Sirius XM Just Paid Its Lawyer $5 Million -- Should You Be Concerned?

Sirius XM (NASDAQ: SIRI  ) has just granted General Counsel Patrick Donnelly another $5 million worth in various stock awards. In the following video, Fool contributor Tim Beyers says that while it sounds rich, it's actually a pretty good arrangement for Sirius investors.

How can we be so sure about Donnelly's deal? Tim cites two SEC filings that describe the nature of the agreement: a Form 4 that describes the specifics of what the Sirius vet is getting, as well as an accompanying 8-K that includes Donnelly's employment agreement.

According to the Form 4, Donnelly acquired another 270,270 shares on Jan. 10. Trouble is, you need the 8-K to understand the whole story. It turns out the shares are connected to a $1 million restricted stock grant. No cash changed hands in the transaction.

Donnelly also received 3.67 million in options to purchase shares at $3.70 each, presuming he's still with the company when they vest in equal amounts over the next three years. Tim says the layers of detail help explain why it's so important for investors to get to know the SEC's EDGAR database and learn how to read insider transactions reports.

And what of Donnelly? Is he worth the price Sirius is paying? Tim answers that question in the video so please watch now, and then leave a comment to let us know whether you would buy, sell, or short Sirius XM stock at current prices.

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Read/Post Comments (4) | Recommend This Article (2)

Comments from our Foolish Readers

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  • Report this Comment On January 21, 2014, at 9:07 PM, werghk wrote:

    How long do you think it will be until we hear more on the offer price for SIRI? I would have thought by now we'd of heard a date for the next conference call.It seems to me that they don't want sirius to announce any good information that might hinder their low-balling bid. Somethings going on behind closed doors and I have a feeling it's not going to be good for us sirius shareholders.

  • Report this Comment On January 21, 2014, at 11:27 PM, ara1029 wrote:

    werghk: Absolutely. Also, they are stalling in an attempt to make us minority shareholders impatient and more worried, and proceed to run away in order to maintain the lowball price (also keeping away new investors with the uncertainty). It's rarely a good thing to be emotionally invovled/sentimental regarding stocks, but in this case I feel I must stand my ground and hold tight. It's all about knowing and believing in what you own. All I can do right now is hope for the best.

  • Report this Comment On January 22, 2014, at 3:50 PM, gvInvestments wrote:

    We need to all stand together and Fight maloney. dont let him and the richest people in this country push you around. Be a freeking man stand your ground and Fight back! i will not sell my shares i will fight and get my $5.00 Dollars!

  • Report this Comment On January 27, 2014, at 3:22 PM, sirguyon wrote:

    In your video, you support Donnelly's deal because you say since he came on board in 2010, the Company has done well. But Sirius's own website says he was hired as general legal counsel in 1998, so under his legal management the stock price has gown done 90%. So how again is his $5 million deal good for us shareholders?

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