Sirius XM Radio Inc. chief Mel Karmazin has voluntarily forfeited a total of 30 million SIRI stock options, the company said on Wednesday.The company said that decision to forfeit these options will allow it to "more efficiently" use the shares to "attract, motivate and retain key employees" as planned under its 2003 long-term incentive plan.
The options had an exercise price of $4.72 a share, according to the SEC filing.
Karmazin thankfully didn't receive any consideration in exchange for the forfeiture of these stock options. Upon forfeiture of these stock options, the shares underlying this award became available for grants.
Sirius XM Radio said of the total options, 24 million were vested and 6 million remain unvested.
[SEC Filing]
Sirius XM Radio said of the total options, 24 million were vested and 6 million remain unvested.
[SEC Filing]
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you cannot say that i am not a good business person. to exercise the options i would have lost about $4.40 a share, that's $120 million. say what you will about me but i am not stupid.
I know somehow people will still find a way to bash Mel for this too. Thank god for Mel, no one else could have pulled off what he did, not only in this economy, but also with the NAB and government in bed together trying to bankrupt the company. He doensn't get nearly enough credit.
Well, that's about as useless as a 2nd asshole
There's a big difference between "30 million stock options" and "30 million *in* stock options". The latter would be significantly more valuable to Mr. Karmazin, and probably has a lot to do with why he forfeited them in the first place.
Wall Street, rejoice. There are now 30 million more near-worthless sheets of paper floating around since Mel no longer has dibs on them.
Invest this into the PUNK channel
"The company said that decision to forfeit these options will allow it to "more efficiently" use the shares to "attract, motivate and retain key employees" as planned under its 2003 long-term incentive plan."
Yeah, they're doing a great job making O&A happy right now. Free Howard on XM for a week, but not free O&A on Sirius? SO Mel, it's just like the old days where Howard is THE show? Don't think so. You really need to stop making satellite radio into terrestrial....
Mel ... Man of the People. Of course, forfeiting options vesting at $4.72 when the stock is trading at 35 cents might suggest something else.
Mel Karmazin is a cunt!
How about he forfeits himself out of media.
Wait.. mel does something that is good for a company he is employeed at and you call him a cunt? Yeah, that sounds rational.
How exactly did Mel do something to help SiriXM?
He just saved himself from losing a boatload of money by paying almost 13 times as much as necessary. Mel is saying he believes the stock will never again reach 4.72 a share.
Credit for What? Seriously, credit for what exactly? The stock price, diluted product qualilty, fleeing subscriber base. Please be specific for why Mel deserves any accolades?
Keep telling yourself he's doing something good for the company. Those stock options were essentially worthless and you can bet it didn't effect his net worth. A drop in the bucket for someone who has more money than he'll ever be able to spend. Publicity stunt to impress stockholders. The guy is a senior citizen who is completely out of touch. He's running satellite radio like it's FM radio twenty years ago instead of like an exciting, relatively new technology with a wealth of possibilities. FM radio is a dying breed and if things don't change at SiriusXM, it will be too.
Anything cool and exciting was taken away from satellite radio when the two companies merged. Satellite basically appeals to men over 30 who only plan on listening in their car. Technology succeeds when it appeals to a broad audience. There has been nothing "really" new or exciting about satellite for years now.
Unless satellite radio is "reinvented" it will become irrelevant in the very near future. The people behind SiriusXM need to stop putting all of their eggs in the Stern basket. Howard may have brought on a lot of subscribers, but as far as new growth, they're pumping a dry well. People who still care about Howard, already have satellite radio. The guy is 55 years old and no amount of advertising is going to make him appeal to young listeners. If Howard decides to not renew when his contract is up, then what? Let's say he is responsible for that amount of subscribers that he claims he is, what happens if they all bail out when he goes? Subscribers will leave in droves and the company crumbles because they've put "everything" behind him. Not really a good for the long term.
SiriusXM needs a young upstart to come aboard and give it a much needed kick in the ass. I'll agree with you that saying Mel is a cunt probably wasn't rational. I should have said that he is an ancient cunt.
I worked for this crap company post merger. Mel is indeed an ancient cunt with a great tan. No, I'm not a disgruntled former employee, left on my own b/c I knew Mel was morphing satrad into AM/FM. In many ways, it's worse than terrestrial radio. Yes, I think terrestrial (as a result of ipod/satrad) is actually improving while Satrad is dying. Anywho, Mel's living in the '80's.
The stakes at SiriusXM are high and Mel is no dummy. The stock options aren't worth anything to Mel at this point, in fact they are really useless to anyone at their conversion value. So, if Mel can convince someone to buy into staying at the company long term with these options, then good for Mel. It's what Mel does best...sells paper....
Now the real "reality" is Mel needs to get out of the operating company and let an aggressive "operator" take over. There are a number of life and death decisions that need to be made over the next few years at SiriusXM, and given the state of satellite radio, the U.S. economy, and media in general, the "onward and upward forever guys" including Mel are not motivated to make the right "long term" decisions.
As an former radio industry owner-operator, it is clear to me that the combined Sirius-XM operation needs to move aggressively to consolidate operations, get costs under control, determine what nitche they want to serve, then start investing the money saved, in programming content and customer service, in order to turn around the subscriber defections and create long term growth.
My recommendations would be to:
1. Determine what programming is really going to sell itself; then work on developing that line-up.
2. Move to consolidate satellite operations onto one satellite system. For the sake of the long term stability of the company, to reduce technical-operational complexity and cost, and provide the best possible service to the subscribers, the XM satellite system is the best choice.
3. Figure out how to get the Sirius users moved to the XM satellite system with the least possible disruption, and put together some financing to assist users in this transition.
4. Get the new programming line-up on the XM system this fall, including premium content like Howard Stern. While Howard Stern is no fool, I have little doubt he would agree to a new much less expensive deal, as long as he could participate in the longer term upside. Cut all the junk programming and costs surrounding the Howard Stern program. Get Howard to do his show live five hours a day, 5 days a week, and repeat the show on one single channel the rest of the time.
5. Run the same programming on both satellite systems until March 2010 (allows people time to buy new hardware as Christmas gifts and birthdays, etc.). Allow Sirius subscribers to move to XM easily and very quickly. Shutdown the Sirius terrestrial repeaters at the end of 2009 to move people along, and shut down Sirius satellite operations on March 31, 2010. Allow only XM system users to access Internet programming at no cost, again prompting people to move to the XM system. Give people a financial incentive to keep ALL of their subscriptions active through December 31, 2010.
6. Decide whether Sirius-XM is going to operate from New York or Washington, DC, and start the full consolidation asap, and get it done by this September.
7. Look at other high profit revenue streams that could be combined into the XM digital transmission system.
8. Look to leverage the old Sirius satellite system by either selling it to a data provider, or by creating a partnership with a data-broadcasting partner to use it as a mobile/portable data network. There are a number of potential applications that could generate revenue for this extra system. If, as it turns out, these other applications are not financially productive and/or the Sirius satellite satellite system is in need of near term satellite replacements, then just shut it down and move on.
Finally, Sirius-XM will not survive even in a consolidated mode if there is not an effective, productive and focused operating-management team. The operating-management team needs to grow the business and make "long term" decisions. The public-company team needs to raise capital for the new group and keep their hands off the operation. There is no question Sirius-XM is in trouble and may even be on life support at this point, but a dedicated management team with a long term view has a reasonable probability of making Sirius-XM a real busienss, as long as there is focus on the operating company, and not creating "transactions." And, even if the management team can stop the defections and create subscriber growth, it is going to be touch and go for some time to come, so survival is really going to depend on good-quick decisions by an effective "small" management team, and focus, focus, focus.
That's the view from here....
Dr. Raymond C. Rask
rcrask@awti.info
Rumor has it Mel converted them to toilet paper.
Mel is a genius if you think about it. I love his fanboys, He basicly got Liberty to bail him out of bankrupcy. Now that is a sign that you are doing good for a company. Run it into the groung and ask some one to help you stay in buissness. Briliant.
Good points Dr.Rask... Why is it taking so long for them to actually merge? It alomst seems like they're in no real hurry to make this one company.
The channel merge from last year wasn't a full merge. Both sides still have music channels that aren't available to the other. Sirius only has 1 current Pop channel but XM has 4 or 5 if you include the CC stations. I'm not a big Pop fan but my wife and daugher would like more options than just Sirius Hits One which is getting to be painful to listen too.
You see, how come you get it? It's a shame, really. I used to live by sat rad until the programming merge.
Is the 56k sound on the XM side still happening?
I cannot believe the number of people here who actually think Karmizan "did something" for the company's benefit here. These options have a strike of nearly $5.00. There is virtually zero percent chance of these shares ever seeing $5.00 again. He gave up nothing.
Then, to have someone say, "Thank God for Mel, nobody else could have 'pulled off' what he did, etc." is downright strange.
This man, along with his incompetent predecessor and a complicit XM management, destroyed satellite radio.
And now we have crap. I haven't listened to music on XM since maybe a month after the merger.
Whatever it takes to keep Howard. The clock is ticking...
First of all, on the main point of the thread, the stock options weren't "almost" worthless, they were completely worthless, and for Mr. Karmazin even to report that he shed them, or to make a ridiculous comment about it being in the company's interest, is just self-serving nonsense.
Second, Rcrask, your comments, while well-intentioned, would result in the complete demise of the company for these reasons:
1. Your first piece of advice to the company -- "determine what programming is really going to sell itself; then work on developing that line-up" is an exercise in stating the obvious. Advising Sirius XM to do this is like prescribing for the struggling auto companies that the recipe for success is to "develop a line of cars people really want and put them on the market." Um, yeah.
2. They simply cannot consolidate satellite operations into a single system. It's impossible. The biggest share of radios are permanently installed in cars, and these people have no interest in having their dashboard ripped up so they can continue to hear commercial-free Tom Petty and Bob Seger, along with a host of ad-supported news and talk freely available on AM and FM. This isn't cable TV or internet access -- people don't have to have it. I get 60 or 70 AM/FM stations in my locality without Sirius XM, and I don't even live in a big city. The only reason I want to keep this is because it's unique, special, compelling, it is increasingly not any of those things.
3. Consolidating front-office operations is, of course, a good idea, but consolidating programming has been a disaster. With two programming lineups, they had two groups of potential customers that could be served, and now they have one. A better solution than "consolidate everything" would be to return to two separate programming lineups. Now, in addition to destroying a lot of channels that gave a lot of people their reason to pay for satellite radio, they have created the expectation among subscriber that they're now entitled to all the premium content from both services such as Stern and MLB.
4. "Channel merging" has created the first quarterly reduction in subscribers the company has even seen. The solution is not a better merger, but to return to two independent systems, even if both are run from by the same conglomerate.
I like what is on your mind xcountry, but why not make all the channels available to everyone.... i mean does anyone have both xm and sirius? Is there not a way to make all the programming available to all hardware? I have not been following these threads for a while. i have a somewhat large amount of shares that i purchased at 0.15 so the run up to 0.63 and the fall off to back to 0.35 has certainly gained my attention. to me it just seems like with all the technology there is and all that this world is capable of there should be some way to be more cost effective and apeal to all xm and sirius subscribers. the company would not lose anyone over making every channel available for both groups, obviously... in fact they may gain more subscribers on top of what they lost. Even if the service went up a dollar or so. would that not attract more people. All i am saying is that there has to be someway to be able to send all the channels to all existing receivers. now i am not a tech guru but seriously there has to be away....or is what i am saying null and void?
Some of the separate programming is still there because of Clear Channel's investment in XM. Mel should do whats right and WALK AWAY and let Liberty Media take control and bring XM back to the top where it once was. I say XM cause the name makes more sense AM FM XM...
I totally agree to get rid of the high rent NYC digs and get more people down to the DC complex. I want my satellite radio back not glorified FM !!!
Amen!