XM Radio 2011 Annual Report Download - page 36

number of options granted is determined by the Compensation Committee with the assistance of our Chief
Executive Officer (other than in the case of any stock options award to himself) and by using their informed
judgment, taking into account the executive’s role and responsibilities within the Company and the overall
performance of the Company and our common stock, and is not based on any specific quantitative or qualitative
factors. As part of the process, the Compensation Committee also considered the value and structure of the
awards as a retention tool.
Retirement and Other Employee Benefits
We maintain broad-based benefits for all employees, including health and dental insurance, life and
disability insurance and a 401(k) plan, including the matching component of that plan. Our named executive
officers are eligible to participate in all of our employee benefit plans on the same basis as other employees. We
do not sponsor or maintain any other retirement or deferred compensation plans for any of our employees in
addition to our Sirius XM 401(k) plan.
Perquisites and Other Benefits for Named Executive Officers
The Compensation Committee supports providing other benefits to named executive officers that, except as
to Mr. Meyer under the terms of his employment agreement, are substantially the same as those offered to our
other full time employees and are provided to similarly situated executives at companies with which we compete
for executive talent.
Due to Mr. Meyer’s principal residence being in Indianapolis, Indiana, we reimburse Mr. Meyer for the
reasonable costs of an apartment in the New York metropolitan area and other incidental living expenses, up to a
maximum of $5,000 per month for rent. We also reimburse Mr. Meyer for the reasonable costs of coach class
air-fare from his home in Indianapolis, Indiana, to our offices in New York City. We pay Mr. Meyer an
additional amount to hold him harmless as a result of any federal, state or New York City income taxes imputed
in respect of the expenses for which he receives reimbursement. The costs of these benefits for Mr. Meyer
constitute less than 10% of his total compensation.
Payments to Named Executive Officers Upon Termination or Change-in-Control
The employment agreements with our named executive officers provide for severance payments upon an
involuntary termination of employment, including involuntary terminations following a change-in-control. These
arrangements vary from executive to executive due to individual negotiations based on each executive’s history
and individual circumstances.
We believe that these severance and change-in-control arrangements mitigate some of the risk that exists for
executives working in our highly competitive industry. These arrangements are intended to attract and retain
qualified executives who could have other job alternatives that may appear to them, in the absence of these
arrangements, to be less risky, and such arrangements allow the executives to focus exclusively on the
Company’s interests.
We believe that severance payments in connection with a change-in-control transaction are necessary to
enable key executives to evaluate objectively the benefits to our stockholders of a proposed transaction,
notwithstanding its potential effects on their own job security.
Fiscal Year 2011 Pay Implications
2011 Base Salary Decisions
During 2011, as part of an agreement to extend his employment, the Compensation Committee approved an
increase in the base salary of Mr. Frear beginning in July 2011 from $750,000 to $850,000. As part of an
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