There is a popular saying that goes, “Don’t bite the hand that feeds you.” Well it seems that satellite radio provider Sirius XM Radio Inc. is doing just that to loyal employee shock jock Howard Stern.
According to Stern and his agent Don Buchwald, Sirius XM Inc. offered Stern different levels of stock awards in 2004 that were based on surpassing the satellite radio’s estimates by 2 million or more subscribers in any year of his contract.
The complaint states that under Stern’s help the company beat its goals by more than 2 million subscribers in both 2006 and 2007. Goals were surpassed once again after Sirius merged with XM Radio in 2008 as well as in 2009 and 2010 according to the filing. “Sirius has now acquired their chief competitor and has signed over 20 million subscribers. Sirius XM has reneged on their commitment to Stern, coming to a decision that they have paid him enough.” Furthermore, Sirius XM told Stern that the subscriber goal was not met because he and Buchwald were counting XM listeners in their total instead of just Sirius listeners. The suit states that under the terms of the contract, XM listeners count, and Sirius has to abide by their agreement.
In a response from Sirius XM, they feel they have met all of their obligations under the terms of their 2004 agreement with Stern, Howard’s production company “One Twelve” and his agent who was under agreement to get paid a ten percent consulting fee. They added they were "surprised and disappointed" by the legal action.
Stern signed a new 5 year contract with Sirius XM in December that will keep him on the air through 2015. The terms of the contract were undisclosed. His previous contract was a 5 year $500 million deal.
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