Waste Management 2011 Annual Report Download - page 39

Company. During 2011, the MD&C Committee reviewed the Company’s assessment of risk created by the
Company’s compensation policies and practices, which was conducted with guidance from the independent
compensation consultant. The MD&C Committee concluded that our compensation policies and practices do not
create risks that are reasonably likely to have a material adverse effect on the Company.
Consideration of Stockholder Advisory Vote on Executive Compensation. The MD&C Committee reviews
the results of the stockholder advisory vote on executive compensation and considers any implications of such
voting results on the Company’s compensation programs.
Recruitment of Mr. Preston and Promotion of Mr. Trevathan. In light of Mr. Simpson’s desire to retire,
the Company conducted a search for a new principal financial officer. Mr. Preston, previously President and
Chief Executive Officer of Oakleaf Global Holdings, was identified as the desired successor following Waste
Management’s acquisition of Oakleaf in July 2011. Mr. Preston is our only named executive recruited to his
position from outside the Company. When establishing compensation for Mr. Preston, the MD&C Committee
considered the compensation level of his predecessor and the competitive analysis prepared when 2011 executive
compensation was established. The MD&C Committee determined that an increased base salary was justified on
the basis of the competitive analysis, as well as the fact that Mr. Preston assumed oversight responsibilities for
recycling, waste-to-energy and organic growth operations in addition to responsibilities of the principal financial
officer. Additionally, the MD&C Committee concluded that it was appropriate to guarantee Mr. Preston an
annual cash bonus for 2011 to entice him to take on a new employment opportunity. The MD&C Committee also
approved an award to Mr. Preston of 184,584 stock options under the Company’s 2009 Stock Incentive Plan with
the same term and vesting provisions as stock options awarded to other named executives in 2011. This equity
award was granted as a component of Mr. Preston’s overall competitive compensation package, as well as to
encourage and reward long-term performance, promote retention and increase Mr. Preston’s alignment with
stockholders.
Additionally, in June 2011, Mr. Trevathan was promoted to the new position of Executive Vice President —
Growth, Innovation and Field Support. In this new role, Mr. Trevathan is responsible for integrating the
Company’s operations, sales and people functions to support the field’s achievement of the Company’s
transformational growth goals. He is working in close coordination with the Company’s Group Senior Vice
Presidents. Company functions reporting into Mr. Trevathan include the corporate staff in Collection and
Post-Collection Operations, Safety, Procurement, Innovation & Optimization, Business Solutions, Enterprise
Program Integration, Sales & Marketing, and Human Resources. In recognition of this promotion and the
strategic importance of the additional responsibilities that Mr. Trevathan assumed, Mr. Trevathan received an
award of 150,000 stock options under the Company’s 2009 Stock Incentive Plan with the same term and vesting
provisions as stock options awarded to other named executives in 2011.
Named Executives’ 2011 Compensation Program and Results
Base Salary
Each of Mr. Steiner and Mr. Simpson received a 2.5% increase in base salary, in line with the corporate-
level budget. In early 2011, the base salaries of the Group Senior Vice Presidents were determined to be on the
high side of our target range around the competitive median, and as a result, none of the Group Senior Vice
Presidents that are named executives received an increase in base salary for the second year in a row.
Mr. Preston’s base salary was established in connection with his recruitment to the Company, as discussed above.
The table below shows the 2010 base salary, percent increase in base salary and 2011 base salary for each of our
named executive officers:
Named Executive Officer 2010 Base Salary Percent Increase 2011 Base Salary
Mr. Steiner .............................. $1,100,000 2.5 $1,127,500
Mr. Preston .............................. N/A N/A $ 580,000
Mr. Simpson ............................. $ 531,405 2.5 $ 544,690
Mr. Trevathan ........................... $ 566,298 0 $ 566,298
Mr. Harris ............................... $ 536,278 0 $ 536,278
Mr. Woods .............................. $ 565,710 0 $ 565,710
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