Siruis: Mel Karmazin’s $31 Million Pay Day

Wall St. can whine about something else going on at Sirius (SIRI). The stock is down. The merger with XM (XMSR) is not progressing smoothly. Howard Stern makes too much money.

Mel Karmazin, the Sirius CEO, made $31 million last year. Most of that was restricted stock and options. The cash portion was $4.25 million.The National Association of Broadcasters, which are trying to block the merger, called the pay "outlandish", according to The New York Post. A Sanford Berstein analyst commented that the disclosure of Karmazin’s package could not have come at a worse time. His concern is that opponents of the merger will use the pay day to make management look greedy.

The moaning and groaning is understandable. The Sirius stock price is down almost 40% over the last two year. But, how much of this can be laid at Karmazin’s feet?

The broad problems that face satellite radio can not be solved by any executive. Programming is expensive. The two satellite radio firms each has over $1 billion in debt. And, competition from products like the Apple (AAPL) iPod did not exist when satellite radio was developed.

Karmazin was never going to come cheap. He is arguably the best radio executive of the last two decades. He was the head of CBS (CBS). He did not need the Sirius job. And, he is probably the best salesman in the media business, a good choice for trying to make the case to Washington that the merger is essential to the survival of the two companies and will not create a monopoly.

But, Washington is Washington. Executives who make a lot of money are easy targets. It is unlikely Sirius was ever going to get someone for less money. And, it would be hard to argue that anyone else was a better candidate.

In the calculus of the merger, Karmazin’s pay is a red herring.

Douglas A. Mcintyre can be reached at [email protected] He does not own securities in companies that he writes about.