Sirius Satellite Radio Inc. paid Howard Stern an $83 million stock bonus Tuesday after the company beat a subscriber target set two years ago when it lured the star shock jock away from terrestrial radio.
The bonus came one year after Stern started broadcasting his hugely popular and racy programming on satellite radio. The stock bonus is on top of Stern’s five-year, $500 million pay package that he signed in October 2004.
Sirius said in a statement that it paid Stern slightly more than 22 million shares of stock after exceeding a year-end subscriber goal for 2006 by more than two million.
Sirius ended last year with just over 6 million subscribers, compared with projections of about 3.5 million from Wall Street analysts when the company signed Stern’s employment agreement.
Stern could stand to gain other stock bonuses in the future if the company meets annual subscriber targets, but these would have to be beat by a far greater amount, Sirius said in a statement.
Sirius said the shares issued in Stern’s bonus as well as any others likely to be issued to him would not increase its share count since other share warrants are likely to expire in the meantime.
Sirius and its main competitor, XM Satellite Radio Holdings Inc., have posted significant financial losses as they spend heavily on talent like Stern, sports programming and other stars and on acquiring subscribers. Both said they turned profitable on an operating basis in the fourth quarter.
The shares of both companies, once favorites among investors, fell more than 45 percent last year on various concerns, including softer retail sales of the radio units.
Investors have recently focused on the possibility that the two companies could attempt to merge, although analysts caution that such a combination would face serious regulatory hurdles.