Use sips to pad just the top of an image
I do not believe you can do that with sips. I would recommend ImageMagick which you can easily install using Homebrew. Then the command is:

convert  InputImage.jpg -background blue -splice 0x100 PaddedResult.jpg





If you want to add transparent padding, use:

convert  InputImage.jpg -background transparent -splice 0x100 out.png


If you want to composite two images together, you can do this:

convert -size 1024x768 xc:blue 1024x768.jpg                    # create big blue image
convert -size 100x100 xc:red 100x100.jpg                       # create little red image
composite -gravity northeast 100x100.jpg 1024x768.jpg out.jpg  # superimpose top right


Note that I am creating my images first, you can obviously just use your own.