An SEC filing from Sirius XM Radio today reveals that Mel Karmazin, the company’s Chief Executive Officer has signed a new contract extending his term through and until Dec 31,2012.
Under the terms of the new deal, Mr. Karmazin which:
- increases his base salary from $1,250,000 per year to $1,500,000 per year beginning on January 1, 2010
- provide for the grant of an option to purchase 120,000,000 shares of SIRI common stock, at an exercise price of $0.430 per share (the closing price of SIRI on June 30, 2009)
In my opinion, the company has made a fantastic move by taking care of this nagging issue. This will obviously silence those critics of Mr. Karmazin who speculated that his days of running Sirius XM were numbered. I have been witness to many such attacks on Mr. Karmazin from many opposing fronts.
History teaches us that where Mel Karmazin goes, Howard Stern goes. And vice-versa. I believe the attacks on Mel by the competition were made simply to get Howard Stern removed from Satellite Radio. Anyone who takes the time to research Howard Stern and Mel Karmazin can see clearly, that there is no greater influence on Howard Stern’s own contract negotiations, than Mel Karmazin.
There is no doubt in my mind, that without Mel Karmazin at the helm of Sirius XM Radio, that satellite radio would not exist today. As an investor and subscriber, giving Mr. Karmazin his first raise since he took the helm of Sirius XM is a fair way to thank the man for saving the company and putting it on a true path to profitability. Short sighted people tend to overlook these important aspects.
Position: Long SIRI
Correct on a lot of points except for one . . . let’s call like it really is. The attacks on Karmazin date back to his days of outpacing Nat’l Assoc Of Broadcasters (NAB) and their affiliated democratic lobbyists.
When Adelstein of the FCC said “jump through this hoop” to Karmazin, Karmazin was already through the next ten (hoops and rings of fire). Karmazin was (is) known for his prowess when negotiating with regulators. Adelstein detested this and went so far as to retract his commitment to go along with the SIRI/XM merger if Karmazin agreed to his conditions – he (Karmazin) did so, in writing, within a few days of that last (democrat) hurdle.
The issue then, is really not with Karmazin’s detractors, but rather a politically inspired assault. I admire this guy for his tenacity, drive and EXEMPLARY STAMINA. If you were to compare this to the Financial Sector’s leadership, RARE traits INDEED.
FInally. Givin the K-man the props he deserves for fighting the NAB and getting the merger done and then guiding the company thru the many land mines since then like the debt refinancing, BK scare, economic crisis and car industry meltdown.
I know there are a lot of sirius shareholders who’ve been frustrated, but Mel deserves some credit for keeping the company alive.
Perhaps now we can move on! This is good news. It removes ONE more “uncertainty” that the shorts can’t use anymore to bash the stock down. Little by little the shorts are losing their ammunition. We should be celebrating this news. We need consistency of vision, and Mel is the man who got us this far without going under. Now that things are slowly improving, he should be the one to carry us the rest of the way. Or at least until December of 2012.
Now we can focus on more important things. There is much to do, and YES, Mel should be held accountable from here on out. But I for one am enjoying the little signs, the glimmers of good news that are beginning to come in. It’s a nice change and I truly feel the tide is turning.
I firmly believe the shorts will soon be where the longs have been…if they don’t cover NOW.
Again, we’ve got a long way to go, but I am feeling good people. This is one long suffering long who is GLAD he didn’t sell, but has used the last few months to average down to below a buck. For the first time in a long time, making a profit is within reach. And SUBSTANTIAL gains aren’t pie in the sky fantasies.
So thanks Mel! And keep up the good work.
His teeth are really white. I guess he’s ok.
AIG just did a reverse stock split (1:20), then their stock DROPPED more than $5.00/share. RS is not good!!!!
Funny how the last week or so there has been very little or no negative news at all posted on the net regarding Sirius. Why the sudden drop of assault tactics against Sirius from the media? Have the shorts and bashers decided to call it quits or tone it down? Maybe the heat is on them now (the potential SEC investigation)? Also we are seeing snips of good news from Sirius the last 2 weeks about every two days. Pieces of the puzzle are now coming together to make out somewhat of an actual picture….I think its the Sirius dog with dollar bills signs in his eyes!
Personally, I’m not worried about a RS. I don’t think one is going to happen. I really don’t. Of course NOBODY knows for sure WHAT will happen in the future, I believe we make it over a buck all on our own this year. I see more and more good news coming and synergies increasing. I think more and more upgrades are coming and more institutions will buy in. The car industry will keep improving, and the day is coming when even….(wait for it)….GOLDMAN SACHS is going to upgrade Sirius XM. When THAT happens….it’ll be sweet revenge and sweet profits for the longs.
Also, if Cramer does a public Mea Culpa….then we’ll TRULY know that Hell has frozen over.
Lol. Seriously people. This is a GREAT time to be a long. Sure, some volatility is still ahead, but we’re going up. Things are lookin good.
Brandon
Nice article! Another positive for the company!
@bubba-ho-tep Ah yes, the infamous Jim Cramer….changes like the weather. I wonder what his inside motives were for saying “Sirius shouldn’t be a stock”? A shorter, no doubt!
I hope you’re right about the RS.
I like Mel C. He ‘ooks like an older BaBa Booey with better teeth.
Sorry, can’t spell….
I like Mel C. He looks like an older BaBa Booey with better teeth.
@Jay Fishmanb
J Fishman – incorrect about Cramer; he changes FASTER than the weather during the Midwest Tornado season. Late last year he was virtually upset at analysts for slamming Sirius and the FCC for interfering with the merger. Cramer? = mindless entertainment for corporate meetings.
b-ho-tep – “Synergies?” Like what, for instance?
After a good night’s rest, I awoke this morning with a new worry – or rather a concern. I am still happy about Mel being kept on and the recent upturn in SiriusXm….HOWEVER….I had a terrible thought…..
What if Mel waits to do a 1 for 50 reverse split before he exercises his 120 million options????!!!
Sure, it’d be GREAT for him, but a HUGE SLAP in the face for longs. The ULTIMATE insult.
My question is would such a move even be legal? Could Mel be sued for doing such a thing after putting loyal shareholders thru hell only to take away most of their shares while giving himself millions of shares at todays cheap prices?
In my gut, I don’t see Mel doing this after all his talk about shareholder value. For him to break such a promise would surely result in a mass outrage that would make Hartlieb’s look pale in comparison.
Anyway….just thinking. This is my last worry. Otherwise, I feel VERY confident about Sirius turning the corner now and us long suffering longs FINALLY seeing some daylight.
C-Levels doing any kind of a split, prior to exercising stock options would be grounds for an investigation. That’s it.
Other than that, class actions against companies are currently (last 2 years esp.) in vogue and an opt. Why, with class actions, I’ve actually heard of investors getting as high as $.10 (Cents) on the Dollar (of lost funds).
Mel and Howard were the reason I bought the stock. I followed them on FM and these guys don’t like to lose!
WE WON’T LOSE!