Shock jock Howard Stern likely gave Sirius XM executives a shock on Feb. 8, when he told his radio listeners that he is considering leaving Sirius to become a judge on ‘American Idol’ when his lucrative Sirius contract expires at the end of the year.
Despite all the tribulations Sirius XM has gone through in the past year, the company’s board has just voted to extend the contract of CEO Mel Karmazin through 2012. As part of the new package, Karmazin receives a pay increase and a bunch of options exercisable at 43 cents a share.
Sirius XM investors just got more bad news. On Jan. 28, Barclay Capital analyst James Ratcliffe announced that he is discontinuing coverage of the satellite radio service provider, “as we believe that the equity price is not being driven by fundamentals or the future of the underlying business, but rather purely by speculation as to the company’s ability to refinance or restructure upcoming debt maturities.”
I just talked with a shareholder who attended Sirius XM’s annual shareholder meeting this morning. More than 150 people in attendance were at first greeted by a dozen banners, urging them to vote against a reverse split. The protesters did not succeed.
Yesterday, Sirius XM took a preventative step that could help the company to avoid getting delisted from the Nasdaq in the future. In a preliminary proxy statement issued on Oct. 16, Sirius proposed that shareholders approve a reverse stock split at its December annual meeting.
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