory vote on executive compensation, to discuss the implications of that vote with stockholders to the
extent needed, to develop and implement any adjustments to our executive compensation program that may be
appropriate in light of a past advisory vote on executive compensation, and for stockholders to see and evaluate the
compensation committee’s actions in context. Because the advisory vote on executive compensation occurs after we
have already implemented our executive compensation program for the current year, and because the different
elements of compensation are designed to operate in an integrated manner and to complement one another, in
certain cases it may not be appropriate or feasible to fully address and respond to any one year’s advisory vote on
executive compensation by the time of the following year’s annual meeting of stockholders.
We have in the past been, and will in the future continue to be, engaged with our stockholders on a number
of topics and in a number of forums. We view the advisory vote on executive compensation as an additional, but
not exclusive, opportunity for our stockholders to communicate with us regarding their views on executive
compensation. In addition, because our executive compensation program has not typically changed materially
year-to-year and is designed to operate over the long-term and to enhance long-term performance, an annual
advisory vote on executive compensation could lead to a near-term perspective inappropriately bearing on our
executive compensation programs. We believe that holding an advisory vote on executive compensation every three
years will reflect the right balance of considerations in the normal course, but we intend to periodically reassess
that view and can provide for an advisory vote on executive compensation on a more frequent basis if changes in
our compensation program or other circumstances suggest that such a vote would be appropriate.
Stockholders will be able to specify one of four choices for this proposal on the proxy card: three years, two
years, one year or abstain. Stockholders are not voting to approve or disapprove the board’s recommendation. This
advisory vote on the frequency of future advisory votes on executive compensation is non-binding on the board of
directors. Notwithstanding the board’s recommendation and the outcome of the stockholder vote, the board may in
the future decide to conduct advisory votes on a more or less frequent basis and may vary its practice based on
factors such as discussions with stockholders and the adoption of material changes to compensation programs.
The board of directors recommends that stockholders vote “THREE YEARS” with respect to the
frequency with which stockholders are provided an advisory vote on the compensation paid to our
named executive officers.
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