[Satellite TODAY Insider 03-24-11] Radio DJ Howard Stern is suing his employer, Sirius XM Radio for allegedly refusing to give him performance-based stock options that were promised in the $500 million contract he signed with the satellite radio broadcaster in 2004, Sirius XM announced.
    In a statement, Stern’s representatives claimed that Sirius XM offered him a series of stock awards in 2004 if the company beat its subscriber estimates by 2 million or more. The suit alleges that Sirius XM beat its targets every year from 2006 to 2010. "Now that Sirius has conquered its chief competitor and acquired more than 20 million subscribers, it has reneged on its commitment to Stern, unilaterally deciding that it has paid him enough," Stern’s lawyers said in the complaint, filed March 22.
    Sirius XM had about 600,000 subscribers when Stern launched his satellite radio show on its platform in 2005. The company ended 2010 with 20 million subscribers and projects to add another 1.4 million next year. The lawsuit follows a five-year contract renewal Stern signed with Sirius in December. The terms of the new deal were not disclosed.
    Seeking Alpha Analyst Rocco Pendola said that the lawsuit, combined with Stern’s recent claims that he would start doing just three shows a week in the future, would only affect Sirius XM stockholders in the short-term.
    "It might make sense to buy Sirius XM stock on the almost certain pullback it will experience from this news. I view it as similar to when Stern chided Sirius XM CFO David Frear, noting that he was not going to take a ‘gosh darn paycut.’ The stock fell only to bounce on the news of a new contract. Stern, always the showman, could come to an agreement with Sirius within days, as I see it, prompting a similar reaction in Sirius shares. Karmazin, a sharp radio guy himself, might actually be quite happy to see the lawsuit hit the wires this afternoon," Pendola wrote in a March 23 report.

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