5.5M Incentives for Liberty’s Maffei

Liberty Media Corp.’s new CEO-elect -- former Oracle Corp. and Microsoft Corp. chief financial officer Greg Maffei -- has 5.5 million reasons to increase the media giant’s stock price, according to documents filed with the Securities and Exchange Commission Tuesday.

According to the filing, Maffei -- who is expected to start his new job in the second quarter of next year -- will receive options to purchase 5.5 million shares of Liberty stock priced at $7.95 per share, which was Liberty’s closing price Nov. 8, the day the employment agreement was signed.

In addition, Maffei will receive an annual salary of $1 million, plus an annual bonus not to exceed $1 million. Liberty will also reimburse Maffei for relocation expenses to the Denver area, Liberty’s headquarters.

Maffei’s stock options would currently be underwater today -- Liberty stock closed at $7.88 each Nov. 15, below the $7.95 strike price. But if Maffei can help to boost Liberty shares by as little as $2 each, it could mean an $11 million windfall for the new CEO.

Liberty also revealed the exit package for outgoing CEO Robert Bennett. Bennett -- who will remain a director of Liberty at least until its next annual shareholders’ meeting April 1 -- announced his retirement in August.

According to the document, Bennett will continue to receive his annual base salary of $1 million through March 31, and his annual bonus, which is not to exceed $750,000. From April 1-March 31, 2008, Bennett will receive an annual salary of $500,000. During that two-year period, Bennett is also entitled to office services and the use of Liberty’s New York apartment.