In the lawsuit, filed Tuesday in New York, Stern's attorneys say the company offered Stern a series of performance-based stock awards in 2004 that depended on it beating subscriber estimates by 2 million in any year of Stern's contract.
According to the complaint, Stern helped the company surpass these goals in 2006 and 2007. After Sirius merged with XM in 2008, the new company beat its targets in 2008, 2009 and 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," the complaint said, according to Reuters.
In response to the accusations, Sirius XM said it was "surprised and disappointed" by the filing. The company claimed to have "met all of our obligations under the terms of our 2004 agreement with Howard, his agent and production company."
Stern's production company, One Twelve, only received stock awards during the first year of his contract. Documents claimed that Sirius XM was also supposed to pay Stern's agent a consulting fee of 10 percent.
The 57-year-old shock jock first moved to satellite radio in 2004 and recently struck a new contract with Sirius XM that will keep Stern on the air through 2015. The new contract was undisclosed.
Sirius XM has an estimated 20.2 million subscribers.