XM Satellite Execs Cash In

In its report in the proxy statement, XM's compensation committee says executive bonuses were based on attainment of operating targets in certain categories, including subscriber growth, revenue and expense control. Stock option grants, says the committee, reflect "significant individual contributions" to the company's operations and implementation of the company's "development and growth programs."

XMSR, which is slated to report first-quarter financials on May 6, added more than a million subscribers to its satellite radio service in 2003, ending the year with 1.4 million subscribers. The company reported revenue of $91.8 million in 2003, up from $21.2 million in the prior year. The net loss for common shareholders last year was $604.9 million, or $4.83 per share, compared to a year-earlier loss of $515.9 million, or $5.95 per share.

Shares in XM and rival Sirius (SIRI Quote) surged last year as investors leaped aboard the satellite radio bandwagon. The companies charge $10 and up for monthly subscriptions to their mostly commercial-free radio broadcasts. The programming is broadcast from satellites to special receivers mounted in vehicles or homes.

Bulls believe the medium has nearly unlimited growth potential, and seize on the companies' fast-expanding subscriber rolls as evidence. But bears note these outfits' cash-consuming ways and wonder if the business can ever expand to the point where either company -- let alone both -- is consistently profitable.

Earlier Wednesday, Sirius reported disappointing first-quarter subscriber additions, sending its shares 8% lower. In midday action, it was off 30 cents at $3.50.