Howard's End?

Tom Taylor Radio Info: Yes, Mel gets a raise and a new contract from Sirius – but what about Howard Stern?

Yesterday's headline was that Mel Karmazin extends his contract through the end of 2012 and gets a raise in base salary from $1.25 million to $1.5 million plus a bunch of stock options. If you’re counting birthday candles, Mel will be 69 years old in December 2012. Judged by recent CEO compensation packages, the $1.5 mil and the stock options really aren’t a mega-deal. But there’s another contract that Sirius-watchers should care about, and that’s the Howard Stern deal that expires in December 2010. We’ve got another 18 months to speculate about it, but I still think there’s a shot that Stern, the company’s biggest mealticket, might decide to pack it in rather than accept a drastically lower offer. Or – maybe he’s just tired, period. On the other side of that – Mel Karmazin and Howard Stern have made each other very rich. If Mel’s sticking around through 2012, that may influence Stern’s thought process. Here’s the deal on Mel – his new employment agreement entitles him to buy 120 million shares of “SIRI” at 43 cents per share. (43 cents is where Sirius XM had closed at, the previous day.) The option to exercise them will expire in December 2014. Unless, that is, Mel stays on another year. Sirius XM also adopted a new long-term stock incentive plan for some other employees.