Waste Management 2014 Annual Report Download - page 28

• Company performance on annual cash incentive performance measures for named executive officers
significantly exceeded the target level for two of the three performance measures, weighted at 75% of that
total. As a result, each of the named executives received an annual cash incentive payment for fiscal year
2014 equal to 163.8% of target;
• the Company generated a return on invested capital, for purposes of performance goals associated with
half of our performance share units (“PSUs”) granted in 2012, that was slightly above target of 16.30%
for the three-year performance period ended December 31, 2014, resulting in a 100.12% payout on these
PSUs in shares of Common Stock; and
• with respect to the remaining half of the PSUs granted in 2012 with a performance period ended
December 31, 2014 that were subject to total shareholder return relative to the S&P 500, the performance
of the Company’s Common Stock on this measure was above threshold, but slightly below target,
resulting in a 93.03% payout on these PSUs in shares of Common Stock.
The 2014 results continue to reinforce our emphasis on performance-based compensation, as we believe the
performance criteria underlying our incentive compensation successfully drove the results we were seeking. The
MD&C Committee strives to establish performance goals that are challenging, but attainable, and the MD&C
Committee remains dedicated to the principle that executive compensation should be substantially linked to
Company performance. Accordingly, the compensation of the Company’s executive officers set forth in the
Summary Compensation Table of this Proxy Statement evidences our commitment to pay for performance.
Consideration of Stockholder Advisory Vote
The MD&C Committee established the 2014 compensation plan in early 2014, before the stockholder
advisory vote on executive compensation in May 2014. However, the MD&C Committee noted the results of the
advisory stockholder votes in May 2013, 2012 and 2011, with 97%, 96% and 97%, respectively, of shares
present and entitled to vote at the annual meeting voting in favor of the Company’s executive compensation, and
has since noted the results of the May 2014 advisory stockholder vote, with 97% of shares present and entitled to
vote at the annual meeting voting in favor of the Company’s executive compensation. Accordingly, the results of
the stockholder advisory vote have not caused the MD&C Committee to recommend any changes to our
compensation practices.
2015 Compensation Program Preview
The MD&C Committee continually reviews our compensation program to ensure that it is clearly aligned
with the business strategy and best supports the accomplishment of our goals. The MD&C Committee is pleased
with the results that were delivered under the 2014 compensation program design, while recognizing the need to
grow our Company while continuing our focus on pricing, capital allocation and cost control. As a result, the
MD&C Committee has approved keeping the 2015 annual cash and long-term incentive compensation program
design consistent with the 2014 compensation program design. This consistency reinforces the MD&C
Committee’s efforts to maintain a compensation program that is straightforward and easy to communicate and
understand.
Our Compensation Philosophy for Named Executive Officers
The Company’s compensation philosophy is designed to:
• Attract and retain exceptional employees through competitive compensation opportunities;
• Encourage and reward performance through substantial at-risk performance-based compensation, while
discouraging excessive risk-taking behavior; and
• Align our decision makers’ long-term interests with those of our stockholders through emphasis on equity
ownership.
Additionally, our compensation philosophy is intended to encourage executives to embrace the Company’s
strategy and to lead the Company in setting aspirations that will continue to drive exemplary performance.
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