Sirius Satellite Radio gave Howard Stern a bonus of 22 million SIRI shares valued at about 83 million! In 2005 they gave him 34 million shares. All this is over and above his 5 year 500 million dollar contract! If I were an investor in SIRI, I wouldn’t be too happy at all. For once I agree with Jim Cramer and would sell SIRI, which I thankfully do not own any. According to this article from Reuters, Stern filed to sell this entire 22 million shares and it seems he did the same thing with last years shares. If Stern doesn’t believe in his own ability to help Sirius at all (he files to sell everything, not just some part of it), why should anyone else?
Arguing the other way – Sterns bonus was based on new subscriber signup rate. Analysts predicted sirius to have 3.5 million subscribers by the end of 06 and the bonus would be triggered if the estimates were beaten by 2 million. Sirius ended with 6.1 million subscribers. How much do 2 million subscribers pay in a year?? – over 300 million!! If Sirius manages to retain all these customers, then maybe the deal is worth it with Stern (if he was what caused this increase in the first place).
My Take after looking at both sides of the story – still staying away from SIRI for now.
