Sirius Satellite Radio Inc. chief Mel Karmazin earned himself a comfortable $32.2 million in 2007, according to the company's recent SEC 10-K/A filing. That's $2 million more than XM's executive management team, combined.

While Karmazin's base salary of $1.25 million did not change in 2007, the company awarded its CEO an $4 million bonus. The year prior, the company awarded Karmazin a $3 million bonus.

Add in other compensations, stock awards and option awards last year, and his total compensation package tops out over $32.21 million.

Compare this to XM Radio's entire executive management team - which includes the compensation paid to former-CEO Hugh Panero - and Mel Karmazin beats their combined total by $2.3 million.

[Form 10-K/A]

Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc. have both announced that they have postponed their 2008 annual meeting of stockholders.

The meetings were originally scheduled for May 20th and May 23rd for Sirius and XM respectively. A new date will be set when they have more information relating to the timing of the merger.

New Citi analyst Tony Wible issued a client note this morning, assuming coverage of the satellite radio industry with a "Buy" on Sirius Satellite Radio Inc. and a "Hold" on XM Satellite Radio Holdings Inc.

"Satellite radio should continue to change the audio entertainment industry and gain share as its proves to be fresh (no need to create play lists or buy MP3s), original, cost effective, and a simple way to access premium/long tail content that can not be supported via radio or MP3 models," wrote the Citi analyst in the note. "Given the highly fixed cost base of the companies, we view the sub growth as the key driver of the stocks and we see the industry having up to 55 mil subs by 2011."

Wible also rated SIRI as a "Buy" with an $8 target based on a 70% probability that the deal closes. He rates XMSR with a "Hold" with a $12.25 target price.

The Citi analyst believes that the SIRI stock - as a merged entity - would be worth $10.

The perpetual delays in getting the approval from the Federal Communications Commission may be the least of worries for Sirius and XM.

TheStreet is reporting that analysts are expecting XM Satellite Radio Holdings Inc., which TheStreet says is set to release its results on Thursday, to post a loss of 39 cents a share, according to a Thomson First Call survey. Sirius Satellite Radio Inc. is expected to lose 7 cents a share as well, when it reports on April 29th.

Shares of Sirius and XM have fallen more than 15% since the last reporting quarter's results in late February.  

"Excluding the merger proposal, we do not believe the fundamentals, subscriber growth curves, or risk-adjusted estimates support a premium or equal valuation for Sirius versus XM," wrote Goldman Sachs analyst Mark Wienkes in a February 26th research note, adding that "trends in subscriber adds, churn, and [average revenue per subscriber] confirm our cautious view on the industry."

For Sirius, increases in the churn rate and subscriber acquisition costs (SAC) are what especially trouble analysts, especially in a troubled economy. Monthly churn is expected to rise slightly from 2.3% in the fourth quarter. At the same time, SAC will likely rise from $90 to a range of $95 to $100, according to several analysts. Inreasing churn and growing SAC are also a concern for XM.

But it's the concern of transforming from a retail-based business model to an OEM-driven model that seems to be the most troublesome, according to TheStreet.

Penetration rates have increased in the automotive sector, but in March auto sales fell 12 percent from a year earlier on an unadjusted basis.

"Recent comments from the automotive industry indicate that many of the issues impacting the subprime [and collateralized debt obligation and loan obligation] market are projected to trickle down and carry negative implications on new car sales, implying around 15 to 16 million units sold in 2008," said Goldman's Wienkes. "As satellite radio operators progress toward an OEM-centric model, watch for primary and derivative effects of a housing and auto slowdown to temper the subscriber ramp."

What TheStreet doesn't mention is that Sirius and XM aren't blind to this, and have said that the increasing penetration rates will offset the declines in auto sales. Whether or not this holds to be true will be seen soon enough.

Analysts also anticipate that the conversion from OEM promotional subscribers will decline - although during the fourth quarter the conversion rate actually increased from 52.4% to 53.9% year over year. For the full-year though, the conversion rate fell slightly from 53.3% in 2006 to 52.7% in 2007.

"Sirius installs will approach 70% of manufactured cars at Chrysler and Ford by year-end 2009 with penetration in other models such Volkswagon and Audi approaching 80%," said RBC Capital Markets analyst David Bank in a note in February. "But the outlook for auto sales is soft, and retail ... demand is anemic, so near-term upside to subscription estimates is probably limited."

As for average revenue per user, or ARPU, TheStreet says that Sirius is expected to see ARPU tick higher in the first quarter, many analysts expect it to go down for XM. And in the event the merger gains FCC approval, ARPU is not expected to improve much as the time progresses.

"We assume no ARPU synergies as the combo may have to agree to price restrictions to get a deal done," said Stifel Nicolaus analyst Kit Spring in a March 25 research note. "We calculate a net ARPU impact over time of a negative 2% to 5%, getting worse over time as the percentage of radios that are a-la-carte capable increase."

[TheStreet]