Waste Management 2011 Annual Report Download - page 197

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company grants equity awards to certain key employees as part of its long-term incentive plan, or
LTIP. The annual LTIP awards granted in 2009 included a combination of RSUs and PSUs. In 2010, we
re-introduced stock options as a component of equity compensation, and in 2010 and 2011, key employees were
granted a combination of PSUs and stock options. In 2009, the annual LTIP award made to the Company’s senior
leadership team, which generally includes the Company’s executive officers, was comprised solely of PSUs. In
2010 and 2011, the annual LTIP award to the Company’s senior leadership team included a combination of PSUs
and stock options. During the reported periods, the Company has also granted restricted stock units and stock
options to employees working on key initiatives; in connection with new hires and promotions; and to field-based
managers.
Restricted Stock Units — A summary of our RSUs is presented in the table below (units in thousands):
Years Ended December 31,
2011 2010 2009
Units
Weighted
Average
Fair
Value Units
Weighted
Average
Fair
Value Units
Weighted
Average
Fair
Value
Unvested, beginning of year ........................ 586 $27.61 1,030 $30.76 1,121 $33.46
Granted ........................................ 6 $31.65 8 $34.25 369 $23.66
Vested(a) ....................................... (253) $32.62 (428) $35.37 (412) $31.49
Forfeited ....................................... (22) $26.12 (24) $26.54 (48) $32.81
Unvested, end of year ............................. 317 $23.60 586 $27.61 1,030 $30.76
(a) The total fair market value of RSUs that vested during the years ended December 31, 2011, 2010 and 2009
was $9 million, $14 million and $13 million, respectively. Net of units deferred and units used for payment
of associated taxes, we issued approximately 162,000, 264,000 and 260,000 shares of common stock for
RSUs that vested during the years ended December 31, 2011, 2010 and 2009, respectively.
RSUs provide award recipients with dividend equivalents during the vesting period, but the units may not be
voted or sold until time-based vesting restrictions have lapsed. RSUs primarily provide for three-year cliff
vesting. Unvested units are subject to forfeiture in the event of voluntary or for-cause termination. RSUs are
subject to pro-rata vesting upon an employee’s retirement or involuntary termination other than for cause and
become immediately vested in the event of an employee’s death or disability.
Compensation expense associated with RSUs is measured based on the grant-date fair value of our common
stock and is recognized on a straight-line basis over the required employment period, which is generally the
vesting period. Compensation expense is only recognized for those awards that we expect to vest, which we
estimate based upon an assessment of current period and historical forfeitures.
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