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A 20% Raise for Mel

Base salary will be $1.5 million; he also gets stock options

Subscriptions may have softened and the company may have lost a key programming exec recently, but Mel Karmazin just got a raise and a contract extension, suggesting broader satisfaction on its board with the job he’s doing.

According to an SEC filing, Sirius XM extended the term of his deal through the end of 2012 and gave him a hike in his base salary of 20%, from $1.25 million to $1.5 million starting next January.

The agreement also provides for the grant of an option to purchase 120 million shares of the company’s common stock at 43 cents per share, its closing price Tuesday, in installments over the contract period.

Jon Zellner, senior vice president of music programming, recently jumped to Clear Channel, as RW has reported.

Karmazin and Sirius XM were able to fend off possible bankruptcy earlier this year thanks to new capital from Liberty Media.

The Wall Street Journal notes today that though the company remains unprofitable, it is increasing cash flow and profitability on an operations basis.