Sirius XM announced Wednesday that the contract of CEO Mel Karmazin’s employment has been extended through the end of 2012. Under the new deal, Sirius XM has escalated Karmazin's base salary to $1.5 million a year, from $1.2 million.

The new agreement also provided Mel Karmazin with options exercisable at 43 cents per share.

Last year, Karmazin secured a loan worth $530 million from Liberty Media, which helped the company to get out of bankruptcy.

It is worth mentioning here that for the quarter ended March 31, the company posted it’s first-ever loss of subscribers. That is why many shareholders are taking company’s current move as right decision at wrong time. 

Although, at present Sirius XM is losing, yet it is increasing its cash flow.

In the recent trading, company’s shares closed at 46 cents, up 3 cents.