Waste Management 2011 Annual Report Download - page 47

Other Compensation Policies and Practices
Stock Ownership Requirements — All of our named executive officers are subject to stock ownership
guidelines. We instituted stock ownership guidelines because we believe that ownership of Company stock
demonstrates a commitment to, and confidence in, the Company’s long-term prospects and further aligns
employees’ interests with those of our stockholders. We believe that the requirement that these individuals
maintain a portion of their individual wealth in the form of Company stock deters actions that would not benefit
stockholders generally. Although there is no deadline set for executives to reach their ownership requirements,
the guidelines contain a holding requirement. Until the individual’s ownership requirement is achieved, Senior
Vice Presidents and above are required to retain 100% of all net shares acquired through the Company’s long-
term incentive plans and Vice Presidents are required to retain at least 50% of such net shares. The requisite
stock ownership level must thereafter be retained throughout the officer’s employment with the Company.
Additionally, the stock ownership guidelines generally require Senior Vice Presidents and above to hold all of
their net shares and Vice Presidents to hold 50% of their net shares for at least one year after such shares are
acquired, even if required ownership levels have already been achieved. Our MD&C Committee believes these
holding periods discourage these individuals from taking actions in an effort to gain from short-term or otherwise
fleeting increases in the market value of our stock.
The MD&C Committee regularly reviews its ownership guidelines to ensure that the appropriate share
ownership requirements are in place, and the guidelines were last increased in late 2010. The stock ownership
guidelines vary dependent on the individual’s title and are expressed as a fixed number of shares. Ownership
requirements range from approximately three to five times the named executive’s 2011 base salary. Shares
owned outright, deferred stock units, and phantom stock held in the 401(k) plan and in the Deferral Plan count
toward meeting the targeted ownership requirements. Restricted stock shares, restricted stock units and
performance share units, if any, do not count toward meeting the requirement until they are vested or earned. The
following table outlines the ownership requirements for the named executive officers currently serving:
Named Executive Officer
Ownership Requirement
(number of shares)
Attainment as of
12/31/2011
Mr. Steiner ....................................... 165,000 284%
Mr. Preston ....................................... 48,000 0%
Mr. Trevathan ..................................... 48,000 228%
Mr. Harris ........................................ 48,000 63%
Mr. Woods ....................................... 48,000 148%
The Nominating and Governance Committee also establishes ownership guidelines for the independent
directors and performs regular reviews to ensure all independent directors are in compliance.
Policy Limiting Severance Benefits — The MD&C Committee has approved an Executive Officer Severance
Policy that generally provides that the Company may not enter into new severance arrangements with its
executive officers, as defined in the federal securities laws, that provide for benefits, less the value of vested
equity awards and benefits provided to employees generally, in an amount that exceeds 2.99 times the executive
officer’s then current base salary and target bonus, unless such future severance arrangement receives
stockholder approval. The policy applies to all of our named executive officers.
Policy Limiting Death Benefits and Gross-up Payments — The Company has adopted a “Policy Limiting
Certain Compensation Practices,” which generally provides that the Company will not enter into new
compensation arrangements that would obligate the Company to pay a death benefit or gross up-payment to an
executive officer unless such arrangement receives stockholder approval. The policy is subject to certain
exceptions, including benefits generally available to management-level employees and any payment in
reasonable settlement of a legal claim. Additionally, “Death Benefits” under the policy does not include deferred
compensation, retirement benefits or accelerated vesting or continuation of equity-based awards pursuant to
generally-applicable equity award plan provisions.
Insider Trading — The Company maintains an insider trading policy that prohibits executive officers from
engaging in most transactions involving the Company’s Common Stock during periods, determined by the
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