XM Radio 2010 Annual Report Download - page 36

Executive Officer recommended to the Compensation Committee individual bonus amounts, taking into
account the responsibilities and contributions of each individual during the year and our performance. These
amounts were reviewed and discussed with the Compensation Committee by our Chief Executive Officer and,
following consideration by the Compensation Committee, the amounts were approved or modified. For the
Chief Executive Officer, the Compensation Committee reviewed his performance for the year, determined that
he should receive a bonus and determined the bonus amount, which amount was then reviewed and approved
by the board of directors. The Compensation Committee determined that the bonuses to our named executive
officers would be paid in cash. The bonus awards to our named executive officers are described below and are
reflected in the Summary Compensation Table.
Payment of Discretionary Bonuses for 2010. The annual bonus for Mr. Karmazin is discussed below
under “Related Policies and Considerations — Compensation of our Chief Executive Officer.”
Mr. Greenstein was awarded a bonus for his contributions during the year, including his role in the
continued enhancement of our programming, such as the negotiation of a new agreement with the NFL;
securing and creating additional compelling and exclusive content, such as Rosie Radio, Dr. Laura Schles-
singer and our Fantasy Sports channel; reducing the costs of certain programming and streamlining and
introducing efficiencies into our programming operations; reducing our churn; the sale of advertisements on
our non-music channels and contribution to our sale of “best of” programming packages; refining our brand
awareness; and understanding and analyzing customer satisfaction levels as they relate to our programming
and content offerings.
Mr. Meyer was awarded a bonus for his contributions during the year, including his role in our addition
of over 1.4 million net subscribers in 2010; generating $210 million in free cash flow; reducing subscriber
churn and introducing systems and processes to assist in understanding overall subscriber churn; increasing
monthly average revenue per user; increasing our self-pay conversion rate; reducing subscriber acquisition
costs; introducing and marketing new data services; overseeing the development of our transmission and radio
technology; building our business in pre-owned vehicles, including establishing agreements with automakers
for certified pre-owned programs; and the continuing integration of our legacy operations.
Mr. Donnelly was awarded a bonus for his contributions during the year, including his regular on-going
contributions as our general counsel, such as the management of complex legal and regulatory issues; his role
in managing and attempting to reduce our legal expenses in face of the increasing complexity of our business;
assisting in the negotiation and execution of various agreements with programming providers and other
essential third parties; and his efforts in the continued integration of our legacy operations, including the
continuing integration and rationalization of our legal staff to meet our current and future needs.
Mr. Frear was awarded a bonus for his contributions during the year, including his regular on-going
contributions as our chief financial officer and his role in increasing our adjusted EBITDA by 35%; increasing
our free cash flow by 14% to $210 million; successfully managing balance sheet opportunities to replace
certain high cost debt with more attractive financing; managing the construction, launch and commissioning of
our XM-5 satellite; overseeing our investments in XM Canada and SIRIUS Canada and negotiating the
pending combination of those companies; and his efforts in the continued integration of our legacy operations,
particularly in the areas of information technology and financial planning and reporting.
Ms. Altman was awarded a bonus for her contributions during the year, including her regular on-going
contributions as our chief administrative officer and her role in managing our human resources function, and
facilities and security operations; supervising the evaluation, management and consolidation of our real estate
holdings; overseeing our DC-based operations; and her role in the continued integration of our legacy
operations.
Based on the foregoing, the Compensation Committee approved the specific bonus amount set forth in
the Summary Compensation Table for each of the above named executive officers.
2011 Considerations. In 2011, the Compensation Committee intends to determine the overall bonus
funding for our employees (other than the named executive officers) by evaluating our performance against
our 2011 business plan as approved by our board of directors, including operating metrics such as total
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