XM Radio 2015 Annual Report Download - page 41

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Base Salary
Base salaries for the named executive officers are determined consistent with the terms of their
employment agreements. The minimum amount of base salaries set forth in the employment
agreements and any increases over these amounts are determined by the Compensation
Committee based on a variety of factors, including:
•The nature and responsibility of the executive’s position and, to the
extent available and deemed relevant, salary trends for persons in
similar positions at comparable companies
Factors Affecting
Base Salary
Considerations
•The expertise, demonstrated leadership and management ability, and
past performance of the individual executive
•The executive’s salary history and total compensation, including other
cash bonus and stock-based awards
•The competitiveness of the market for the executive’s services
The Compensation Committee also considers the recommendations of our Chief Executive
Officer (except as to his own compensation). In setting base salaries, the Compensation Committee
also believes that the amount of base salary should be a relatively smaller portion of each named
executive officer’s overall compensation package, thereby aligning the interests of our executives
more closely with those of our stockholders.
Annual Incentives
•Annual bonuses take into consideration all factors relevant to the
company’s and an executive’s performance, including numerous
financial and operational metrics, without being limited by a purely
formulaic approach.
Annual
Incentives –
Annual Cash
Bonus Awards
•The Compensation Committee has awarded annual bonuses in cash,
but may award bonuses in cash, restricted stock, RSUs, stock options
or a combination thereof.
•None of our named executive officers are entitled to a guaranteed or
minimum bonus.
•Annual bonuses approved by the Compensation Committee for 2015
were intended to achieve two principal objectives: (1) link
compensation with corporate performance; and (2) reward our
named executive officers based on individual performance and
contributions to our success.
To guide the Compensation Committee in determining annual bonus amounts for the named
executive officers, in 2015 the Compensation Committee adopted a bonus plan that measures our
performance using various criteria, such as increases in subscribers, revenue, adjusted EBITDA and
free cash flow. This plan is used by the Compensation Committee as one set of factors, along with
other financial and operational metrics that the Compensation Committee deems relevant, in
evaluating and benchmarking bonus amounts for the named executive officers. A more detailed
description of the methodologies used by the Compensation Committee to determine the bonus
31