XM Radio 2012 Annual Report Download - page 36

Long-term Incentive Compensation
The Compensation Committee grants long-term incentive awards to directly align compensation for our
named executive officers over a multi-year period with the interests of our stockholders by motivating and
rewarding actions that enhance long-term stockholder value. The Compensation Committee determines the level
of long-term incentive compensation in conjunction with total compensation provided to named executive
officers and the objectives of the above-described compensation program. Long-term incentive awards have
historically represented a significant portion of our named executive officers’ compensation, thus ensuring that
our executives have a continuing stake in our success, aligning their interests with that of our stockholders and
supporting the goal of retention through vesting requirements and forfeiture provisions.
In recent years, long-term compensation was granted solely in the form of stock options. Stock options have
an exercise price equal to the market price on the date of grant, and therefore provide value to the executives if
the executives create value for our stockholders. In addition, stock options generally vest over a period of four
years and are generally subject to the executive’s continued employment, which incentivizes the executives to
sustain increases in stockholder value over extended periods of time. The specific 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. No long-term
compensation was awarded to any named executive officer in 2012.
For future long-term incentive awards, the Compensation Committee may consider, in light of current
market factors and the status of our business and financial prospects, granting awards that consist of a mix of
stock options, restricted performance share units and restricted shares.
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 a matching component for 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 homes 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.
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