The answer: More than you could guess. SIRIUS Satellite Radio (SIRI) has announced that it exceeded pre-Howard Stern subscriber estimates for 2006 by more than 2 million members. Based on this target agreed to back in October 2004, Sirius delivered to affiliates of Stern 22,058,824 million shares of common stock, valued at approximately $82.9 million. The company said that expenses related to this payment have been reflected in its operating results throughout 2006.
22 million shares, and almost $83 million? Hasn’t he already collected like $500 million in stock option payments? This redefines the term SHOCK JOCK. Stranger things have happened, I guess. ou can’t say that the company should back out of this, because that is the deal they signed. But other companies might raise their eyes at such payment. If XM Satellite Radio (XMSR) has any interest in a merger with Sirius, they might want to be eyeinging bonus payment agreements for down the road. You also have to wonder what Stern and other talent and management would get in accelerated options via a come-along or chang in control clause in any such deal.
Jon C. Ogg
January 9, 2007
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