Comments on: The radio executive and the Rabbi… http://www.footnoted.com/urge-to-merge/the-radio-executive-and-the-rabbi/ Morningstar's guide to what's hiding in SEC filings Fri, 10 Feb 2012 20:24:57 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: ExecCompPro http://www.footnoted.com/urge-to-merge/the-radio-executive-and-the-rabbi/comment-page-1/#comment-10148 ExecCompPro Fri, 13 Nov 2009 19:54:13 +0000 http://www.footnoted.com/?p=4383#comment-10148 This looks benign. Probably, his severance cannot be paid for 6 months under 409A because he's a specified employee. Most companies would not fund a rabbi trust for only a brief 6 month delay, but Sirius/XM isn't exactly investment-grade, and I'm sure the ex-CEO wants as much security as he can get without violating 409A. A rabbi trust, in and of itself, is not meaningful -- it's just a funding mechanism. This looks benign. Probably, his severance cannot be paid for 6 months under 409A because he’s a specified employee. Most companies would not fund a rabbi trust for only a brief 6 month delay, but Sirius/XM isn’t exactly investment-grade, and I’m sure the ex-CEO wants as much security as he can get without violating 409A. A rabbi trust, in and of itself, is not meaningful — it’s just a funding mechanism.

]]> By: Frank Graham http://www.footnoted.com/urge-to-merge/the-radio-executive-and-the-rabbi/comment-page-1/#comment-10145 Frank Graham Fri, 13 Nov 2009 17:12:46 +0000 http://www.footnoted.com/?p=4383#comment-10145 Interesting. There's a bunch today about replacement of CEOs for these guys too. S&P upgraded SIRI other day. And this bit about Liberty Media's stake. fwiw I hate 'tracking stocks' -- see Barnes & Noble busted one, gone BNBN. UPDATE 1-Liberty Media sees Sirius stake spin in future Thu Nov 12, 2009 4:22pm EST NEW YORK, Nov 12 (Reuters) - Liberty Media Corp (LINTA.O: Quote, Profile, Research, Stock Buzz) expects that it will spin out its 40 percent stake in satellite radio operator Sirius XM "at some stage", Liberty CEO Greg Maffei said on Thursday. Liberty, the media conglomerate owned by media mogul John Malone, made an opportunistic acquisition of the stake in Sirius in February when the satellite company was on the verge of bankruptcy. Maffei, who was speaking at the Media & Money conference in New York, said the Sirius investment had been one of the best bets the company had ever made. Liberty Media paid $530 million in loans with a high 15 percent interest rate in exchange for preferred stock convertible into a 40 percent stake in the company. Today the stake is now worth more than $1 billion. "It will be logical to spin out the stake at some stage," Maffei said. Liberty Media has traditionally avoided transactions that could lead to it incurring taxes on top of a deal price. One option would be to spin-out the stake directly to shareholders of its Liberty Capital tracking stock through which it made the Sirius investment. (Reporting by Yinka Adegoke; Editing Bernard Orr) © Thomson Reuters 2009. All rights reserved. Interesting. There’s a bunch today about replacement of CEOs for these guys too.
S&P upgraded SIRI other day. And this bit about Liberty Media’s stake.
fwiw I hate ‘tracking stocks’ — see Barnes & Noble busted one, gone BNBN.

UPDATE 1-Liberty Media sees Sirius stake spin in future
Thu Nov 12, 2009 4:22pm EST
NEW YORK, Nov 12 (Reuters) – Liberty Media Corp (LINTA.O: Quote, Profile, Research, Stock Buzz) expects that it will spin out its 40 percent stake in satellite radio operator Sirius XM “at some stage”, Liberty CEO Greg Maffei said on Thursday.

Liberty, the media conglomerate owned by media mogul John Malone, made an opportunistic acquisition of the stake in Sirius in February when the satellite company was on the verge of bankruptcy.

Maffei, who was speaking at the Media & Money conference in New York, said the Sirius investment had been one of the best bets the company had ever made.

Liberty Media paid $530 million in loans with a high 15 percent interest rate in exchange for preferred stock convertible into a 40 percent stake in the company. Today the stake is now worth more than $1 billion.

“It will be logical to spin out the stake at some stage,” Maffei said.

Liberty Media has traditionally avoided transactions that could lead to it incurring taxes on top of a deal price. One option would be to spin-out the stake directly to shareholders of its Liberty Capital tracking stock through which it made the Sirius investment.

(Reporting by Yinka Adegoke; Editing Bernard Orr)

© Thomson Reuters 2009. All rights reserved.

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