XM Radio 2013 Annual Report Download - page 35

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, while also ensuring the continued retention of our
named executive officers. 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 previous 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 2013, the Compensation Committee determined
that in light of current market conditions, long-term compensation for our named executive officers would
consist of both stock options and restricted stock units (“RSUs”). The value of RSUs increases or decreases in
conjunction with the price of our common stock, and also creates incentives for performance and further aligns
the executives’ interests with those of our stockholders. Stock options generally vest over a period of three or
four years in equal annual installments and RSUs vest on varying schedules. Both stock options and RSUs will
generally vest 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 and RSUs granted
is determined either as part of the employment agreement or by the Compensation Committee with the assistance
of our Chief Executive Officer (other than in the case of any equity awards to himself) and by using their
informed judgment, taking into account the executive’s role and responsibilities and our overall performance and
the performance of 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) savings 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
named executive officers in addition to our Sirius XM Radio Inc. 401(k) savings plan.
Perquisites and Other Benefits for Named Executive Officers
The Compensation Committee supports providing other benefits to named executive officers that are almost
identical to those offered to our other full time employees and are provided to similarly situated executives at
companies with which we compete for executive talent.
In limited circumstances, a named executive officer may receive certain tailored benefits. As part of
Mr. Meyer’s previous employment agreement, we reimbursed 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 reimbursed Mr. Meyer for the reasonable costs of coach class air-fare from his
homes to our offices in New York City. Further, we paid 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
received reimbursement. The costs of these benefits for Mr. Meyer constituted less than 10% of his total
compensation. These arrangements terminated and Mr. Meyer’s current employment agreement does not include
any obligation to reimburse him for living expenses or the costs of travel from his homes or to gross up any
payments we make to him. Mr. Rodriguez, due to his principal residence being in the State of Washington, is
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