under the “Stock Awards” and the “Option Awards” columns, and in the “Grants of Plan-Based Awards in 2015”2020” table. The specific grants made to each executive are described in more detail below.
The material terms of Mr. Meyer’s employment agreement in effect during 2020 are described below under “Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements—James E. Meyer.”
In February 2016,2021, Mr. Meyer was awardedreceived a cash bonus of $7.5 million$7,200,000 in recognition of his notable performance and contribution to our corporate performancecontributions in 2015,2020, including:
 | | |
|
ü
| | IncreasingMaintaining SiriusXM as one of the largest subscription-based media companies in the United States by increasing our net self-pay subscribers in 2020 by approximately 2.3 million,909,000, resulting in a total self-pay subscriber base of approximately 29.6almost 30.9 million subscribers at year end, an increase of over 8%more than 3% as compared to 2014
the total subscriber base for 2019 |
| Increasing our total 2020 revenue to $8.04 billion, an increase of 3% from 2019 |
ü
| | Achieving adjusted EBITDA growth of 13%6% to $1.7$2.58 billion |
|
ü
| | Increasing our 2015 revenue by 9% to $4.6 billion and increasing free cash flow by 14% to $1.3 billion
|
|
ü
| | Overseeing $2over $1.57 billion of stock repurchases through our buyback program and paying dividends of approximately $237 million |
| Successfully completing our acquisitions of Stitcher, Simplecast and our investment in Soundcloud |
ü
| | Continuing to establish Sirius XM as aFostering strong leadership and cohesion among our senior management by leading provider of telematics servicesour strategic thinking and initiatives and by entering into agreements with Toyota, Nissan, Audi, Jaguar, Land Roverchampioning our technology and Subaru to provide connected vehicles services and/or support for their new vehicle safety and security services
business initiatives |
| Extending our agreement with Howard Stern |
ü
| | Managing our significant investments in research and development |
| Focusing on our customer experience |
ü
| | Continuing to expand our ability to identify and acquire subscribers in certified pre-owned and other used vehicles and managing our investment in infrastructure in this area |
|
ü
| | Entering into a long-term agreement with Howard Stern, renewing our agreements with the National Football League, the National Hockey League, and the PGA Tour, and adding other compelling content to our services while managing programming expenses
|
|
ü
| | Continuing to improve our customer care experience, including through further enhancements to our Internet-based self-care functionality and chat services |
|
ü
| | Fosteringfoster a corporate culture based on quality, creativity,integrity, respect and compliance and reinforcing our diversity integrity and innovation
|
|
ü
| | Maintaining Sirius XM as one of the largest subscription-based media companies in the United States
|
| inclusion initiatives |
 | 2021 PROXY STATEMENT | 47 |
Other Benefits Provided to Named Executive OfficersEXECUTIVE COMPENSATION • COMPENSATION DISCUSSION AND ANALYSIS
OTHER BENEFITS PROVIDED TO NAMED EXECUTIVE OFFICERS
Retirement and Other Employee Benefits
We maintain broad-based benefits for all employees, including health and dental insurance, life and disability insurance and a 401(k) savings plan, including a matching component for that plan. Our named executive officers are eligible to participate in all of our employee benefit plans on the same basis as other employees.
Our 401(k) savings plan allows eligible employees to voluntarily contribute from 1% to 50% of their pre-tax eligible earnings, subject to certain statutorily defined limits. We match 50% of an employee’s voluntary contributions per pay period on the first 6% of an employee’s pre-tax salary up to a maximum of 3% of eligible compensation. Employer matching contributions under the plan vest at a rate of 33.33% for each year of employment and are fully vested after three years of employment for all current and future contributions.
Deferred Compensation Plan
In 2015, the Compensation Committee approved and adoptedWe also maintain the Sirius XM Holdings Inc. Deferred Compensation Plan (the “Deferredfor employees at the level of vice president and above, which provides a tax-efficient method for participants to defer certain portions of their compensation. The Deferred Compensation Plan”)Plan is unfunded and unsecured, and participation is voluntary. We do not provide any matching contributions to the Deferred Compensation Plan and do not guarantee above-market returns. The appreciation, if any, in the account balances of plan participants is due solely to contributions by participants and the underlying performance of the investment funds selected by the participants. A description of the Deferred Compensation Plan is included under “Non-Qualified Deferred Compensation.” The contributions, earnings and account balances for the named executive officers in the Deferred Compensation Plan are described in the “Non-Qualified Deferred Compensation” table.
Perquisites and Other Benefits for Named Executive Officers
The Compensation Committee supports providing other benefits to named executive officers that are almost identical to those offered to our other full time employees and are provided to similarly situated executives at companies with which we compete for executive talent.
In limited circumstances, a named executive officer may receive certain tailored benefits. In connection with the renegotiation of his employment agreement in October 2019, we renewed our Use of Private Aircraft Agreement with Mr. Meyer pursuant to which he was entitled to personal use of a private aircraft arranged by us for up to 100 hours of flight time per year through December 31, 2020, calculated in accordance with the Standard Industry Fare Level formula or a comparable successor provision, for any personal use of such private aircraft in accordance with this policy. We have no obligation to provide Mr. Meyer with any “gross up” in respect of any taxes related to this benefit. The aggregate incremental value attributable to the cost of this benefit for Mr. Meyer during 2020 was less than 10% of his compensation for 2020.
In connection with the employment agreement we entered into with Ms. Witz in September 2020 regarding her appointment as Chief Executive Officer, we entered into a Use of Private Aircraft Agreement with Ms. Witz that became effective on January 1, 2021. Pursuant to that agreement, Ms. Witz is entitled to personal use of a private aircraft arranged by us for up to 30 hours of flight time per year through the earlier of (i) December 31, 2023 or (ii) the termination of her employment. Ms. Witz will incur taxable income, calculated in accordance with the Standard Industry Fare Level formula or a comparable successor provision, for any personal use of such private aircraft in accordance with this policy. We have no obligation to provide Ms. Witz with any “gross up” in respect of any taxes related to this benefit. Pursuant to her new employment agreement, the Company will also provide Ms. Witz with a car allowance up to $2,000 per month for commuting to and from her home to the Company’s offices or will provide Ms. Witz with a personal driver for purposes of commuting.
In 2020, Ms. Witz and Mr. Sullivan were also reimbursed for legal expenses relating to the negotiation of their employment agreements.
| 48 | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • COMPENSATION DISCUSSION AND ANALYSIS
Payments to Named Executive Officers Upon Termination or Change in Control
The employment agreements with our named executive officers provide for severance payments upon an involuntary termination of employment without “cause” or a termination of employment for “good reason” (as each term is defined in their employment agreement). While these arrangements vary among executives due to individual negotiations, none of our employment agreements with our named executive officers include any golden parachute excise tax gross-ups. The material terms of these agreements are described under “Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements.”
None of the employment agreements for the named executive officers provide for any payments solely due to a change in control. Under the terms of the 2015 Plan, if the employment of any of our named executive officers is terminated by us without cause, or by the executive for good reason, within two years following a change in control, then in accordance with the 2015 Plan, their equity awards are subject to accelerated vesting.
We believe that these severance arrangements appropriately mitigate some of the risk that exists for executives working in our highly competitive industry. These arrangements are intended to retain highly qualified executives who could have other job alternatives that may appeal to them, in the absence of these arrangements, to be less risky, and such arrangements are designed to allow the executives to focus exclusively on our interests and growth strategies.
Pursuant to his employment agreement, Mr. Meyer entered into a three-year consulting agreement with us upon his retirement, as further described below.
FISCAL YEAR 2021 COMPENSATION CONSIDERATIONS
Vesting of PRSUs—Granted for the 2019-2020 Performance Period. Certain PRSUs granted by the Compensation Committee are subject to achievement of a cumulative free cash flow target established by the Compensation Committee, measured over a two-year performance period. In early 2021, the Compensation Committee certified the achievement of the free cash flow performance goal for PRSUs that had a performance period commencing on January 1, 2019 and ending on December 31, 2020. Free cash flow performance for the period exceeded the performance goal, which resulted in the vesting of the PRSUs at 100%. The settlement of these PRSUs is generally subject to the executive’s continued employment with us for an additional vesting period. This additional vesting period varies for executive officers but is generally one year.
Employment Agreement—Ms. Witz. In September 2020, we entered into a new employment agreement with Ms. Witz to serve as our Chief Executive Officer, effective on January 1, 2021 following Mr. Meyer’s retirement. In connection with her new employment agreement, Ms. Witz’s base salary was increased from $1,200,000 to $1,750,000. Furthermore, on the first business day that the trading window for our employees opened after she became our Chief Executive Officer, we agreed to grant Ms. Witz an option to purchase shares of our common stock having a value, calculated based upon the Black-Scholes-Merton option pricing model using the financial inputs consistent with those we use for financial reporting purposes, of $9,500,000 at an exercise price equal to the closing sale price of our common stock on the Nasdaq Global Select Market on that day. The option will vest in installments of approximately 26%, 37% and 37% on December 31, 2021, December 31, 2022 and December 31, 2023, respectively. Pursuant to the employment agreement, we also agreed to grant Ms. Witz time-based RSUs with a value of $5,000,000 and PRSUs with a value of $10,000,000. The Compensation Committee and the board of directors concluded, in their business judgment, that the terms of this employment agreement, including the amount and structure of the equity-based compensation, was reasonable and appropriate in light of the circumstances and taken as a whole. The material terms of Ms. Witz’s new employment agreement are described below under “Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements—Jennifer C. Witz.”
Amendments to Employment Agreements—Ms. Witz and Mr. Sullivan. In February 2021, we amended our employment agreements with Mr. Witz, our Chief Executive Officer, and Mr. Sullivan, our Executive Vice President and Chief Financial Officer. The amendments reflect modifications to their PRSU awards to more closely align the
| 2021 PROXY STATEMENT | 49 |
EXECUTIVE COMPENSATION • COMPENSATION DISCUSSION AND ANALYSIS
performance metrics with changes to the long-term equity compensation program adopted by the Compensation Committee for our senior management generally. No changes were made to the grant date value of these executives’ awards.
The long-term equity compensation for our senior management in recent years has generally consisted of stock options, RSUs and PRSUs with a two-year cumulative free cash flow performance target. In 2021, the Compensation Committee approved a modification to the design of our long-term equity compensation program. The Compensation Committee intends to award equity-based compensation to our senior management in the form of: 25% stock options, which awards will vest in installments on the first three anniversaries of the date of grant; 25% RSUs, which awards will vest in installments on the first three anniversaries of the date of grant; 25% PRSUs, which will cliff vest on the third anniversary of the date of grant after a two-year performance period if the free cash flow target established by the Compensation Committee is achieved; and 25% PRSUs, which will cliff vest after a three-year performance period based on the performance of our common stock relative to the companies included in the S&P 500 Index.
We amended the PRSU agreement included in Ms. Witz’s employment agreement to more closely align the performance metrics to this long-term equity compensation program. In lieu of the PRSU award initially contemplated in her employment agreement, Ms. Witz received the following awards on February 16, 2021: an award of PRSUs having a $5 million target value as of the date of grant which will cliff vest on December 31, 2023 after a two-year performance period if a free cash flow target established by the Compensation Committee is achieved; and an award of PRSUs having a $5 million value as of the date of grant which will cliff vest at the end of a performance period commencing on January 1, 2021 and ending on December 31, 2023, based on the performance of our common stock relative to the companies in the S&P 500 Index.
We amended the PRSU agreement included in Mr. Sullivan’s employment agreement in similar respects. In lieu of Mr. Sullivan’s PRSU award with a grant date value of $4.5 million, we granted Mr. Sullivan the following awards: an award of 381,663 PRSUs (a $2.25 million target value as of the award date, October 27, 2020, plus dividends declared and accrued from the award date), which will cliff vest on October 26, 2023 after a two-year performance period if a free cash flow target established by the Compensation Committee is achieved; and an award of 381,663 PRSUs (a $2.25 million target value as of the award date, October 27, 2020, plus dividends declared and accrued from the award date), which will cliff vest at the end of a performance period commencing on January 1, 2021 and ending on December 31, 2023 based on the performance of our common stock relative to the companies in the S&P 500 Index. Mr. Sullivan will vest in that award on October 26, 2023, subject to the Compensation Committee’s certification of our performance during the performance period.
The Compensation Committee plans to continue to review our executive compensation program in 2021 with a view toward ensuring that it continues to provide the correct incentives and is properly sized given the scope and complexity of our business and the competition we face. The Compensation Committee also plans to monitor and assess the continuing effects of the COVID-19 pandemic on our compensation plans and practices. At this point, the full extent to which the ongoing coronavirus pandemic may negatively impact the Company’s results and operations is uncertain. The actual effects of the coronavirus on the Company’s businesses depends on many factors beyond our employees’ control, and the effects are difficult to assess or predict with meaningful precision both generally and specifically as to our Sirius XM and Pandora businesses. The Compensation Committee understands that, when the short- and long-term effects of the COVID-19 pandemic on the Company are better understood, it may be prudent to make further changes to our existing compensation plans to protect the interests of stockholders and ensure that the Company can attract and retain the senior management talent that is critical to the execution of our business plan and continuing strategy.
| 50 | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • COMPENSATION DISCUSSION AND ANALYSIS
The Compensation Committee has chosen to award equity-based compensation to those executive officers who the Compensation Committee believes will have a significant impact on our financial, operational and strategic goals. The specific mix of equity-based compensation granted will be determined by the Compensation Committee with the assistance of our Chief Executive Officer and by using their collective informed judgment, taking into account the executive’s role and responsibilities and our overall performance.
The Compensation Committee intends to continue incorporating performance-based elements into its annual bonus program for 2021 for senior management but, consistent with the 2020 bonus design, does not anticipate including a purely formulaic financial performance measure as part of the program. Rather, consistent with its past practices, the Compensation Committee intends to use these performance-based elements as one factor in determining the annual bonus pool for employees and in evaluating the performance of senior management, including our named executive officers.
STOCK OWNERSHIP REQUIREMENT
We do not require that executives accumulate and maintain a minimum level of stock ownership in us.
CLAWBACK/RECOUPMENT
Any compensation or equity awards provided to the named executive officers are subject to clawback as may be required pursuant to any law, regulation or stock exchange listing requirement. Our employment agreements with our named executive officers include provisions permitting us to clawback compensation to the extent it may be required pursuant to any law, regulation or stock exchange listing requirement.
ANTI-HEDGING AND PLEDGING POLICY
Our officers, directors and employees are prohibited from engaging in short sales of our securities and from engaging in transactions in publicly-traded derivative securities, such as options, puts, calls and other derivative securities based on the value of our securities, including any hedging, monetization or similar transactions designed to decrease the risks associated with holding our securities, such as zero-cost collars and forward sales contracts. As a result, our officers, directors and employees cannot insulate themselves from the effects of poor stock price performance. In addition, our officers, directors and employees are prohibited from pledging our securities as collateral for any loan or holding our securities in a margin account.
COMPENSATION RISK ASSESSMENT
The Compensation Committee reviews the risk-reward balance of our compensation programs and does not believe that any risks that may arise from our compensation policies and practices are reasonably likely to have a material adverse effect on us. The Compensation Committee considered various factors that have the effect of mitigating compensation-related risks and have reviewed our compensation policies and practices for our employees, including the elements of our executive compensation programs, to determine whether any portion of such compensation encourages excessive risk taking.
POLICY WITH RESPECT TO SECTION 162(m) OF THE INTERNAL REVENUE CODE
Historically, the Compensation Committee has endeavored to maximize deductibility of compensation under Section 162(m) to the extent practicable while maintaining competitive compensation levels. Under Section 162(m), we were historically prohibited from deducting certain forms of compensation in excess of $1,000,000 paid to our “covered employees” as defined in Section 162(m), which, prior to its amendment, included our Chief Executive Officer and three other most highly compensated executive officers (other than our Chief Financial Officer). An exception to this $1,000,000 deduction limitation was previously available with respect to compensation that qualified as “performance-based compensation” under Section 162(m).
| 2021 PROXY STATEMENT | 51 |
EXECUTIVE COMPENSATION • COMPENSATION DISCUSSION AND ANALYSIS
As a result of the Tax Cuts and Jobs Act that went into effect on December 22, 2017, this exception for performance-based compensation is no longer available for taxable years beginning after December 31, 2017, unless such compensation qualifies for certain transitional relief contemplated in this legislation for certain written contracts in place as of November 2, 2017. Therefore, certain compensation paid to our covered employees under our annual bonus programs and certain of our long-term equity awards under our 2015 Plan that may have originally been designed with the intent that such amounts qualify as performance-based compensation are no longer expected to be deductible. In addition, beginning in 2018, the definition of “covered employees” includes any individual who served as the CEO or CFO at any time during the taxable year and the three other most highly compensated officers (other than the CEO and CFO) for the taxable year, and once an individual becomes a covered employee for any taxable year beginning after December 31, 2016, that individual will remain a covered employee for all future years, including following any termination of employment.
The Compensation Committee has considered the deductibility of compensation as one factor in determining the structure of compensation awards. The Compensation Committee also looks at other factors in making its decisions, and believes that it is important to retain flexibility in designing compensation programs that are in the best interests of the Company and its stockholders, even if such compensation is not deductible for tax purposes. This flexibility may include amending or modifying certain elements of our compensation programs that the Compensation Committee determines to be consistent with our business needs, even if such compensation is not tax deductible. The Compensation Committee does not believe that the lost deduction on compensation payable in excess of $1 million for the named executive officers is material relative to the benefit of being able to attract and retain talented management; however, the Compensation Committee still expects to continue to incorporate performance-based elements into our executive compensation programs.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Compensation Committee
CARL E. VOGEL, Chairman
MARK D. CARLETON
JAMES P. HOLDEN
MICHAEL RAPINO
| 52 | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • SUMMARY COMPENSATION TABLE
Summary Compensation Table
The following table provides information concerning total compensation earned or paid to our Chief Executive Officer, our current Chief Financial Officer and our three other most highly compensated executive officers who served in such capacities as of December 31, 2020 for services rendered to us during each of the past three fiscal years. Also included is our former Chief Financial Officer, who left the company on September 15, 2020 to pursue other opportunities. These six officers are referred to herein as the “named executive officers.”
| Name and Principal Position | | Year | | Salary
$ | | Bonus(1)
$ | | Stock
Awards(2)
$ | | Option
Awards(2)
$ | | Nonqualified
Deferred
Compensation
Earnings(3)
$ | | All Other
Compensation(4)
$ | | Total
$ |
| James E. Meyer(5) | | 2020 | | 2,000,000 | | 7,200,000 | | 9,999,997 | | — | | — | | 328,232 | | 19,528,229 |
| Chief Executive Officer | | 2019 | | 2,000,000 | | 8,750,000 | | 7,499,997 | | — | | — | | 528,834 | | 18,778,831 |
| | | 2018 | | 1,994,615 | | 8,000,000 | | 7,500,001 | | — | | — | | 139,337 | | 17,633,953 |
| Scott A. Greenstein | | 2020 | | 1,600,001 | | 2,320,000 | | 6,710,003 | | 4,290,001 | | — | | 33,592 | | 14,953,597 |
| President and Chief Content Officer | | 2019 | | 1,601,923 | | 2,900,000 | | — | | — | | — | | 54,231 | | 4,556,154 |
| | 2018 | | 1,500,000 | | 2,750,000 | | 11,250,004 | | 3,750,000 | | — | | 41,191 | | 19,291,195 |
| Jennifer C. Witz | | 2020 | | 1,200,000 | | 2,320,000 | | — | | — | | — | | 60,928 | | 3,580,928 |
| President, Sales, Marketing and Operations | | 2019 | | 1,118,654 | | 2,900,000 | | 8,999,998 | | 3,000,000 | | — | | 64,674 | | 16,083,326 |
| | 2018 | | 741,154 | | 2,200,000 | | 1,875,000 | | 625,000 | | — | | 36,762 | | 5,477,916 |
| Sean S. Sullivan | | 2020 | | 190,385 | | 700,000 | | 6,250,002 | | 2,250,000 | | — | | 40,481 | | 9,430,867 |
| Executive Vice President and Chief Financial Officer | | 2019 | | — | | — | | — | | — | | — | | — | | — |
| | 2018 | | — | | — | | — | | — | | — | | — | | — |
| David J. Frear(6) | | 2020 | | 1,090,169 | | 1,460,000 | | — | | — | | — | | 4,252,445 | | 6,802,614 |
| (Former) Senior Executive Vice President and Chief Financial Officer | | 2019 | | 1,400,000 | | 2,750,000 | | — | | — | | — | | 68,342 | | 4,218,342 |
| | 2018 | | 1,316,154 | | 2,650,000 | | 8,999,997 | | 2,999,999 | | — | | 18,056 | | 15,984,206 |
| Patrick L. Donnelly | | 2020 | | 1,040,000 | | 1,600,000 | | — | | — | | — | | 24,642 | | 2,664,642 |
| Executive Vice President, General Counsel and Secretary | | 2019 | | 875,000 | | 2,000,000 | | 6,000,002 | | 2,000,000 | | — | | 46,770 | | 10,921,772 |
| | 2018 | | 875,000 | | 1,800,000 | | — | | — | | — | | 47,813 | | 2,722,813 |
| (1) | The amounts reflected in this column are the gross amounts of each named executive officer’s annual bonus award payable in respect of the fiscal year to which such amount relates. See the discussion under the heading “Fiscal Year 2020 Pay Results—Payment of Performance-Based Discretionary Annual Bonuses for 2020” for additional details on bonus awards for 2020. |
| (2) | The aggregate grant date fair value of stock option, RSU and PRSU awards were computed in accordance with FASB ASC 718, Compensation—Stock Compensation. The assumptions used in the valuation of the stock options are discussed in Note 16 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. The grant date fair value for the PRSUs granted to Mr. Greenstein was based on the probable outcome of the performance conditions applicable to such PRSUs as of the date of grant, which was equal to the target level. Assuming the highest level of performance achievement as of the grant date, the grant date fair value of the PRSUs would have been $4,510,003 for Mr. Greenstein. |
| (3) | We do not provide above-market or preferential earnings on deferred compensation. |
| (4) | For each named executive officer, other than Mr. Sullivan, the amount in the “All Other Compensation” column for 2020 reflects matching contributions by us in the amount of $8,550 under our 401(k) savings plan and DEUs granted with respect to unvested RSU awards. |
| In connection with the payments of our quarterly dividends in the amount of $0.01331 per share on February 28, 2020, May 29, 2020 and August 31, 2020, and in the amount of $0.01464 per share on November 30, 2020, our named executive officers were credited with DEUs in the form of RSUs in respect of their unvested stock awards pursuant to the terms of the applicable award agreements. The values of such DEUs were calculated using a twenty day average price of our common stock prior to the record dates for such dividends. The value of the DEUs granted for each of the named officers is as follows: Mr. Meyer: $76,575; Mr. Greenstein: $25,042; Ms. Witz: $44,521; Mr. Sullivan: $15,481; Mr. Frear: $43,895; and Mr. Donnelly: $16,092. For Mr. Frear, the amount in the “All Other Compensation” column for 2020 also reflects a lump sum severance payment of $4,150,000, representing the sum of (i) his annualized base salary of $1,400,000 and (ii) $2,750,000, the annual bonus last paid to him. The amount for Mr. Frear also includes $50,000 for accrued benefits. |
| 2021 PROXY STATEMENT | 53 |
EXECUTIVE COMPENSATION • GRANTS OF PLAN-BASED AWARDS IN 2020
| For Ms. Witz and Mr. Sullivan the amounts in the “All Other Compensation” column for 2020 also includes $7,857 and $25,000, respectively, paid on their behalf for legal fees they incurred in connection with the negotiation of their employment agreements. |
| For Mr. Meyer, the amount in the “All Other Compensation” column for 2020 also includes $243,107, the aggregate incremental cost to us in 2020 associated with his personal use of a private aircraft arranged by us. |
| (5) | Mr. Meyer retired as our Chief Executive Officer on December 31, 2020 and was succeeded in that role by Ms. Witz. |
| (6) | Mr. Frear left the company on September 15, 2020 to pursue other opportunities and was succeeded in that role by Mr. Sullivan. |
Grants of Plan-Based Awards in 2020
The following table provides information with respect to equity grants made during fiscal year 2020 to the named executive officers.
| | | | | Estimated Future Payouts
Under Equity Incentive
Plan Awards(1)(2) | | All Other
Stock
Awards:
Number of
Shares of
Stock or | | All Other
Option
Awards:
Number of
Securities
Underlying | | Exercise
or Base
Price of
Option | | Grant Date
Fair Value
of Stock
and Option |
| Name | | Grant Date | | Threshold
(#) | | Target
(#) | | Maximum
(#) | | Units
(#)(2) | | Options
(#)(2) | | Awards
($/Sh)(3) | | Awards
($)(4) |
| James E. Meyer | | 1/02/2020 | | — | | — | | — | | 1,398,601 | | — | | — | | 9,999,997 |
| Scott A. Greenstein | | 12/8/2020 | | — | | — | | — | | — | | 2,683,790 | | 6.610 | | 4,290,001 |
| | | 12/8/2020 | | — | | — | | — | | 332,829 | | — | | — | | 2,200,000 |
| | | 12/8/2020 | | 545,840 | | 682,300 | | 682,300 | | — | | — | | — | | 4,510,003 |
| Jennifer C. Witz | | — | | — | | — | | — | | — | | — | | — | | — |
| Sean S. Sullivan | | 10/27/2020 | | — | | — | | — | | — | | 1,540,490 | | 5.910 | | 2,250,000 |
| | | 10/27/2020 | | — | | — | | — | | 1,057,530 | | — | | — | | 6,250,002 |
| David J. Frear | | — | | — | | — | | — | | — | | — | | — | | — |
| Patrick L. Donnelly | | — | | — | | — | | — | | — | | — | | — | | — |
| (1) | The PRSUs granted to Mr. Greenstein on December 8, 2020 were in connection with his employment agreement dated December 7, 2020. The PRSUs are earned subject to achievement of one or more financial and/or operating goals or combination of goals, which may include, among other things, return on net assets, return on stockholders equity, return on assets, return on capital revenue, average revenue per subscriber, total stock holder returns, profit margin, earnings per share, free cash flow per share, net earnings, operating earnings, free cash flow, adjusted earnings before interest, taxes, depreciation and amortization, number of subscribers, growth of subscribers, operating expenses, capital expenses, subscriber acquisition costs or other metrics, established by the Compensation Committee, measured over a two-year performance period. The PRSUs will vest in full upon achievement of 100% or more of the approved metric target. None of those performance targets have yet been set. If the level of achievement of the approved metric falls between 80% and 100% of the target, then the number of PRSUs that will vest will be determined by straight line interpolation between those percentages. If the level of the achievement of the approved metric is below the 80% of the target, then none of the PRSUs will vest. The settlement of PRSUs earned in respect of the two-year performance period is subject to the continued employment of Mr. Greenstein for an additional period following that performance period. |
| (2) | Grants were made under the 2015 Plan. |
| (3) | The exercise price of the options granted to each of the named executive officers is equal to the closing price of our common stock reported on NASDAQ on the dates of grant. |
| (4) | The aggregate grant date fair value of stock option, RSU and PRSU awards were computed in accordance with FASB ASC 718, Compensation—Stock Compensation, including, in the case of the PRSUs, the probable outcome of the performance conditions. The assumptions used in the valuation of the stock options are discussed in Note 16 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020. For Mr. Sullivan, the amount shown does not include the portion of the PRSU award provided for under his employment agreement that is subject to a relative TSR target, since under FASB ASC 718 those awards were granted in 2021. These awards are described in the Compensation, Discussion & Analysis under “Fiscal Year 2021 Compensation Considerations—Amendments to Employment Agreements—Ms. Witz and Mr. Sullivan.” |
| 54 | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2020
Outstanding Equity Awards at Fiscal Year-End 2020
The following table provides information with respect to the status at December 31, 2020 of all unvested RSUs and PRSUs and exercisable and unexercisable stock options awarded to each of the named executive officers:
| | | Option Awards | | Stock Awards(1) |
| Name | | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Option
Exercise
Price
($) | | Option
Expiration
Date | | Number of
Shares or
Units
that
have not
Vested
(#) | | Market
Value of
Shares or
Units of
Stock
that
have not
Vested
($) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
(#) | | Equity
Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That
Have Not
Vested
($) |
| James E. Meyer(2) | | 6,279,313 | | — | | 3.9000 | | 8/11/2025 | | — | | — | | — | | — |
| Scott A. Greenstein(3) | | 3,601,867 | | — | | 3.9600 | | 5/24/2026 | | — | | — | | — | | — |
| | | 2,120,582 | | 1,060,290 | | 5.5100 | | 12/24/2028 | | — | | — | | — | | — |
| | | — | | 2,683,790 | | 6.6100 | | 12/08/2030 | | — | | — | | — | | — |
| | | — | | — | | — | | — | | 563,615 | | 3,590,228 | | — | | — |
| | | — | | — | | — | | — | | — | | — | | 2,067,009 | | 13,166,847 |
| Jennifer C. Witz(4) | | 563,875 | | — | | 5.5200 | | 8/21/2027 | | — | | — | | — | | — |
| | | 377,398 | | 188,699 | | 6.1100 | | 2/01/2028 | | — | | — | | — | | — |
| | | 759,294 | | 1,518,588 | | 6.0300 | | 3/05/2029 | | — | | — | | — | | — |
| | | — | | — | | — | | — | | 371,661 | | 2,367,481 | | — | | — |
| | | — | | — | | — | | — | | — | | — | | 1,219,803 | | 7,770,145 |
| Sean S. Sullivan(5) | | — | | 1,540,490 | | 5.9100 | | 10/27/2030 | | 1,060,175 | | 6,753,315 | | — | | — |
| David J. Frear(6) | | 8,000,000 | | — | | 3.9500 | | 9/14/2021 | | — | | — | | — | | — |
| | | 2,238,802 | | — | | 7.0700 | | 9/14/2021 | | — | | — | | — | | — |
| | | — | | — | | — | | — | | — | | — | | — | | — |
| | | — | | — | | — | | — | | — | | — | | — | | — |
| Patrick L. Donnelly(7) | | 1,807,549 | | — | | 4.6100 | | 11/22/2026 | | — | | — | | — | | — |
| | | 487,711 | | 975,424 | | 6.8050 | | 11/22/2029 | | — | | — | | — | | — |
| | | — | | — | | — | | — | | 197,716 | | 1,259,451 | | — | | — |
| | | — | | — | | — | | — | | — | | — | | 593,147 | | 3,778,346 |
| (1) | Amounts also include DEUs granted to the executive pursuant to the terms of the award agreements governing each RSU or PRSU, as applicable, to reflect the payment of dividends on our common stock. DEUs vest on the same terms as the related RSUs or PRSUs, as applicable. All DEUs are granted pursuant to the terms of the 2015 Plan. Our practice with respect to crediting DEUs is described in more detail on page 46. |
| Amounts under “Market Value of Shares or Units of Stock that have not Vested” and “Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested” were calculated based on the closing price on NASDAQ of our common stock on December 31, 2020 of $6.37 (the last trading day of the fiscal year). The RSUs and PRSUs are valued at (a) the closing price of the stock at December 31, 2020 multiplied by (b) the number of awards that have not vested. In the table above, the number and market value of the PRSUs reflect target performance achievement as of the grant date for Mr. Greenstein, Ms. Witz, Mr. Sullivan and Mr. Donnelly upon actual performance. The performance period for the PRSUs granted to Mr. Greenstein in 2018 was the period beginning January 1, 2019 and ending December 31, 2020. The performance period for the PRSUs granted to Mr. Greenstein in 2020 is the period beginning January 1, 2022 and ending December 31, 2023. The performance period for the PRSUs granted to Mr. Donnelly is the period beginning January 1, 2020 and ending December 31, 2021. The performance period for the PRSUs granted to Ms. Witz in 2018 was the period beginning January 1, 2018 and ending |
| 2021 PROXY STATEMENT | 55 |
EXECUTIVE COMPENSATION • OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END 2020
| December 31, 2019. The performance period for the PRSUs granted to Ms. Witz in 2019 was the period beginning January 1, 2019 and ending December 31, 2020. The actual number of shares, with respect to the PRSUs, will be distributed upon the satisfaction of the applicable performance metrics through the performance period and the employee’s continued employment. |
| (2) | Reflects the options granted to Mr. Meyer on August 11, 2015 at an exercise price of $3.90 which vested on April 30, 2018. The 1,411,316 RSUs granted to Mr. Meyer in 2020 vested on December 31, 2020 and are included in the “Option Exercises and Stock Vested in 2020” table below. |
| (3) | Outstanding equity awards for Mr. Greenstein vest as follows: options granted on May 24, 2016 at an exercise price of $3.96 vested as follows: 3,601,868 options vested on May 24, 2017, 3,601,867 options vested on May 24, 2018, and 3,601,867 options vested on May 24, 2019; options granted on December 24, 2018 at an exercise price of $5.51 vest as follows: 1,060,291 options vested on December 24, 2019, 1,060,291 options vested on December 24, 2020, and 1,060,290 options vest on May 24, 2022; 2,683,790 options granted on December 8, 2020 at an exercise price of $6.61 will vest in two equal annual installments of 1,341,895 on May 24, 2023 and May 24, 2024. The outstanding RSUs granted to Mr. Greenstein vest as follows: 230,786 RSUs will vest on May 24, 2022, 166,415 RSUs will vest on May 24, 2023, and 166,414 RSUs will vest on May 24, 2024. The 1,384,709 PRSUs granted to Mr. Greenstein on December 24, 2018 will vest, subject to his continued employment, on May 24, 2022. The 682,300 PRSUs granted to Mr. Greenstein on December 8, 2020 will vest, subject to the satisfaction of the applicable performance metrics through the performance period ending December 31, 2023 and his continued employment, on May 24, 2024. |
| (4) | Outstanding equity awards for Ms. Witz vest as follows: options granted on August 21, 2017 at an exercise price of $5.52 vested as follows: 187,959 options vested on August 21, 2018; 187,958 options vested on August 21, 2019; and 187,958 options vested on August 21, 2020; the 566,097 options granted at an exercise price of $6.11 vested in three equal annual installments of 188,699 from date of grant on February 1, 2018; the 2,277,882 options granted at an exercise price of $6.03 vest in three equal annual installments of 759,294 from date of grant on March 5, 2019. The outstanding RSUs granted to Ms. Witz vest as follows: 34,936 RSUs vested on February 1, 2021; 168,361 RSUs vested on March 5, 2021; and 168,364 RSUs will vest on March 7, 2022. The 209,628 PRSUs granted to Ms. Witz on February 1, 2018 vested on February 1, 2021. The 1,010,175 PRSUs granted to Ms. Witz on March 5, 2019 will vest, subject to her continued employment, on March 5, 2022. |
| (5) | Outstanding equity awards for Mr. Sullivan vest as follows: options granted on October 27, 2020 at an exercise price of $5.91 will vest as follows: 513,497 options will vest on October 27, 2021, 513,497 options will vest on October 27, 2022, and 513,496 options will vest on October 26, 2023. The outstanding RSUs granted to Mr. Sullivan will vest as follows: 466,477 RSUs will vest on October 27, 2021, 296,848 RSUs will vest on October 27, 2022, and 296,850 RSUs will vest on October 26, 2023. |
| (6) | Outstanding equity awards for Mr. Frear vested as follows: the 14,250,000 options granted at an exercise price of $3.95 vested in three equal annual installments of 4,750,000 from date of grant on July 29, 2015; options granted on June 1, 2018 at an exercise price of $7.07 vested as follows: 746,268 options vested on June 1, 2019; 746,267 options vested on June 1, 2020, and 746,267 options vested on September 14, 2020 in connection with his separation. All of Mr. Frear’s unvested options, RSUs and PRSUs vested in connection with his separation. |
| (7) | Outstanding equity awards for Mr. Donnelly vest as follows: options granted on November 22, 2016 at an exercise price of $4.61 vested as follows: 602,517 options vested on November 22, 2017, 602,516 options vested on November 22, 2018, and 602,516 options vested on November 22, 2019; options granted on November 22, 2019 at an exercise price of $6.805 vest as follows: 487,711 options vested on November 22, 2020; 487,712 options will vest on November 22, 2021; and 487,712 options will vest on November 22, 2022. The RSUs granted to Mr. Donnelly will vest as follows: 98,858 RSUs will vest on November 22, 2021, and 98,858 RSUs will vest on November 22, 2022. The 593,147 PRSUs granted to Mr. Donnelly on November 22, 2019 will vest, subject to the satisfaction of the applicable performance metrics through the performance period ending December 31, 2021 and his continued employment, on November 22, 2022. |
All equity awards vest subject to the named executive officer’s continued employment though the applicable vesting date and are subject to earlier vesting upon certain qualifying terminations of employment. See “Potential Payments or Benefits Upon Termination or Change in Control.”
| 56 | | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • OPTION EXERCISES AND STOCK VESTED IN 2020
Option Exercises and Stock Vested in 2020
The following table provides information with respect to option exercises and RSUs that vested during 2020:
| | | Option Awards | | | Stock Awards |
| | | | | | |
| Name | | Number of
Shares Exercised
(#) | | | Value Realized
on Exercise
($)(1) | | | Number of
Shares Acquired
on Vesting
(#) | | | Value
Realized
on Vesting
($)(2) |
| James E. Meyer | | | 7,128,894 | | | | 22,349,083 | | | | 1,411,316 | | | | 9,046,536 |
| Scott A. Greenstein | | | — | | | | — | | | | 230,783 | | | | 1,447,009 |
| Jennifer C. Witz | | | — | | | | — | | | | 472,447 | | | | 2,934,446 |
| Sean S. Sullivan | | | — | | | | — | | | | — | | | | — |
| David J. Frear | | | 2,250,000 | | | | 4,456,250 | | | | 1,152,017 | | | | 6,180,424 |
| Patrick L. Donnelly | | | — | | | | — | | | | 98,858 | | | | 634,700 |
| (1) | Value realized on exercise is the amount equal to the difference between (a) the price on NASDAQ of the stock acquired upon exercise on the exercise date less (b) the exercise price, multiplied by the number of options exercised. |
| (2) | Value realized on vesting is the amount equal to (a) the closing price on NASDAQ on the vesting dates multiplied by (b) the number of shares vesting. |
Non-Qualified Deferred Compensation
The following table provides information with respect to Sirius XM Holdings Inc. Deferred Compensation Plan, a nonqualified deferred compensation plan, for 2020:
| Name | | Executive
Contributions(1)
($) | | | Employer
Contributions
($) | | | Aggregate
Earnings in
Last Fiscal
Year(2)
($) | | | Aggregate
Withdrawals/
Distributions
($) | | | Aggregate
Balance at Last
Fiscal
Year-End(3)
($) |
| James E. Meyer | | | — | | | | — | | | | (74,971 | ) | | | — | | | | 9,541,027 |
| Scott A. Greenstein | | | — | | | | — | | | | — | | | | — | | | | — |
| Jennifer C. Witz | | | 1,740,000 | | | | — | | | | 203,677 | | | | — | | | | 7,301,158 |
| Sean S. Sullivan | | | 63,462 | | | | — | | | | 1,039 | | | | | | | | 64,500 |
| David J. Frear | | | 511,000 | | | | — | | | | 755,679 | | | | — | | | | 6,494,979 |
| Patrick L. Donnelly | | | 1,060,000 | | | | — | | | | 42,200 | | | | — | | | | 1,102,200 |
| (1) | The amounts include certain base salary amounts that are listed in the “Salary” column of the Summary Compensation Table and cash bonus amounts that are listed in the “Bonus” column of the Summary Compensation Table. This includes amounts earned during fiscal 2020 but credited to such executive officers’ deferred compensation accounts after the end of fiscal 2020. For Ms. Witz, the amount includes $1,740,000 of her 2020 annual bonus, for Mr. Frear, the amount includes $511,000 of his 2020 annual bonus, and for Mr. Donnelly, the amount includes $800,000 of his 2020 annual bonus. |
| (2) | Amounts in this column are not reported as compensation for fiscal year 2020 in the Summary Compensation Table since they do not reflect above-market or preferential earnings. Deferrals may be allocated among investment options that are similar to the investment options available under the Sirius XM 401(k) Savings Plan. Of the available investment options, the one-year rate of return during 2020 ranged from 4.65% to 34.05%. |
| (3) | Year-end balances in this column include the deferral amount from the executive’s 2020 bonus paid in 2021. |
The Deferred Compensation Plan provides a tax-efficient method for participants to defer certain portions of their compensation. Participation in the Deferred Compensation Plan is available to certain of our senior officers, including our named executive officers, and members of our board of directors, and we believe this enhances our ability to attract and retain senior management.directors.
Eligible employees may defer a portion of their annual base salary and/or annual bonus, as applicable, each plan year.
| |
| 2021 PROXY STATEMENT | 57 |
EXECUTIVE COMPENSATION •POTENTIAL PAYMENTS OR BENEFITS UPON TERMINATION OR CHANGE IN CONTROL
Our named executive officers are eligible to participate on the same terms as other eligible employees. Although ourthe Compensation Committee deemed the Deferred
36
Compensation Plan to be an important benefit to participants, it is not included in any quantitative valuation with respect to the three main components of our executive compensation packages, because participation in the Deferred Compensation Plan, and to what extent, is at each participant’s discretion and there is no matching contribution from us at this time.
Pursuant to the Deferred Compensation Plan, eligible employees may elect to defer up to (i) 50% of his or hertheir cash-paid base salary; and (ii)up to 75% of his or hertheir annual cash bonus. We may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. At the time of making a deferral election, participants designate the time and form of the distribution of deferrals to be made for the year to which that election relates. Distributions may occur earlier upon a change in control or a termination of employment, subject to certain conditions provided for under the Deferred Compensation Plan and Section 409A of the Internal Revenue Code.
Participants have the opportunity to designate the investment funds to which the deferred amounts are to be credited. All investment gains and losses in a participant’s account under the Deferred Compensation Plan are immediately vested and entirely based upon the investment selections made by the participant. We do not pay guaranteed, above-market or preferential earnings on this deferred compensation. The available investment choices are similar to the choices available under the Sirius XM Radio 401(k) Savings Plan. Participants may change the investment selections for new payroll deferrals as frequently as each semi-monthly pay cycle. Investment selections for existing account balances may be changed daily. Any changes (whether to new deferrals or existing balances) may be made through an internet site or telephone call center maintained by the plan’s third-party record keeper. We have established a grantor (or “rabbi”) trust to facilitate payment of our obligations under the Deferred Compensation Plan.
The contributions, earnings and account balances for the named executive officers in the Deferred Compensation Plan are described in the “Non-Qualified Deferred Compensation” table.
Perquisites and Other Benefits for Named Executive Officers
The Compensation Committee supports providing other benefits to named executive officers that are almost identical to those offered to our other full time employees and are provided to similarly situated executives at companies with which we compete for executive talent.
In limited circumstances, a named executive officer may receive certain tailored benefits. For example, in 2015, Mr. Cady, due to his principal residence being in the State of Oregon, was reimbursed for the reasonable costs of coach class airfare from his home to our various offices, along with reasonable hotel and meal expenses. The costs of these benefits for Mr. Cady constituted less than 10% of his compensation in 2015.
Payments to Named Executive Officers Upon Termination or Change in Control
The employment agreements with our named executive officers provide for severance payments upon an involuntary termination of employment without “cause” or for “good reason” (as each term is defined in their employment agreement). These arrangements vary among executives due to individual negotiations. The material terms of these arrangements are described under “Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements.” None of the employment agreements for the named executive officers provide for any special payments solely due to a change in control. Under the terms of both the Sirius XM Radio Inc. 2009 Long-Term Stock Incentive Plan and the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan (collectively, the “Plans”), if the employment of any of our named executive officers is terminated by us without cause, or by the executive for good reason, within two years following a change in control, then in accordance with the Plans, their equity awards are subject to accelerated vesting.
We believe that these severance arrangements mitigate some of the risk that exists for executives working in our highly competitive industry. These arrangements are intended to attract and retain qualified executives who could have other job alternatives that may appear to them, in the absence of these arrangements, to be less risky, and such arrangements allow the executives to focus exclusively on our interests.
Fiscal Year 2016 Compensation Considerations
The Compensation Committee plans to review our executive compensation program in 2016 with a view to ensuring that it continues to provide the correct incentives and is properly sized given the scope and complexity of our business and the competition we face.
37
The Compensation Committee has again adopted a bonus program which is intended to comply with Section 162(m) of the Internal Revenue Code for our Chief Executive Officer and the other three most highly compensated executive officers (except for our Chief Financial Officer). That bonus program is designed to promote the achievement of our key financial goals for 2016.
The Compensation Committee does not believe that any risks that may arise from our compensation policies and practices are reasonably likely to have a material adverse effect on our Company. The Compensation Committee considered various factors that have the effect of mitigating compensation-related risks and have reviewed our compensation policies and practices for our employees, including the elements of our executive compensation programs, to determine whether any portion of such compensation encourages excessive risk taking.
Policy with Respect to Section 162(m) of the Internal Revenue Code
As described above, in 2016 the Compensation Committee again adopted a bonus plan which is intended to comply with Section 162(m) of the Internal Revenue Code for our Chief Executive Officer and the other three most highly compensated executive officers, except for our Chief Financial Officer. The Compensation Committee anticipates that this plan will result in tax deductibility for any compensation we pay to such executive officers that exceeds $1 million with respect to 2016. However, the Compensation Committee may from time to time approve compensation that is not deductible under Section 162(m) of the Internal Revenue Code if it determines that it is in our best interest to do so.
Compensation Committee Report
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis with management. Based on such review and discussion, the Compensation Committee recommended to the board of directors that the Compensation Discussion and Analysis be included in this proxy statement and incorporated by reference into our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
Compensation Committee
CARL E. VOGEL,Chairman
GEORGE W. BODENHEIMER
MARK D. CARLETON
JAMES P. HOLDEN
38
Summary Compensation Table
The following table provides information concerning total compensation earned or paid to our Chief Executive Officer, our Chief Financial Officer and our three other most highly compensated executive officers who served in such capacities as of December 31, 2015 for services rendered to us during each of the past three fiscal years. These five officers are referred to herein as the “named executive officers.”
| | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary
$ | | Bonus
$ | | Stock
Awards(1)
$ | | Option
Awards(1)
$ | | All Other
Compensation(2)
$ | | Total
$ |
James E. Meyer | | | | 2015 | | | | | 1,650,000 | | | | | 7,500,000 | | | | | 10,000,000 | | | | | 10,000,000 | | | | | 7,950 | | | | | 29,157,950 | |
Chief Executive Officer | | | | 2014 | | | | | 1,550,000 | | | | | 6,000,000 | | | | | — | | | | | — | | | | | 7,800 | | | | | 7,557,800 | |
| | | | 2013 | | | | | 1,468,590 | | | | | 4,720,000 | | | | | 3,249,998 | | | | | 13,568,656 | | | | | 58,063 | | | | | 23,065,307 | |
David J. Frear | | | | 2015 | | | | | 1,026,346 | | | | | 1,950,000 | | | | | — | | | | | 11,102,218 | | | | | 7,950 | | | | | 14,086,514 | |
Senior Executive Vice President and | | | | 2014 | | | | | 850,000 | | | | | 1,600,000 | | | | | — | | | | | — | | | | | 7,800 | | | | | 2,457,800 | |
Chief Financial Officer | | | | 2013 | | | | | 850,000 | | | | | 1,450,000 | | | | | — | | | | | — | | | | | 7,650 | | | | | 2,307,650 | |
Dara F. Altman | | | | 2015 | | | | | 554,231 | | | | | 1,200,000 | | | | | 1,375,000 | | | | | 4,125,000 | | | | | 7,950 | | | | | 7,262,181 | |
Executive Vice President and | | | | 2014 | | | | | 500,000 | | | | | 1,050,000 | | | | | — | | | | | — | | | | | 7,800 | | | | | 1,557,800 | |
Chief Administrative Officer | | | | 2013 | | | | | 500,000 | | | | | 975,000 | | | | | — | | | | | — | | | | | 7,650 | | | | | 1,482,650 | |
James A. Cady | | | | 2015 | | | | | 503,846 | | | | | 1,200,000 | | | | | 500,000 | | | | | 1,500,000 | | | | | 7,950 | | | | | 3,711,796 | |
Executive Vice President, Operations, | | | | 2014 | | | | | 366,667 | | | | | 450,000 | | | | | 125,023 | | | | | 1,375,021 | | | | | 7,800 | | | | | 2,324,511 | |
Products and Connected Vehicle | | | | 2013 | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
Joseph A. Verbrugge | | | | 2015 | | | | | 365,596 | | | | | 575,000 | | | | | 1,562,502 | | | | | 4,687,514 | | | | | 7,950 | | | | | 7,198,562 | |
Executive Vice President, | | | | 2014 | | | | | 355,000 | | | | | 425,000 | | | | | 250,047 | | | | | 750,021 | | | | | 7,800 | | | | | 1,787,868 | |
Sales and Development | | | | 2013 | | | | | 353,750 | | | | | 360,000 | | | | | 225,047 | | | | | 675,030 | | | | | 7,650 | | | | | 1,621,477 | |
|
| (1)
| | The aggregate grant date fair value of stock option and RSU awards were computed in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) Topic 718. The assumptions used in the valuation of the stock options are discussed in Note 15 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
|
|
| (2)
| | For each named executive officer, the amount in the “All Other Compensation” column for 2015 reflects matching contributions by us under our 401(k) savings plan.
|
Grants of Plan-Based Awards in 2015
The following table provides information with respect to equity grants made during fiscal year 2015 to the named executive officers.
| | | | | | | | | | |
Name | | Grant Date | | All Other
Stock Awards
Number of Shares
Of Stock or Units
(#)(1) | | All Other
Option Awards:
Number of Securities
Underlying Options
(#)(1) | | Exercise or
Base Price of
Option Awards
($/Sh)(2) | | Grant Date
Fair Value
of Stock and
Option Awards
($)(3) |
James E. Meyer | | | | 8/11/2015 | | | | | — | | | | | 13,279,313 | | | | | 3.90 | | | | | 10,000,000 | |
| | | | 8/11/2015 | | | | | 2,564,103 | | | | | — | | | | | — | | | | | 10,000,000 | |
David J. Frear | | | | 7/29/2015 | | | | | — | | | | | 14,250,000 | | | | | 3.95 | | | | | 11,102,218 | |
Dara F. Altman | | | | 6/19/2015 | | | | | — | | | | | 5,100,962 | | | | | 3.87 | | | | | 4,125,000 | |
| | | | 6/19/2015 | | | | | 355,297 | | | | | — | | | | | — | | | | | 1,375,000 | |
James A. Cady | | | | 7/29/2015 | | | | | — | | | | | 1,862,623 | | | | | 3.95 | | | | | 1,500,000 | |
| | | | 7/29/2015 | | | | | 126,582 | | | | | — | | | | | — | | | | | 500,000 | |
Joseph A. Verbrugge | | | | 8/5/2015 | | | | | — | | | | | 958,900 | | | | | 3.92 | | | | | 937,514 | |
| | | | 8/5/2015 | | | | | 79,720 | | | | | — | | | | | — | | | | | 312,502 | |
| | | | 12/11/2015 | | | | | — | | | | | 4,095,724 | | | | | 4.01 | | | | | 3,750,000 | |
| | | | 12/11/2015 | | | | | 311,721 | | | | | — | | | | | — | | | | | 1,250,000 | |
39
|
| (1)
| | Grants were made under the Sirius XM Holdings Inc. 2015 Long-Term Stock Incentive Plan. The stock option and RSU awards granted to Mr. Meyer on August 11, 2015 were in connection with his employment agreement dated August 11, 2015. The stock option awards granted to Mr. Frear on July 29, 2015 were in connection with his employment agreement dated July 3, 2015. The stock option and RSU awards granted to Ms. Altman on June 19, 2015 were in connection with her employment agreement dated June 19, 2015. The stock option and RSU awards granted to Mr. Cady on July 29, 2015 were in connection with his employment agreement dated June 29, 2015. The stock option and RSU awards granted to Mr. Verbrugge on August 5, 2015 were in connection with our long-term incentive program, and the stock option and RSU awards granted to Mr. Verbrugge on December 11, 2015 were in connection with his employment agreement dated December 11, 2015.
|
|
| (2)
| | The exercise price of the options granted to each the named executive officers is equal to the closing price of our common stock reported on NASDAQ on the dates of grant.
|
|
| (3)
| | The aggregate grant date fair value of stock option and RSU awards were computed in accordance with FASB ASC Topic 718. The assumptions used in the valuation of the stock options are discussed in Note 15 to our audited consolidated financial statements in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015.
|
Outstanding Equity Awards at Fiscal Year-End 2015
The following table provides information with respect to the status at December 31, 2015 of all unvested RSUs and exercisable and unexercisable stock options awarded to each of the named executive officers.
| | | | | | | | | | | | |
Name | | Option Awards | | Stock Awards |
| | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | | Option
Exercise
Price
($) | | Option
Expiration
Date | |
Number of
Shares or
Units that
have not
Vested
#
| | Market Value of
Shares or Units
of Stock that
have not
Vested(1)
$ |
James E. Meyer(2) | | | | 1,350,000 | | | | | — | | | | | 5.4900 | | | | | 2/2/2016 | | | | | — | | | | | — | |
| | | | 512,000 | | | | | — | | | | | 3.6500 | | | | | 2/1/2017 | | | | | — | | | | | — | |
| | | | 707,000 | | | | | — | | | | | 2.8200 | | | | | 1/23/2018 | | | | | — | | | | | — | |
| | | | 830,500 | | | | | — | | | | | 0.6235 | | | | | 8/31/2019 | | | | | — | | | | | — | |
| | | | 10,128,894 | | | | | — | | | | | 3.3000 | | | | | 5/02/2023 | | | | | — | | | | | — | |
| | | | — | | | | | 13,279,313 | | | | | 3.9000 | | | | | 8/11/2025 | | | | | — | | | | | — | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | 2,564,103 | | | | | 10,435,899 | |
David J. Frear(3) | | | | 307,000 | | | | | — | | | | | 3.6500 | | | | | 2/1/2017 | | | | | — | | | | | — | |
| | | | 483,000 | | | | | — | | | | | 2.8200 | | | | | 1/23/2018 | | | | | — | | | | | — | |
| | | | 1,500,000 | | | | | — | | | | | 3.0500 | | | | | 2/12/2018 | | | | | — | | | | | — | |
| | | | 6,000,000 | | | | | — | | | | | 2.1300 | | | | | 7/21/2021 | | | | | — | | | | | — | |
| | | | — | | | | | 14,250,000 | | | | | 3.9500 | | | | | 7/2/2025 | | | | | — | | | | | — | |
Dara F. Altman(4) | | | | 1,875,000 | | | | | — | | | | | 1.6400 | | | | | 8/23/2021 | | | | | — | | | | | — | |
| | | | — | | | | | 5,100,962 | | | | | 3.8700 | | | | | 6/19/2025 | | | | | — | | | | | — | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | 355,297 | | | | | 1,446,059 | |
James A. Cady(5) | | | | 235,797 | | | | | 707,389 | | | | | 3.5500 | | | | | 2/3/2024 | | | | | — | | | | | — | |
| | | | 89,565 | | | | | 268,695 | | | | | 3.3699 | | | | | 8/5/2024 | | | | | — | | | | | — | |
| | | | — | | | | | 1,862,623 | | | | | 3.9500 | | | | | 7/29/2025 | | | | | — | | | | | — | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | 154,407 | | | | | 628,436 | |
Joseph A. Verbrugge(6) | | | | — | | | | | 187,500 | | | | | 2.4800 | | | | | 8/14/2022 | | | | | — | | | | | — | |
| | | | 217,160 | | | | | 217,160 | | | | | 3.6100 | | | | | 8/19/2023 | | | | | — | | | | | — | |
| | | | 179,125 | | | | | 537,375 | | | | | 3.3699 | | | | | 8/5/2024 | | | | | — | | | | | — | |
| | | | — | | | | | 958,900 | | | | | 3.9200 | | | | | 8/5/2025 | | | | | — | | | | | — | |
| | | | — | | | | | 4,095,724 | | | | | 4.0100 | | | | | 12/11/2025 | | | | | — | | | | | — | |
| | | | — | | | | | — | | | | | — | | | | | — | | | | | 478,261 | | | | | 1,946,522 | |
40
|
| (1)
| | Amounts under “Market Value of Shares or Units of Stock that have not Vested” were calculated based on the closing price on NASDAQ of our common stock on December 31, 2015 of $4.07. The RSUs are valued at (a) the closing price of the stock at December 31, 2015 multiplied by (b) the number of RSUs that have not vested.
|
|
| (2)
| | Outstanding equity awards for Mr. Meyer vest as follows: options granted at an exercise price of $5.49 vested in four equal annual instalments from the date of grant on February 2, 2006; options granted at an exercise price of $3.65 vested in four equal annual instalments from the date of grant on February 1, 2007; options granted at an exercise price of $2.82 vested in four equal annual instalments from the date of grant on January 23, 2008; options granted at an exercise price of $0.6235 vested in four equal annual instalments from the date of grant on August 31, 2009; options granted at an exercise price of $3.30 vested on October 30, 2015; and options granted at an exercise price of $3.90 vest on April 30, 2018. The RSUs granted to Mr. Meyer vest on April 30, 2018.
|
|
| (3)
| | Outstanding equity awards for Mr. Frear vest as follows: options granted at an exercise price of $3.65 vested in four equal annual instalments from the date of grant on February 1, 2007; options granted at an exercise price of $2.82 vested in four equal annual instalments from the date of grant on January 23, 2008; options granted at an exercise price of $3.05 vested in three equal annual instalments from the date of grant on February 12, 2008; options granted at an exercise price of $2.13 vested in four equal annual instalments from the date of grant on July 21, 2011; and options granted at an exercise price of $3.95 vest in three equal instalments on July 2, 2016, July 2, 2017 and May 30, 2018.
|
|
| (4)
| | Outstanding equity awards for Ms. Altman vest as follows: options granted at an exercise price of $1.64 vested in four equal annual instalments from the date of grant on August 23, 2011; and options granted at an exercise price of $3.87 vest in three equal annual instalments from the date of grant on June 19, 2015. The RSUs granted to Ms. Altman vest in three equal annual instalments from the date of grant on June 19, 2015.
|
|
| (5)
| | Outstanding equity awards for Mr. Cady vest as follows: options granted at an exercise price of $3.55 vest in four equal annual instalments from the date of grant on February 3, 2014; options granted at an exercise price of $3.3699 vest in four equal annual instalments from the date of grant on August 5, 2014; and options granted at an exercise price of $3.95 vest in three equal annual instalments from the date of grant on July 29, 2015. The RSUs granted to Mr. Cady vest as follows: 42,194 RSUs vest on July 29, 2016; 9,275 RSUs vest on August 5, 2016; 42,194 RSUs vest on July 31, 2017; 9,275 RSUs vest on August 7, 2017; 42,194 RSUs vest on July 30, 2018; and 9,275 RSUs vest on August 6, 2018.
|
|
| (6)
| | Outstanding equity awards for Mr. Verbrugge vest as follows: options granted at an exercise price of $2.48 vest in four equal instalments from the date of grant on August 14, 2012; options granted at an exercise price of $3.61 vest in four equal annual instalments from the date of grant on August 19, 2013; options granted at an exercise price of $3.3699 vest in four equal annual instalments from the date of grant on August 5, 2014; options granted at an exercise price of $3.92 vest in four equal annual instalments from the date of grant on August 5, 2015; and options granted at an exercise price of $4.01 vest in three equal annual instalments from the date of grant on December 11, 2015. The RSUs granted to Mr. Verbrugge vest as follows: 38,480 RSUs vest on August 5, 2016; 15,585 RSUs vest on August 19, 2016; 103,907 RSUs vest on December 12, 2016; 38,480 RSUs vest on August 7, 2017; 15,585 RSUs vest on August 21, 2017; 103,907 RSUs vest on December 11, 2017; 38,480 RSUs vest on August 6, 2018; 103,907 RSUs vest on December 11, 2018; and 19,930 RSUs vest on August 5, 2019.
|
All equity awards vest subject to the named executive officer’s continued employment though the applicable vesting date and are subject to earlier vesting upon certain qualifying terminations of employment. See “Potential Payments or Benefits Upon Termination or Change in Control.”
41
Option Exercises and Stock Vested in 2015
The following table provides information with respect to option exercises and restricted stock and RSUs that vested during 2015.
| | | | | | | | |
Name | | Option Awards | | Stock Awards |
| | Number of
Shares Acquired
on Exercise
(#) | | Value Realized
on Exercise
($)(1) | | Number of
Shares Acquired
on Vesting
(#) | | Value Realized
on Vesting
($)(2) |
James E. Meyer | | | | 6,296,246 | | | | | 21,752,271 | | | | | 984,848 | | | | | 4,067,422 | |
David J. Frear | | | | 2,000,000 | | | | | 3,780,000 | | | | | — | | | | | — | |
Dara F. Altman | | | | 2,816,400 | | | | | 6,537,719 | | | | | — | | | | | — | |
James A. Cady | | | | — | | | | | — | | | | | 9,275 | | | | | 36,636 | |
Joseph A. Verbrugge | | | | 1,045,350 | | | | | 1,986,884 | | | | | 34,135 | | | | | 134,599 | |
|
| (1)
| | Value realized on exercise is the amount equal to the difference between (a) the price on NASDAQ of the stock acquired upon exercise on the exercise date less (b) the exercise price, multiplied by the number of options exercised.
|
|
| (2)
| | Value realized on vesting is the amount equal to (a) the closing price on NASDAQ on the day prior to the vesting dated multiplied by (b) the number of shares vesting.
|
Non-Qualified Deferred Compensation
The following table provides information with respect to the nonqualified deferred compensation plan for 2015.
| | | | | | | | | | |
Name | | Executive
Contributions(1)
$ | | Employer
Contributions
$ | | Aggregate
Earnings
$ | | Aggregate
Withdrawals/
Distributions
$ | | Aggregate
Balance at Last
Year-End
$ |
James E. Meyer | | | | 1,509,041 | | | | | — | | | | | — | | | | | — | | | | | 1,509,041 | |
David J. Frear | | | | 613,048 | | | | | — | | | | | — | | | | | — | | | | | 613,048 | |
Dara F. Altman | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
James A. Cady | | | | — | | | | | — | | | | | — | | | | | — | | | | | — | |
Joseph A. Verbrugge | | | | 180,771 | | | | | — | | | | | — | | | | | — | | | | | 180,771 | |
|
| (1)
| | Employee contributions included in this column are also included in the Summary Compensation Table in the column labelled “Bonus” for 2015.
|
Participation in the Deferred Compensation Plan is available to certain of our senior officers, including our named executive officers. Eligible employees may defer a portion of their annual base salary and/or annual bonus, as applicable, each plan year. Our named executive officers are eligible to participate on the same terms as other eligible employees. Eligible employees may elect to defer up to (i) 50% of his or her cash-paid base salary; and (ii) 75% of his or her annual cash bonus. We may elect to make additional contributions beyond amounts deferred by participants, but we are under no obligation to do so. At the time of making a deferral election, participants designate the time and form of the distribution of deferrals to be made for the year to which that election relates. Distributions may occur earlier upon a change in control or a termination of employment, subject to certain conditions provided for under the Deferred Compensation Plan and Section 409A of the Internal Revenue Code. Participants have the opportunity to designate the investment funds to which the deferred amounts are to be credited. All investment gains and losses in a participant’s account under the Deferred Compensation Plan are entirely based upon the investment selections made by the participant. We have established a grantor (or “rabbi”) trust to facilitate payment of our obligations under the Deferred Compensation Plan.
42
Potential Payments or Benefits Upon Termination or Change in Control
Employment Agreements
EMPLOYMENT AGREEMENTS
We have entered into employment agreements with each of our named executive officers that contain provisions regarding payments or benefits upon a termination of employment. We do not have any provisions in any of our employment agreements for the named executive officers that provide for any payments solely in the event of a change in control.
None of the employment agreements with our named executive officers provides for a so-called “golden parachute” excise tax gross up.gross-up. Each of the employment agreements with our executive officers includes a compensation clawback provision, pursuant to which any incentive-based or other compensation paid to an executive officer by us or any of our affiliates is subject to deductions and clawback as required by applicable law, regulation or stock exchange listing requirement.
James E. Meyer
In August 2015,October 2019, we entered into a newan employment agreement with Mr. Meyer to continue to serve as our Chief Executive Officer through April 30, 2018.December 31, 2020. In connection with the execution of this agreement, on January 2, 2020, we granted RSUs to Mr. Meyer with a grant date value of $10,000,000. Those RSUs cliff vested on December 31, 2020. Mr. Meyer’s base salary of $2,000,000 remained unchanged.
On December 31, 2020, Mr. Meyer retired as our Chief Executive Officer. In accordance with the terms of his employment agreement, we entered into a three-year consulting agreement with Mr. Meyer pursuant to which he is paid a fee of $3,200,000 per year. During the term of this Consulting Agreement, we will cover the expenses related to Mr. Meyer’s medical, dental and life insurance coverage for himself and his dependents.
| |
| 58 | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION •POTENTIAL PAYMENTS OR BENEFITS UPON TERMINATION OR CHANGE IN CONTROL
In October 2019, we also renewed our agreement with Mr. Meyer that entitled him to 100 hours of personal flight time in 2020 on a private aircraft. This agreement expired on December 31, 2020 upon Mr. Meyer’s retirement. Mr. Meyer’s personal use of the aircraft was treated as income to Mr. Meyer in accordance with the applicable tax rules. We have no obligation to provide Mr. Meyer with any “gross up” in respect of any taxes related to this benefit.
Scott A. Greenstein
In December 2020, we entered into an employment agreement with Mr. Greenstein to continue to serve as our President and Chief Content Officer through May 24, 2024, subject to earlier termination in accordance with the terms of the employment agreement. The employment agreement provides for an increase in Mr. Meyer’sannual base salary from $1,550,000of $1,600,000, subject to $1,800,000, subject toannual 3% increases in May 2021, May 2022 and May 2023, and additional increases approved by the Compensation Committee, and obligates us to offerCommittee. Mr. Meyer a three-year consulting agreement upon the expiration of his employment agreement on April 30, 2018. Mr. MeyerGreenstein is also entitled to participate in any bonus plans generally offered to our executive officers, with an annual target bonus opportunity of 250%150% of his annual base salary for the years December 31, 2020 and December 31, 2021, 200% of his annual base salary for the years December 31, 2022 and December 31, 2023, and a pro-rated bonus for the year ending December 31, 2024 based on a target bonus of 200% of his annual base salary.
If Mr. Meyer’sGreenstein’s employment is terminated by us without “cause” or he terminates his employment for “good reason” (each as described in his employment agreement), then, subject to his execution of a release of claims and his compliance with certain restrictive covenants contained in his employment agreement, we are obligated to (i) continue his health benefits for eighteen months and his life insurance benefits for one year, (ii)(1) pay himMr. Greenstein a lump sum amount equal to his annual base salary plusone and one-half times the amountsum of $6,600,000, as consideration for a loss of three-year consulting agreement, and (iii) pay him a lump sum equal to the greater of (x) a bonus equal to 60% of his then annual base salary orplus (y) the prior year’sgreater of $2,600,000 or the last annual bonus actually paid (or due and payable) to him. We are also obligated tohim, (2) pay Mr. MeyerGreenstein a pro-rated bonus for the year in which his termination occurs (based on actual achievement of applicable performance criteria) and any earned but unpaid annual bonus forwith respect to the year prior to the year of termination, and (3) continue his health and life insurance benefits for eighteen months following his termination and a prorated bonus for the yeardate, in which his employment is terminated. Further, Mr. Meyer’s equity awards are subject to accelerated vesting.each case, at our expense.
David J. FrearJennifer C. Witz
In July 2015,March 2019, we entered into a newan employment agreement with David J. Frear to continueMs. Witz to serve as our Senior Executive Vice President, Sales, Marketing and Chief Financial OfficerOperations, through May 31, 2018.March 5, 2022, subject to earlier termination in accordance with the terms of her employment agreement. The employment agreement providesprovided for an annual base salary of $1,200,000, subject to increases approved by the Compensation Committee. Ms. Witz was also entitled to participate in any bonus plans generally offered to our executive officers.
Under this employment agreement, if Ms. Witz’s employment was terminated by us without “cause” or she terminated her employment for “good reason” (each as described in her employment agreement), then, subject to her execution of a release of claims and her compliance with certain restrictive covenants contained in her employment agreement, we were obligated to (1) pay Ms. Witz a lump sum amount equal to the sum of (x) her annual base salary in effect as of the termination date plus (y) the greater of $2,200,000 or the last annual bonus paid (or due and payable) to her, and (2) continue her health insurance benefits for eighteen months and her life insurance benefits for one year following her termination date, in each case, at our expense.
In September 2020, we entered into a new employment agreement with Ms. Witz that became effective on January 1, 2021 when she assumed the role of Chief Executive Officer. This new employment agreement continues through December 31, 2023 and specifies an annual base salary of $1,750,000, subject to annual increases approved by the Compensation Committee, with any increases being no less than 3% in 2022 and 2023. This employment agreement entitles Ms. Witz to participate in any bonus plan generally applicable to our executive officers and provides for an annual target bonus equal to three times her base salary.
| |
| 2021 PROXY STATEMENT | 59 |
EXECUTIVE COMPENSATION •POTENTIAL PAYMENTS OR BENEFITS UPON TERMINATION OR CHANGE IN CONTROL
Under her 2020 employment agreement, if Ms. Witz’s employment is terminated by us without “cause” or she terminates her employment for “good reason” (each as described in her employment agreement), then, subject to her execution of a release of claims and her compliance with certain restrictive covenants contained in her employment agreement, we are obligated to (1) pay Ms. Witz a lump sum amount equal to one and one-half times the sum of (x) her annual base salary in effect as of the termination date plus (y) the greater of her target bonus or the last annual bonus paid (or due and payable) to her, (2) pay Ms. Witz a pro-rated bonus for the year in which her termination occurs (based on actual achievement of applicable performance criteria) and any earned but unpaid annual bonus with respect to the year prior to the year of termination and (3) continue her health insurance benefits for eighteen months and her life insurance benefits for one year following her termination date, in each case, at our expense.
We also entered into an agreement with Ms. Witz that entitles her to a limited number of hours of personal flight time on a private aircraft. This agreement became effective on January 1, 2021 upon her appointment as Chief Executive Officer, and will expire on the first to occur of (i) the date that Ms. Witz ceases to be employed by us as a full-time employee under her employment agreement, and (ii) December 31, 2023. Ms. Witz’s personal use of the aircraft will be treated as income to her, and we are not required to provide her with any “gross up” for additional related taxes.
Sean S. Sullivan
In September 2020, we entered into an employment agreement with Mr. FrearSullivan to serve as our Executive Vice President and Chief Financial Officer through October 26, 2023, subject to earlier termination in accordance with the terms of his employment agreement. The agreement provides for an annual base salary of $1,100,000, subject to increases approved by the Compensation Committee. Mr. Sullivan is also entitled to participate in any bonus plans generally offered to our executive officers.officers, with an annual target bonus of 150% of his annual base salary. For the year ending December 31, 2020, we agreed to pay Mr. Sullivan a bonus of at least $700,000.
If Mr. Frear’sSullivan’s employment is terminated by us without “cause” or he terminates his employment for “good reason” (each as described in his employment agreement), then, subject to his execution of a release of claims and his compliance with certain restrictive covenants contained in his employment agreement, we are obligated to (1) pay himMr. Sullivan a lump sum amount equal to the sum of (x) his then annual base salary asplus (y) the greater of $1,650,000 or the datelast annual bonus paid (or due and payable) to him, (2) pay Mr. Sullivan a pro-rated bonus for the year in which his termination occurs (based on actual achievement of applicable performance criteria) and any earned but unpaid annual bonus with respect to the year prior to the year of termination, and the cash value of the bonus last paid or payable to him in respect of the preceding calendar year and to(3) continue his health insurance benefits for eighteen months and his life insurance benefits for one year. Further, Mr. Fear’s equity awards are subject to accelerated vesting.year following his termination date, in each case, at our expense.
Dara F. AltmanDavid J. Frear
In June 2015,2018, we entered into a newan employment agreement with Dara F. AltmanMr. Frear to serve as our Senior Executive Vice President and Chief Financial Officer through May 31, 2021. The employment agreement provided for an annual base salary of $1,400,000, subject to increases approved by the Compensation Committee. Mr. Frear was also entitled to participate in any bonus plans generally offered to our executive officers.
Mr. Frear left the Company on September 14, 2020 to pursue other opportunities. His separation was treated as a termination without “cause” (as described in his employment agreement). Pursuant to the terms of the separation agreement and release of claims that we entered into with Mr. Frear, Mr. Frear has received: (1) a lump sum amount equal to the sum of (x) his annual base salary in effect as of the termination date and (y) an amount equal to the annual bonus last paid to him, (2) a pro-rated bonus for the year ending December 31, 2020 (based on actual achievement of applicable performance criteria), which was paid in 2021, and (3) continuation of his health insurance benefits for eighteen months and his life insurance benefits for one year following his termination date, in each case, at our expense. We have assumed in each case that Mr. Frear has complied and continues to comply with the restrictive covenants contained in his employment agreement.
| |
| 60 | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION •POTENTIAL PAYMENTS OR BENEFITS UPON TERMINATION OR CHANGE IN CONTROL
Patrick L. Donnelly
In November 2019, we entered into an employment agreement with Mr. Donnelly to continue to serve as our Executive Vice President, General Counsel and Chief Administrative OfficerSecretary through June 18, 2018.November 22, 2022, subject to earlier termination in accordance with the terms of his employment agreement. The employment agreement provides for an annual base salary of $600,000,$1,025,000, subject to increases approved by the Compensation Committee. Ms. AltmanMr. Donnelly is also entitled to participate in any bonus plans generally offered to our executive officers.
43
If Ms. Altman’s employment is terminated by us without “cause” or she terminates her employment for “good reason” (each as described in her employment agreement), subject to an execution of a release of claims, we are obligated to pay her a lump sum payment equal to her then annual base salary and the cash value of the bonus last paid or payable to her in respect of the preceding calendar year and to continue her health insurance benefits for eighteen months and her life insurance benefits for one year. Further, Ms. Altman’s equity awards are subject to accelerated vesting.
James A. Cady
In June 2015, we entered into an employment agreement with James A. Cady to serve as our Executive Vice President, Operations, Products and Connected Vehicle, with an annual base salary of $600,000, subject to increases approved by the Compensation Committee. Mr. Cady is also entitled to participate in any bonus plans generally offered to our executive officers, with an annual target bonus opportunity of 150% of his annual base salary.
In February 2016, we entered into an amendment to Mr. Cady’s employment agreement. This amendment: increased his entitlement to severance from six months to twelve months of base salary; and extended our obligation to provide health benefits after termination from six months to twelve months. In addition, this amendment required us to pay him an amount equal to the bonus last paid to him in respect of the calendar year immediately preceding the calendar year in which a qualifying termination occurs. In consideration for this amendment, Mr. Cady extended the length of time that he is subject to the restrictive covenants in his employment agreement from six months to twelve months.
As a result, in the event Mr. Cady’sDonnelly’s employment is terminated by us without “cause” or he terminates his employment for “good reason” (each as described in his employment agreement), then, subject to his execution of a release of claims and his compliance with certain restrictive covenants contained in his employment agreement, we are obligated to (1) pay him for one yearMr. Donnelly a lump sum amount equal to the sum of (x) his annual base salary in effect as of the termination date plus (y) the greater of $1,537,500 or the last annual bonus paid (or due and an amount equal to the bonus last paidpayable) to him, in respect of the calendar year immediately preceding the calendar year in which the termination occurs, and to(2) continue his health insurance benefits for eighteen months and his life insurance benefits for one year. Further, Mr. Cady’s equity awards are subjectyear following his termination date, in each case, at our expense.
TREATMENT OF EQUITY-BASED AWARDS UPON TERMINATION OF EMPLOYMENT
Pursuant to accelerated vesting.
Joseph A. Verbrugge
In December 2015, we entered into a new employment agreement with Joseph A. Verbrugge to serve as our Executive Vice President, Salesthe terms of the applicable award agreements, the vesting of any unvested RSUs, PRSUs and Development, with an annual base salary of $500,000, subject to increases approvedstock options held by the Compensation Committee. Mr. Verbrugge is also entitled to participate in any bonus plans generally offered to ournamed executive officers.
In the event Mr. Verbrugge’s employment is terminatedofficers will accelerate upon a termination (i) by us without “cause”“Cause”, (ii) by the named executive officer for “Good Reason”, or he terminates his(iii) a result of the named executive officer’s death or disability. With respect to outstanding PRSU awards, if any such termination of employment for “good reason” (each as describedoccurs during an active performance period, then the named executive officer will vest in his employment agreement),the number of PRSUs subject to his executionthe applicable award agreement (or, beginning in 2021, with respect to the new PRSU awards that are based on TSR, at target level). If such termination of employment occurs following the end of the applicable performance period, but before the date on which such PRSUs have been settled, then the named executive will vest in the number of PRSUs determined to have been earned based on actual performance achieved during the performance period. In order to receive any accelerated vesting in connection with a termination of employment, named executive officers must execute a release of claims we are obligated to pay him for one year his annual base salary and an amount equal to(except the bonus last paid to himCompany’s General Counsel may waive such requirement in respectthe event of the calendar year immediately precedingnamed executive officer’s death) and comply with certain restrictive covenants contained in their employment agreements. If the calendar year in which the termination occurs and to continue his health insurance benefitsnamed executive officer’s employment terminates for one year. Further, Mr. Verbrugge’sany other reason, all unvested equity awards that are subject to accelerated vesting.outstanding will be forfeited.
2003 Long-Term Stock Incentive Plan
Messrs. Meyer and Frear also have outstanding options as of December 31,SIRIUS XM RADIO INC. 2015 that were granted under our 2003 Long-Term Stock Incentive Plan. Under the 2003 Long-Term Stock Incentive Plan, the outstanding equity awards granted to these named executive officers are subject to potential accelerated vesting upon a change of control. All of the outstanding options granted under the 2003 plan were vested as of December 31, 2015, and, therefore, are not included in the table of potential payments and benefits below.
2009 Sirius XM Radio Inc. Long-Term Stock Incentive Plan and 2015 Sirius XM Holdings Inc. Long-Term Stock Incentive PlanLONG-TERM STOCK INCENTIVE PLAN
All of ourthe named executive officers had outstanding equity awards as of December 31, 20152020 that were granted under the 2009 Sirius XM Radio Inc. Long-Term Stock Incentive Plan and the
44
2015 Sirius XM Holdings Inc. Long-Term Stock Incentive Plan. Under the terms of these Plans,the 2015 Plan, the outstanding unvested equity awards granted to the named executive officers are subject to potential accelerated vesting upon termination without “cause” by the companyCompany or termination by the executive for “good reason” during a two year period following a “change of control” (each as defined in the Plans)2015 Plan), to the extent outstanding awards granted under these Plansthe 2015 Plan are either assumed, converted or replaced by the resulting entity in the event of a change of control.
| |
| 2021 PROXY STATEMENT | 61 |
Potential Payments and BenefitsEXECUTIVE COMPENSATION •POTENTIAL PAYMENTS OR BENEFITS UPON TERMINATION OR CHANGE IN CONTROL
POTENTIAL PAYMENTS AND BENEFITS
The following table describes the potential payments and benefits under the named executive officers’ agreements and our stock incentive plansplan to which they would have been entitled if a termination of employment or change in control had occurred as of December 31, 2015:2020:
| | | | | | | | | | | |
Name | | Triggering Event | | Severance
Payment(1)
($) | | Accelerated
Equity
Vesting(2)
($) | | Continuation of
Insurance
Benefits
($)(3) | | Total
($) |
James E. Meyer(4) | | Termination due to death or disability | | | | 6,600,000 | | | | | 12,693,382 | | | | | — | | | | | 19,293,382 | |
| | Termination without cause or for good reason | | | | 14,400,000 | | | | | 12,693,382 | | | | | 28,072 | | | | | 27,121,454 | |
| | Termination without cause or for good reason following a change in control | | | | 14,400,000 | | | | | 12,693,382 | | | | | 28,072 | | | | | 27,121,454 | |
David J. Frear | | Termination due to death or disability | | | | — | | | | | 1,710,000 | | | | | — | | | | | 1,710,000 | |
| | Termination without cause or for good reason | | | | 2,800,000 | | | | | 1,710,000 | | | | | 27,395 | | | | | 4,537,395 | |
| | Termination without cause or for good reason following a change in control | | | | 2,800,000 | | | | | 1,710,000 | | | | | 27,395 | | | | | 4,537,395 | |
Dara F. Altman | | Termination due to death or disability | | | | — | | | | | 2,466,251 | | | | | — | | | | | 2,466,251 | |
| | Termination without cause or for good reason | | | | 1,650,000 | | | | | 2,466,251 | | | | | 40,612 | | | | | 4,156,863 | |
| | Termination without cause or for good reason following a change in control | | | | 1,650,000 | | | | | 2,466,251 | | | | | 40,612 | | | | | 4,156,863 | |
James A. Cady(5) | | Termination due to death or disability | | | | — | | | | | 738,704 | | | | | — | | | | | 738,704 | |
| | Termination without cause or for good reason | | | | 300,000 | | | | | 738,704 | | | | | 9,104 | | | | | 1,047,808 | |
| | Termination without cause or for good reason following change-in-control | | | | 300,000 | | | | | 1,407,907 | | | | | 9,104 | | | | | 1,717,011 | |
Joseph A. Verbrugge | | Termination due to death or disability | | | | — | | | | | 1,514,448 | | | | | — | | | | | 1,514,448 | |
| | Termination without cause or for good reason | | | | 925,000 | | | | | 1,514,448 | | | | | 26,568 | | | | | 2,466,016 | |
| | Termination without cause or for good reason following a change in control | | | | 925,000 | | | | | 3,110,336 | | | | | 26,568 | | | | | 4,061,904 | |
| Name | | Triggering Event | | Severance
Payment
($)(1) | | Accelerated
Equity
Vesting
($)(2) | | Continuation
of Insurance
Benefits
($)(3) | | Total
($)(4) |
| James E. Meyer(5) | | Termination due to death or disability | | — | | — | | 32,033 | | 32,033 |
| | | Termination without cause or for good reason | | — | | — | | 32,033 | | 32,033 |
| | | Termination without cause or for good reason following a change in control | | — | | — | | 32,033 | | 32,033 |
| Scott A. Greenstein | | Termination due to death or disability | | — | | 17,668,924 | | — | | 17,668,924 |
| | | Termination without cause or for good reason | | 8,620,000 | | 17,668,924 | | 47,958 | | 26,336,882 |
| | | Termination without cause or for good reason following a change in control | | 8,620,000 | | 17,668,924 | | 47,958 | | 26,336,882 |
| Jennifer C. Witz(6) | | Termination due to death or disability | | — | | 10,703,007 | | — | | 10,703,007 |
| | | Termination without cause or for good reason | | 2,479,723 | | 10,703,007 | | 40,419 | | 13,223,149 |
| | | Termination without cause or for good reason following a change in control | | 2,479,723 | | 10,703,007 | | 40,419 | | 13,223,149 |
| Sean S. Sullivan(7) | | Termination due to death or disability | | — | | 12,324,327 | | — | | 12,324,327 |
| | | Termination without cause or for good reason | | 3,450,000 | | 12,324,327 | | 40,419 | | 15,814,746 |
| | | Termination without cause or for good reason following a change in control | | 3,450,000 | | 12,324,327 | | 40,419 | | 15,814,746 |
| David J. Frear(8) | | Termination without cause or for good reason | | 5,610,000 | | 5,343,979 | | 50,000 | | 11,003,679 |
| Patrick L. Donnelly | | Termination due to death or disability | | — | | 5,037,797 | | — | | 5,037,797 |
| | | Termination without cause or for good reason | | 2,625,000 | | 5,037,797 | | 47,568 | | 7,710,365 |
| | | Termination without cause or for good reason following change in control | | 2,625,000 | | 5,037,797 | | 47,568 | | 7,710,365 |
|
| (1) | | Any severance payments dues to Messrs. Meyer and Frear and Ms. Altman arepayment due is required to be paid in a lump sum. The employment agreements with Messrs. Cady and Verbrugge require us to pay any severance in the form of salary continuation and to pay any amounts due on account of their bonus on the date that bonuses are customarily paid to other employees. |
|
| (2) | | AmountsAll amounts, except for those applicable to Mr. Frear, were calculated based on the closing price on NASDAQ of our common stock on December 31, 20152020 (the last trading day of $4.07.the fiscal year) of $6.37. The accelerated vesting of options is valued at (a) the difference between the December 31, 2020 closing price and the exercise price of the options multiplied by (b) the number of shares of common stock underlying the options. The accelerated vesting of RSUs and PRSUs is valued at the closing price on NASDAQ of our common stock on December 31, 2020 of $6.37 multiplied by the number of shares subject to the applicable RSUs and PRSUs. The PRSUs vest assuming 100% of RSUs.
|
| target level achievement for the performance period during which a termination occurs. For Mr. Greenstein, this amount assumes that the entire PRSU award provided for under his employment agreement would have become vested at target level. The amounts also include DEUs. |
| | Amounts for Mr. Frear are based on the actual taxable income of his awards that were accelerated on September 29, 2020. At the time of their acceleration, the fair market value associated with these RSU and PRSU was $5.30 per share. Mr. Frear’s options, at time of acceleration, were underwater and reflect a $0.00 value. |
| (3) | | Assumes that health benefits would be continued under COBRA for eighteen months for months. |
| (4) | We do not provide any tax gross-ups. In the event a named executive officer would be subject to an excise tax under Section 4999 of the Internal Revenue Code (imposed on individuals who receive compensation in connection with a change of control that exceeds certain specified limits), the benefits to the named executive officer will be reduced to the extent that such benefits do not trigger the excise tax, unless the named executive officer would retain greater value (on an after-tax basis) by receiving all benefits and paying applicable excise, income and payroll taxes. Amounts shown are based on preliminary calculations that indicate that, with the exception of Ms. Witz and Mr. Sullivan, the amounts payable to each named executive officer would not be subject to the excise tax. Estimated amounts may materially differ from any actual amounts ultimately paid. |
| (5) | Mr. Meyer and Ms. Altman, twelve months for Messrs. Frear and Verbrugge and six months for Mr. Cady. |
|
| (4)
| | Mr. Meyer is also eligible to receive a prorated bonus for the year in which his employment is terminated. Payment is based on actual performance for such year and payable at such timeretired as
|
45
|
| | | the bonuses for such year are paid to other senior executives of the Company. This potential payment is not determinable and is not Chief Executive Officer effective December 31, 2020. The amounts reflected in the table above.
above assume a hypothetical termination “without cause” as of December 31, 2020. We entered into a three-year consulting agreement with him on January 1, 2021. The Consulting Agreement provides for consulting fees of $3,200,000 per year, which will be paid as part of |
|
| | (5)
|
| 62 | 2021 PROXY STATEMENT |
EXECUTIVE COMPENSATION • 2020 CEO PAY RATIO
| our regular payroll cycle. In addition, during the term of the Consulting Agreement, Mr. Meyers and his dependents are eligible to participate in our medical, dental and life insurance plans, subject to the terms and conditions of such plans. Mr. Meyer’s existing stock options remain outstanding so long as he continues to serve as Vice Chairman of the Board. |
| (6) | The total amount shown reflects that, in the event of Ms. Witz’s termination following a change in control, the payments would be reduced by $1,040,277 to avoid the applicable excise tax under Section 4999 of the Internal Revenue Code in accordance with her employment agreement. |
| (7) | Based on preliminary calculations, the amounts payable to Mr. Sullivan in the event of his termination following a change in control would be subject to an excise tax of $1,841,061. The total amount shown does not reflect, in the event of Mr. Sullivan’s termination following a change in control, a reduction in the payments as a result of the projected amount of the applicable excise tax under Section 4999 of the Internal Revenue Code. |
| (8) | Mr. Frear’s employment with the Company ended on September 14, 2020. The table above reflect amounts actually paid in connection with Mr. Frear’s departure. |
2020 CEO Pay Ratio
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees to the annual total compensation of our Chief Executive Officer.
We determined that, as of December 31, 2020 (the date we identified for purposes of determining our employee population), our employee population consisted of approximately 5,752 individuals, of which 214 employees were located outside the United States. This population consisted of our full-time, part-time, seasonal and temporary workers and did not include any individuals classified as independent contractors. In accordance with the de minimus exemption under Item 402(u) of Regulation S-K, we excluded the group of 214 non-U.S. employees from our total employee population, specifically: 16 employees from Britain, three employees from Belgium, five employees from Canada, one employee from Germany, one employee from France, one employee from Italy, two employees from Malaysia, six employees from the Philippines, and 179 employees from Romania. These non-U.S. individuals represented less than 4% of our total estimated employee population as of December 31, 2020 of 5,752 individuals. After excluding the non-U.S. employees, and the Chief Executive Officer, we included 5,537 employees in our calculations to identify the median employee.
To identify the median employee from this employee population, we calculated each employee’s total compensation by reviewing employees’ W-2 wages for 2020. Once we identified the employee who fell at the mid-point of our employee population, we calculated all of the elements of that employee’s compensation for the 2020 fiscal year in accordance with the requirements of Item 402(c)(2)(x) of Regulation S-K to determine the “annual total compensation” for such employee for purposes of calculating the required pay ratio. The annual total compensation of the median employee for 2020 was $126,499. To calculate the annual total compensation of our Chief Executive Officer, we used the amount reported for Mr. Meyer in the “Total” column of the 2020 Summary Compensation Table included in this proxy statement, which was $19,528,229.
Based on Mr. Meyer’s annual total compensation compared to the annual total compensation of our estimated median employee, our estimated pay ratio is 154:1.
This pay ratio is a reasonable estimate calculated in a manner consistent with SEC rules based on our payroll and employment records and the methodology described above. The SEC rules for identifying the median compensated employee and calculating the pay ratio based on that employee’s annual total compensation allow companies to adopt a variety of methodologies, to apply certain exclusions, and to make reasonable estimates and assumptions that reflect their compensation practices. The pay ratio reported by other companies may not be comparable to the pay ratio reported above, as other companies may have different employment and compensation practices and may utilize different methodologies, exclusions, estimates and assumptions in calculating their own pay ratios.
| |
The amounts do not give effect to the February 2016 amendment to Mr. Cady’s employment agreement which is described under “Potential Payments or Benefits Upon Termination or Change in Control—Employment Agreements—James A. Cady.”
2021 PROXY STATEMENT | 63 |
46
Item 2—Ratification of Independent Registered Public Accountants
ITEM 2—RATIFICATION OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTANTS
The Audit Committee is directly responsible for the appointment, compensation (including approval of the audit fee), retention and oversight of the independent registered public accounting firm that audits our financial statements and our internal control over financial reporting. In addition, the Audit Committee assists the board of directors in its oversight of:
|
| ● | •
| | The integrity of our financial statements and our accounting and financial reporting processes and systems of internal control over financial reporting; |
|
| | •
|
| ● | | Our compliance with legal and regulatory requirements; |
|
| | •
|
| ● | | Our independent auditors’ qualifications, independence and performance; |
|
| | •
|
| ● | | The performance of our internal audit function; and |
|
| | •
|
| ● | | Our assessment of risks and risk management guidelines and policies. |
The Audit Committee is composed solely of independent directors meeting the requirements of applicable SEC and NASDAQ rules. Each member is financially literate for audit committee purposes under the NASDAQ rules. The key responsibilities of the Audit Committee are set forth in its charter, which was adopted by us and approved by the board of directors and is posted under “Corporate Governance” in the Investor Relations section of our website at www.siriusxm.com.
The Audit Committee has selected KPMG LLP (“KPMG”) as our independent registered public accountants for 2016. KPMG has served as our independent registered public accountants since 2008. The Audit Committee regularly reviews KPMG’s independence and performance in deciding whether to retain KPMG or engage another firm as our independent registered public accountants. In the course of these reviews, the Audit Committee considers, among other things:
|
| •
| | KPMG’s historical and recent performance on our audit;
|
|
| •
| | KPMG’s capability and expertise in handling the breadth and complexity of our operations;
|
|
| •
| | KPMG’s known legal risks and any significant legal or regulatory proceedings in which it is involved;
|
|
| •
| | data on audit quality and performance, including recent Public Company Accounting Oversight Board reports on KPMG and its peer firms;
|
|
| •
| | the appropriateness of KPMG’s fees for audit and non-audit services, on both an absolute basis and as compared to its peer firms;
|
|
| •
| | KPMG’s independence; and
|
|
| •
| | KPMG’s tenure as our independent registered public accountants, including the benefits of having an independent registered public accountant that is familiar with us, and the controls and processes that help ensure KPMG’s independence.
|
In accordance with SEC rules and KPMG policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to us. For lead and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Audit Committee and with management.
The Audit Committee and the board of directors believe that the continued retention of KPMG LLP (“KPMG”) as our independent registered public accounting firm is in the best interest of our stockholders, and we are asking stockholders to ratify the selection of KPMG as our independent registered public accounting firm for 2016.2021. Although ratification is not required by our By-laws, applicable law or otherwise, the board of directors is submitting the selection of KPMG to stockholders for ratification because we value our stockholders’ views on our independent registered public accounting firm and as a matter of good corporate practice. In the event that our stockholders do not ratify the selection, it will be considered a recommendation to the board of directors and the Audit Committee to consider the selection of a different firm. Even if the selection is ratified, the Audit Committee
47
may in its discretion select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders. Representatives of KPMG are expected to be present at the annual meeting to answer questions. They also will have the opportunity to make a statement if they desire to do so.
The board of directors recommends a vote “FOR”“FOR” the ratification of
KPMG LLP as our independent registered public accountants for 2016.2021.
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| 64 | 2021 PROXY STATEMENT |
ITEM 2—RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTANTS
Principal Accountant Fees and Services
The following table sets forth the fees billed to us by KPMG as of and for the years ended December 31, 20152020 and 2014:2019:
| | | | |
| | For the Years Ended
December 31, |
| | 2015 | | 2014 |
Audit fees(1) | | | $ | | 1,972,700 | | | | $ | | 1,914,308 | |
Audit-related fees(2) | | | | 189,750 | | | | | 89,000 | |
Tax fees(3) | | | | — | | | | | 1,435 | |
All other fees(4) | | | | — | | | | | — | |
| | | | |
| | | $ | | 2,162,450 | | | | $ | | 2,004,743 | |
| | | | |
| | | For the Years Ended December 31, |
| | | 2020 | | | 2019 |
| Audit fees(1) | | $ | 4,032,614 | | | $ | 4,273,705 |
| Audit-related fees(2) | | | 296,525 | | | | 95,500 |
| Tax fees(3) | | | — | | | | 65,000 |
| All other fees(4) | | | — | | | | — |
| | | $ | 4,329,139 | | | $ | 4,434,205 |
|
| (1) | | Audit fees consistsconsist of fees for services related to the financial statement audit, quarterly reviews, audit of internal control over financial reporting, accounting consultations with KPMG’s National Office, comfort letters, SEC comment letters, audit services that are normally provided by independent auditors in connection with regulatory filings or engagements, and statutory audits. The amount also includes reimbursement for direct out-of-pocket travel and other sundry expenses. |
|
| (2) | | Audit-related fees related to audits of employee benefit plans, internal control compliance,financial due diligence services and other attestation services required by contract. |
|
| (3) | | Tax services consist of services relating to state and local tax compliance services. There were no tax fees billed to us in 2020. |
|
| (4) | | All other servicesfees are fees for any products or service not included in the first three categories. There were no other fees billed to us in 2020 or 2019. |
Pre-Approval Policy for Services of Independent Auditor
It is the Audit Committee’s responsibility to review and consider, and ultimately pre-approve, all audit and permitted non-audit services to be performed by our independent registered public accounting firm. In accordance with its charter, the Audit Committee’s pre-approval policies with respect to audit and permitted non-audit services to be provided by our independent registered public accounting firm are as follows:
|
| ● | •
| | The independent registered public accounting firm is not permitted to perform consulting, legal, book-keeping, valuation, internal audit, management functions, or other prohibited services, under any circumstances; |
|
| | •
|
| ● | | The engagement of our independent registered public accounting firm, including related fees, with respect to the annual audits and quarterly reviews of our consolidated financial statements is specifically approved by the Audit Committee on an annual basis; |
|
| | •
|
| ● | | The Audit Committee reviews and pre-approves a detailed list of other audit and audit-related services annually or more frequently, if required. Such services generally include services performed under the audit and attestation standards established by regulatory authorities or standard setting bodies and include services related to SEC filings, employee benefit plan audits and subsidiary audits; |
|
| | •
|
| ● | | The Audit Committee reviews and pre-approves a detailed list of permitted non-audit services annually or more frequently, if required; and |
48
|
| | •
|
| ● | | The Audit Committee pre-approves each proposed engagement to provide services not previously included in the approved list of audit and non-audit services and for fees in excess of amounts previously pre-approved. |
The Audit Committee has delegated to the chair of the Audit Committee the authority to approve permitted services by the independent registered public accounting firm so long as he or she reports decisions to the Audit Committee at its next meeting.
All of the services covered under the captions “Audit Fees”, and “Audit-Related Fees” and “Tax Fees” were pre-approved by the Audit Committee.
| |
| 2021 PROXY STATEMENT | 65 |
Who is the Audit Committee’s financial expert?
Our board of directors has determined that Joan L. Amble, the chairwomanReport of the Audit Committee
The Audit Committee is composed solely of independent directors meeting the requirements of applicable SEC and an independent director,NASDAQ rules. Each member is qualifiedfinancially literate for audit committee purposes under the NASDAQ rules, and each member of the Audit Committee also qualifies as an “audit committee financial expert” within the meaning of SEC regulations and that she is “financially sophisticated” within the meaning of the NASDAQ listing standards. The key responsibilities of the Audit Committee are set forth in its charter, which was adopted by us and approved by the board of directors and is posted under “Corporate Governance” in the Investor Relations section of our website at www.siriusxm.com.
REPORT OF THE AUDIT COMMITTEE
As described more fully in its charter, the purpose of the Audit Committee is to assist our board of directors in its general oversight of our financial reporting, internal control and audit functions. Management is responsible for the preparation, presentation and integrity of our consolidated financial statements; accounting and financial reporting principles; and internal controls and procedures designed to ensure compliance with accounting standards, applicable laws and regulations. KPMG, our independent registered public accounting firm, is responsible for performing an independent audit of our consolidated financial statements and the effectiveness of internal control over financial reporting in accordance with auditing standards of the Public Company Accounting Oversight Board (United States) (the “PCAOB”).
The Audit Committee has selected KPMG as our independent registered public accountants for 2021. KPMG has served as our independent registered public accountants since 2008. The Audit Committee is responsible for the appointment, compensation and oversight of our independent registered public accountants. The Audit Committee regularly reviews KPMG’s independence and performance in deciding whether to retain KPMG or engage another firm as our independent registered public accountants. In the course of these reviews, the Audit Committee considers, among other things:
| ● | KPMG’s historical and recent performance on our audit; |
| |
| ● | KPMG’s capability and expertise in handling the breadth and complexity of our operations; |
| |
| ● | the qualifications of the professionals assigned by KPMG to our audit, including their experience, area of expertise and other factors that could, in the Audit Committee’s opinion, affect the delivery by these professionals of services; |
| |
| ● | KPMG’s known legal risks and any significant legal or regulatory proceedings in which it is involved; |
| |
| ● | data on audit quality and performance, including recent PCAOB reports on KPMG and its peer firms; |
| |
| ● | the appropriateness of KPMG’s fees for audit and non-audit services, on both an absolute basis and as compared to its peer firms; |
| |
| ● | KPMG’s independence, including the possible effects of its provision of non-audit fees and services on its independence; and |
| |
| ● | KPMG’s tenure as our independent registered public accountants, including the benefits of having an independent registered public accountant that is familiar with us, and the controls and processes that help ensure KPMG’s independence. |
In accordance with SEC rules and KPMG policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide service to us. For lead and concurring audit partners, the maximum number of consecutive years of service in that capacity is five years. The process for selection of our lead audit partner pursuant to this context,rotation policy involves a meeting between the Chair of the Audit Committee and the candidate for the role, as well as discussion by the full Audit Committee and with management. The lead audit partner from KPMG assigned to us has served in that role since 2019.
| |
| 66 | 2021 PROXY STATEMENT |
REPORT OF THE AUDIT COMMITTEE
The Audit Committee engages in an annual evaluation of our independent registered public accounting firm’s qualifications, assessing the firm’s quality of service, the firm’s sufficiency of resources, the quality of the communication and interaction with the firm, and the firm’s independence, objectivity, and professional skepticism. The Audit Committee also considers the advisability and potential impact of selecting a different independent public accounting firm.
The Audit Committee and the board of directors believe that the continued retention of KPMG as our independent registered public accounting firm is in the best interest of our stockholders.
The Audit Committee has met and held discussions with management and the independent registered public accounting firm regarding the fair and complete presentation of our results and the assessment of our internal control over financial reporting. The Audit Committee has discussed significant accounting policies applied by us in our financial statements, as well as, when applicable, alternative accounting treatments. Management has represented to the Audit Committee that our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and KPMG.
The Audit Committee also reviewed and discussed our compliance with Section 404 of the Sarbanes-Oxley Act of 2002. In this regard, the Audit Committee reviewed and discussed, with management and our independent registered public accounting firm, management’s annual report on the effectiveness of internal control over financial reporting as of December 31, 20152020 and KPMG’s related attestation report.
The Audit Committee has discussed with KPMG the matters that are required to be discussed under PCAOB standards. The Audit Committee discussed with KPMG matters required to be discussed by Auditing Standard No. 16, 1301, Communications with Audit Committees, as adopted by the PCAOB, and Rule 2-07, Communication with Audit Committees, of Regulation S-X. The Audit Committee has concluded that KPMG’s provision of audit and non-audit services to us and our affiliates is compatible with KPMG’s independence.
At each regularly scheduled meeting, the Audit Committee met and held discussions with management, our internal auditors and KPMG. Prior to their issuance, the Audit Committee reviewed and discussed our quarterly and annual consolidated financial statements (including the presentation of non-GAAP financial information) and disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (including significant accounting policies and judgments) with management, our internal auditors and KPMG. TheDuring 2020, management, our internal auditors and KPMG also made presentations to the Audit Committee also reviewedon specific topics of interest, including: our policies and practices with respect to financial risk assessment, as well as
49
processes and practices with respect to enterprise risk assessment process; our information technology systems and controls; our federal and state income tax positions, including our tax strategy and risks; our critical accounting policies; new accounting guidance and the potential impact of new accounting pronouncements; financial controls associated with various acquisitions; our strategy and management including discussions of individual risk areas, as well as an annual summary of the overall process.implementation of new systems; and cyber security.
In 2017, the PCAOB adopted a requirement that audit reports for certain companies disclose “critical audit matters,” which are commonly referred to as “CAMs”. Under the new auditing standard for the auditor’s reports, CAMs are “matters communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involved especially challenging, subjective, or complex auditor judgment.” In connection with the audit of our consolidated financial statements for the fiscal year ended December 31, 2020, the Audit Committee and our management had discussions with KPMG regarding the CAMs applicable to our company. As part these discussions, the Audit Committee and management discussed with KPMG the manner in which KPMG identified the proposed critical audit matters, their consultation with their National Office regarding these critical audit matters and the description of the critical audit matters to be included in KPMG’s report.
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| 2021 PROXY STATEMENT | 67 |
REPORT OF THE AUDIT COMMITTEE
The Audit Committee discussed with KPMG the overall scope and plans for their audit and approved the terms of their engagement letter.letter, including the fees and non-audit fees payable to KPMG. The Audit Committee is ultimately responsible for the amounts we pay KPMG. After a review of the proposed fee arrangement, including the projected hours and other costs, the Audit Committee approved an engagement letter with KPMG. The Audit Committee has also discussed with our Senior Vice President, Internal Audit, the overall scope of and plans for our internal audits. The Audit Committee met with KPMG and with our internal auditors, in each case, with and without other members of management present, to discuss the results of their respective examinations, the evaluations of our internal controls and the overall quality and integrity of our financial reporting. Additionally, the Audit Committee reviewed the performance, responsibilities, budget and staffing of our internal audit department. The Audit Committee also has established, and overseen compliance with, procedures for our receipt, retention and treatment of complaints regarding accounting, internal accounting controls or auditing matters and our employees’ confidential and anonymous submissions of concerns regarding questionable accounting or auditing matters.
The Audit Committee discussed with KPMG their independence from the Company and our management, including the matters, if any, in the written disclosures delivered pursuant to the applicable requirements of the PCAOB. The Audit Committee also reviewed our hiring policies and practices with respect to current and former employees of the independent registered public accounting firm. The Audit Committee preapproved, in accordance with its preapproval policy described above, all services provided by the independent registered public accounting firm and considered whether the provision of such services to us is compatible with maintaining their independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the board of directors, and the board approved, that the audited consolidated financial statements be included in our Annual Report on Form 10-K for the fiscal year ended December 31, 20152020 filed with the SEC.
This report is provided by the following independent directors, who comprise the Audit Committee:
JOAN
JOAN L. AMBLE, AMBLE, Chairwoman
EDDYEDDY W. HARTENSTEINHARTENSTEIN
VANESSA A. WITTMAN
50
KRISTINA M. SALEN
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| 68 | 2021 PROXY STATEMENT |
OTHER MATTERSSpecial Note About
Forward-Looking Statements
The following cautionary statements identify important factors that could cause our actual results to differ materially from those projected in forward-looking statements made in this proxy statement and in reports and documents published by us from time to time. Any statements about our beliefs, plans, objectives, expectations, assumptions, future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intend,” “plan,” “projection” and “outlook.” Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this proxy statement and in reports and documents published by us from time to time, including the risk factors described under “Risk Factors” in Part I, Item 1A, of our Annual Report on Form 10-K for the year ended December 31, 2020.
Among the significant factors that could cause our actual results to differ materially from those expressed in the forward-looking statements are:
| ● | the COVID-19 pandemic is adversely impacting our business; |
| |
| ● | we face substantial competition and that competition is likely to increase over time; |
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| ● | our efforts to attract and retain subscribers and listeners, or convert listeners into subscribers, may not be successful, and may adversely affect our business; |
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| ● | we engage in extensive marketing efforts and the continued effectiveness of those efforts is an important part of our business; |
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| ● | we rely on third parties for the operation of our business, and the failure of third parties to perform could adversely affect our business; |
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| ● | we may not realize the benefits of acquisitions and other strategic investments and initiatives; |
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| ● | a substantial number of our Sirius XM subscribers periodically cancel their subscriptions and we cannot predict how successful we will be at retaining customers; |
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| ● | our ability to profitably attract and retain subscribers to our Sirius XM service as our marketing efforts reach more price-sensitive consumers is uncertain; |
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| ● | our business depends in large part on the auto industry; |
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| ● | failure of our satellite would significantly damage our business; |
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| ● | our Sirius XM service may experience harmful interference from wireless operations; |
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| ● | our Pandora ad-supported business has suffered a substantial and consistent loss of monthly active users, which may adversely affect our Pandora business; |
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| ● | our failure to convince advertisers of the benefits of our Pandora ad-supported service could harm our business; |
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| ● | if we are unable to maintain revenue growth from our advertising products, particularly in mobile advertising, our results of operations will be adversely affected; |
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| ● | changes in mobile operating systems and browsers may hinder our ability to sell advertising and market our services; |
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| ● | if we fail to accurately predict and play music, comedy or other content that our Pandora listeners enjoy, we may fail to retain existing and attract new listeners; |
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| ● | privacy and data security laws and regulations may hinder our ability to market our services, sell advertising and impose legal liabilities; |
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| 2021 PROXY STATEMENT | 69 |
SPECIAL NOTE ABOUT FORWARD-LOOKING STATEMENTS
| ● | consumer protection laws and our failure to comply with them could damage our business; |
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| ● | failure to comply with FCC requirements could damage our business; |
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| ● | if we fail to protect the security of personal information about our customers, we could be subject to costly government enforcement actions and private litigation and our reputation could suffer; |
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| ● | interruption or failure of our information technology and communications systems could impair the delivery of our service and harm our business; |
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| ● | the market for music rights is changing and is subject to significant uncertainties; |
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| ● | our Pandora services depend upon maintaining complex licenses with copyright owners, and these licenses contain onerous terms; |
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| ● | the rates we must pay for “mechanical rights” to use musical works on our Pandora service have increased substantially and these new rates may adversely affect our business; |
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| ● | our use of pre-1972 sound recordings on our Pandora service could result in additional costs; |
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| ● | failure to protect our intellectual property or actions by third parties to enforce their intellectual property rights could substantially harm our business and operating results; |
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| ● | some of our services and technologies may use “open source” software, which may restrict how we use or distribute our services or require that we release the source code subject to those licenses; |
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| ● | rapid technological and industry changes and new entrants could adversely impact our services; |
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| ● | we have a significant amount of indebtedness, and our debt contains certain covenants that restrict our operations; |
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| ● | we are a “controlled company” within the meaning of the NASDAQ listing rules and, as a result, qualify for, and rely on, exemptions from certain corporate governance requirements; |
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| ● | while we currently pay a quarterly cash dividend to holders of our common stock, we may change our dividend policy at any time; |
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| ● | our principal stockholder has significant influence, including over actions requiring stockholder approval, and its interests may differ from the interests of other holders of our common stock; |
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| ● | if we are unable to attract and retain qualified personnel, our business could be harmed; |
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| ● | our facilities could be damaged by natural catastrophes or terrorist activities; |
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| ● | the unfavorable outcome of pending or future litigation could have an adverse impact on our operations and financial condition; |
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| ● | we may be exposed to liabilities that other entertainment service providers would not customarily be subject to; and |
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| ● | our business and prospects depend on the strength of our brands. |
Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any of these forward-looking statements. In addition, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which the statement is made, to reflect the occurrence of unanticipated events or otherwise, except as required by law. New factors emerge from time to time, and it is not possible for us to predict which will arise or to assess with any precision the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
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| 70 | 2021 PROXY STATEMENT |
Other Matters
Our board of directors does not intend to present, or have any reason to believe others will present, any other items of business. If other matters are properly brought before the annual meeting, the persons named in the accompanying proxy will vote the shares represented by it in accordance with the recommendation of our board of directors.
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE STOCKHOLDER MEETING TO BE HELD ON MAY 24, 2016THURSDAY, JUNE 3, 2021
This proxy statement and our annual report for the fiscal year ended December 31, 20152020 are available for you to view online athttp://www.envisionreports.com/SIRIwww.proxyvote.com..
By Order of the Board of Directors,
Patrick L. Donnelly
Executive Vice President,
General Counsel and Secretary
New York, New York
April 8, 201620, 2021
We make available, free of charge on our website, all of our filings that are made electronically with the SEC, including Forms 10-K, 10-Q and 8-K. To access these filings, go to our website, www.siriusxm.com, and click on “Reports & Filings” and then on “SEC Filings” under the “Investor Relations” heading. Copies of our Annual Report on Form 10-K for the fiscal year ended December 31, 2015,2020, including financial statements and schedules thereto, are also available without charge to stockholders upon written request addressed to:
Investor Relations
Sirius XM Holdings Inc.
1221 Avenue of the Americas
36th35th Floor
New York, New York 10020
51
 | | Admission Ticket |
| IMPORTANT ANNUAL MEETING INFORMATION | | | |
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| 2021 PROXY STATEMENT | 71 |
1221 AVENUE OF THE AMERICAS, 35th Floor
NEW YORK, NY 10020
VOTE BY INTERNET - www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 P.M. ET on 06/02/2021 for shares held directly and by 11:59 P.M. ET on 06/02/2021 for shares held in a Plan. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form.
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS
If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.
VOTE BY PHONE - 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 P.M. ET on 06/02/2021 for shares held directly and by 11:59 P.M. ET on 06/02/2021 for shares held in a Plan. Have your proxy card in hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
| TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: | |
| | | Electronic Voting InstructionsKEEP THIS PORTION FOR YOUR RECORDS |
| | | Available 24 hours a day, 7 days a week! |
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| | Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. |
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| | VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
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| | Proxies submitted by the Internet or telephone must be received by 11:59 p.m., Eastern Time, on May 23, 2016. |
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| Vote by Internet |
| • | Go towww.envisionreports.com/SIRI |
| • | Or scan the QR code with your smartphone |
| • | Follow the steps outlined on the secure website |
| | |
| Vote by telephone |
| • | Call toll free 1-800-652-VOTE (8683) within the USA, US territories & Canada on a touch tone telephone |
| • | Follow the instructions provided by the recorded message |
Using ablack ink pen, mark your votes with anX as shown in this example. Please do not write outside the designated areas. | | X | |
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Annual Meeting Proxy Card | | |
| | DETACH AND RETURN THIS PORTION ONLY |
▼ IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACHTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼DATED.
A Proposals — Sirius XM’s Directors recommend a voteFOR each director nominee andFOR Proposal 2.
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| | For
All | Withhold
All | For All
Except | To withhold authority to vote for any individual nominee(s), mark “For All Except” and write the number(s) of the nominee(s) on the line below. | | | | |
| | The Board of Directors recommends you vote FOR the following: | | | | | | | | | | |
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| | 1. | Election of Directors | | | o | o | o | | | | | | | |
| | | Nominees: | | | | | | | | | | | |
| | 01 | David A. Blau | 02 | Eddy W. Hartenstein | | 03 Robin P. Hickenlooper | 04 | James P. Holden | 05 | Gregory B. Maffei | |
| | 06 | Evan D. Malone | 07 | James E. Meyer | | 08 Jonelle Procope | 09 | Michael Rapino | 10 | Kristina M. Salen | |
| | 11 | Carl E. Vogel | 12 | Jennifer C. Witz | | 13 David M. Zaslav | | | | | | |
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| | The Board of Directors recommends you vote FOR the following proposal: | For | Against | Abstain | |
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| | 2. | Ratification of the appointment of KPMG LLP as our independent registered public accountants for 2021. | | o | o | o | |
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| | NOTE: Such other business as may properly come before the meeting or any adjournment thereof. You may attend the meeting via the Internet and vote during the meeting. Have the information that is printed in the box marked with the arrow on your proxy card or Notice of Internet Availability of Proxy Materials available and follow the instructions. | | | | |
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| | Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name, by authorized officer. | | | | | | | |
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1. | Election of Directors: | | For | | Withhold | | | | For | | Withhold | | | | For | | Withhold |  |
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| 01 - Joan L. Amble | | o | | o | | 02 - George W. Bodenheimer | | o | | o | | 03 - Mark D. Carleton | | o | | o | |
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| 04 - Eddy W. Hartenstein | | o | | o | | 05 - James P. Holden | | o | | o | | 06 - Gregory B. Maffei | | o | | o | |
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| 07 - Evan D. Malone | | o | | o | | 08 - James E. Meyer | | o | | o | | 09 - James F. Mooney | | o | | o | |
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| 10 - Carl E. Vogel | | o | | o | | 11 - Vanessa A. Wittman | | o | | o | | 12 - David M. Zaslav | | o | | o | |
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| | | For | | Against | | Abstain | | | | | | | | | |
2. | Ratification of the appointment of KPMG LLP as our independent registered public accountants for 2016. | | o | | o | | o | | | | | | | | | |
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IF NO BOXES ARE MARKED AND THE PROXY IS SIGNED, THIS PROXY WILL BE VOTED IN THE MANNER DESCRIBED ON THE REVERSE SIDE.
Please indicate if you plan on attending this meeting. | | o | | o | | |
B Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
The signature should correspond exactly with stockholder’s name as printed to the left. In case of joint tenancies, co-executors, or co-trustees, both should sign. Persons signing as Attorney, Executor, Administrator, Trustee or Guardian should give their full title.
Date (mm/dd/yyyy) — Please print date below. | | Signature 1 — Please keep signature within the box. | | Signature 2 — Please keep signature within the box. |
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/ / | Signature [PLEASE SIGN WITHIN BOX] | Date | | | | | Signature (Joint Owners) | Date | | | |
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IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD.
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| | 029WUC | | | | | | |
To Attend the Annual Meeting please visit:
http://www.virtualshareholdermeeting.com/SIRI2021
Date and time: June 3, 2021 at 8:30 a.m., EDT
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice & Proxy Statement/Annual Report is/are available at www.proxyvote.com.
SIRIUS XM HOLDINGS INC.
ADMISSION TICKET
2016 ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, MAY 24, 2016
9:00 A.M. EASTERN TIME
TO BE HELD AT
THE AXA EQUITABLE CENTER
THE AUDITORIUM
787 SEVENTH AVENUE
NEW YORK, NEW YORK
THIS TICKET MUST BE PRESENTED TO ENTER THE MEETING
Important notice regarding the Internet availability of proxy materials for the
Annual Meeting of Stockholders. |
The Proxy Statement and 2015 Annual Report are available at:http://www.envisionreports.com/SIRI |
▼ IF YOU HAVE NOT VOTED VIA THE INTERNETOR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. ▼
Proxy — Sirius XM Holdings Inc.
Proxy Solicited on behalf of Stockholders
June 3, 2021 8:30 AM, EDT
This proxy is solicited by the Board of Directors of Sirius XM Holdings Inc.
The undersigned hereby appoints Patrick L. Donnelly and Ruth A. Ziegler, and each of them, proxies, with full power of substitution, for and on behalf of the undersigned to represent the undersigned and vote, as directed and permitted herein, the undersigned’s shares of Sirius XM Holdings Inc. common stock (including any shares of common stock which the undersigned has the right to direct the proxies to vote under the Sirius XM Radio Inc. 401(k) Savings Plan) at the Annual Meeting of Stockholders of SiriusSirus XM Holdings Inc. to be held at 08:30 AM, EDT, on Tuesday, May 24, 2016,Thursday, June 3, 2021, at 9:00 A.M., Eastern time, in the Auditorium at The AXA Equitable Center, 787 Seventh Avenue, New York, New York 10019Meeting live via the Internet (please visit www.virtualshareholdermeeting.com/SIRI2021), and at any adjournments or postponements thereof upon all matters set forth on the reverse side hereof and, in their judgment and discretion, upon such other business as may properly come before the meeting.
This proxy, when properly executed, will be voted in the manner directed on the reverse side hereof by the undersigned.herein. If this proxy is executed but no direction is given, this proxy will be voted FOR all nominees listed herein under Proposal 1 and FOR Proposal 2.
(
Continued and to be dated and signed on the reverse side)side
C Non-Voting Items
Change of Address — Please print new address below. | | Comments — Please print your comments below. |
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| IF VOTING BY MAIL, YOUMUST COMPLETE SECTIONS A - C ON BOTH SIDES OF THIS CARD. | |
