Sirius XM Radio's (Nasdaq: SIRI) Mel Karmazin isn't a name you see pop up in too many "Worst CEO" lists, but that's exactly what happened last week.

Forbes' Scott DeCarlo singled out the satellite radio helmsman as one of the country's worst CEOs on a "bang for buck" basis.

The process was surprisingly objective. The country's 500 largest companies were screened to find CEOs of publicly traded companies that have been at the job for at least six years. The remaining 206 executives were then ranked based on stock performance relative to compensation.

The good, the bad, and the ugly
Amazon.com's (Nasdaq: AMZN) Jeff Bezos topped the list of best value among CEOs of the 206 qualifying companies. He has delivered a 30% annual return to investors over the past six years, earning an average of $1.4 million a year along the way.

 Genworth Financial's (NYSE: GNW) Michael Fraizer clocked in dead last. He has received an annual average of $10.5 million in compensation, even though Genworth's stock has fallen at an annualized clip of 19% over the six-year run.

Karmazin, however, is singled out along with Fraizer at the bottom of the list after taking in more than $37 million in compensation since he left terrestrial radio to join Sirius in 2004.

 "Meanwhile, the stock has gone from about $9 shortly after he took over, before its merger with XM, to its recent hovering in the low $2 range," Forbes argues. "Additionally, he also stands to clear another $125 million or so next month with a planned exercise of stock options."

It certainly doesn't look good for Karmazin, but this is really just part of the story.

The starting line is the firing line
Why six years?

If this contest was only looking back at half that time -- around when Sirius XM seemed destined for bankruptcy and its stock bottomed out at $0.05 a share in early 2009 -- Karmazin would be near the top of the list.

I once warned CEOs to be wary of accepting new gigs at overvalued companies. Karmazin joining Sirius in 2004 would certainly qualify. The stock was richly valued, and the balance sheet was such a mess that a highly dilutive recapitalization seemed inevitable.

Taking over Sirius XM meant bringing a defibrillator along, because it would take various charges to bring it back to life.

Instead of measuring Karmazin's success from $9 to last week's close of $2.35 -- or from the all-time bottom of $0.05 to $2.35, for that matter -- let's tally up Karmazin's achievements.

  • He not only got the larger XM to agree to a merger of equals, but pushed it through with the Sirius side outmuscling the XM side for executive power.
  • Sirius XM has been consistently profitable over the past two years, generating gobs of free cash flow along the way.
  • With 21.9 million subscribers -- and counting -- satellite radio is as popular now as it has ever been. Cynics arguing that Sirius XM would be a transitory technology have been proven wrong.

Lead the way
In retrospect, Karmazin has earned every penny.

Sure, his confidence -- often mistaken for arrogance -- makes it hard to accept that.

"I think I'm one of the most underpaid executives in the history of executive payment," he told a different Forbes reporter recently.

Modesty has never been Karmazin's strong suit, and you probably don't want that in someone trying to juggle on-air talent at the satellite radio giant.

He's certainly not the most underpaid executive out there. However, if Forbes backs away from its rigid six-year time frame, it will realize that Karmazin isn't a bad value. If it wasn't for Karmazin, XM would've taken over a bankrupt Sirius a couple of years ago -- and who knows how ugly things would have gone for XM itself after that.

Running of the bulls
I remain bullish on Sirius XM's future. It should come as no surprise that I'm promoting the CAPScall initiative for accountability by reiterating my bullish call on Sirius XM for Motley Fool CAPS.

XM Satellite Radio was a Rule Breakers recommendation before the Sirius XM merger. It's now gone from the scorecard, but if you want to discover the newsletter service's next rule-breaking multibagger, a free report reveals all.

The Motley Fool owns shares of Amazon.com. Motley Fool newsletter services have recommended buying shares of Amazon.com. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Longtime Fool contributor Rick Munarriz calls them as he sees them. He does not own shares in any of the stocks in this story. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.