Waste Management 2011 Annual Report Download - page 42

Calculation of Annual Cash Bonus Payout for Mr. Harris:
Income from Operations
excluding Depreciation and
Amortization:
(weighted 40%)
Income from Operations
Margin:
(weighted 30%)
Pricing Improvement:
(weighted 30%)
Total
Payout
Earned
(as a
percentage
of Target)Actual
Payout
Earned Actual
Payout
Earned Actual
Payout
Earned
Company Consolidated ..... 15.77% 0% 3.2% 200%
Midwest Group ............ $956 million 123.10%
Payout Based on Performance
Measures ..................... 109.24%
Individual Performance Modifier . . . 100%
Modified Payout ... 109.24%
Calculation of Annual Cash Bonus Payout for Mr. Woods:
Income from Operations
excluding Depreciation and
Amortization:
(weighted 40%)
Income from Operations
Margin:
(weighted 30%)
Pricing Improvement:
(weighted 30%)
Total
Payout
Earned
(as a
percentage
of Target)Actual
Payout
Earned Actual
Payout
Earned Actual
Payout
Earned
Company Consolidated ..... 15.77% 0% 3.2% 200%
Western Group (weighted
70%) .................. $820 million 76.84%
Western Integrated (weighted
30%) .................. $829 million 76.04%
Payout Based on Performance
Measures ..................... 90.64%
Individual Performance Modifier . . . 93.7%
Modified Payout ... 84.96%
In determining actual performance achieved on financial performance goals, the MD&C Committee has
discretion to make adjustments to the calculations for unusual or otherwise non-operational matters that it
believes do not accurately reflect results of operations expected from management for bonus purposes. In 2011,
the calculation of income from operations excluding depreciation and amortization and income from operations
margin were adjusted to exclude the effects of: (i) revisions of estimates associated principally with remedial
liabilities at a closed site; (ii) the accounting effect of changes in ten-year Treasury rates, which are used to
discount remediation reserves; (iii) restructuring undertaken as part of our cost savings programs;
(iv) impairments at two closed Healthcare Solutions facilities; and (v) charges related to integration of the
acquired Oakleaf business and Oakleaf operating losses. Adjustments are not made to forgive poor performance,
and the MD&C Committee considers both positive and negative adjustments to results. Adjustments are made to
ensure that rewards are aligned with the right business decisions and are not influenced by potential short-term
gain or impact on bonuses. Adjusting for certain items, like those discussed herein, avoids creating incentives for
individuals to fail to take actions for the longer-term good of the Company in order to meet short-term goals. The
aggregate net impact of the adjustments mentioned above resulted in a $43.12 million increase in income from
operations excluding depreciation and amortization on a Company-wide consolidated basis. These adjustments
also increased field-level and integrated income from operations excluding depreciation and amortization to the
extent applicable to the respective geographic Groups.
33