Waste Management 2014 Annual Report Download - page 33

of total direct compensation levels and compensation mixes for our executive officers during the second half of
2013, using information from:
• Size-adjusted median compensation data from two general industry surveys in which management
annually participates; the Aon Hewitt 2013 Total Compensation Measurement (TCM) survey and the
Towers Watson 2013 Compensation Data Bank (CDB) survey. The AonHewitt TCM survey includes
over 450 companies ranging in size from $100 million to over $100 billion in annual revenue. The
Towers Watson CDB survey includes over 440 organizations ranging in size from $100 million to over
$100 billion in annual revenue. Data selected from these surveys is scoped based on Company revenue;
and
• Median compensation data from a comparison group of 19 publicly traded U.S. companies, described
below.
The comparison group of companies is initially recommended by the independent consultant prior to the
actual data gathering process, with input from management and the MD&C Committee. The composition of the
group is evaluated and a final comparison group of companies is approved by the MD&C Committee each year.
The selection process for the comparison group begins with all companies in the Standard & Poor’s North
American database that are publicly traded U.S. companies in 15 different Global Industry Classifications. These
industry classifications are meant to provide a collection of companies in industries that share similar
characteristics with Waste Management. The companies are then limited to those with at least $5 billion in
annual revenue to ensure appropriate comparisons, and further narrowed by choosing those with asset intensive
domestic operations, as well as those focusing on transportation and logistics. Companies with these
characteristics are chosen because the MD&C Committee believes that it is appropriate to compare our
executives’ compensation with executives that have similar responsibilities and challenges at other companies.
Prior to establishing compensation for 2014, the MD&C Committee received a statistical analysis of the growth
profile, profitability profile, size and shareholder return of all companies in the comparison group to verify that
the Company is appropriately positioned versus the comparison group. The comparison group used for
consideration of 2014 compensation follows, including the Company’s composite percentile ranking among the
companies in the comparison group based on statistical measures. For purposes of this table, “size” is based on
numerous factors as of December 31, 2012; “profitability” and “growth” are based on numerous factors
measured over a one-year period and three-year period ended December 31, 2012; and “TSR” is based on the
companies’ average TSR percentile ranking for a one-year period and three year-period as of December 31,
2012. This table is provided to reflect how the MD&C Committee confirmed that the Company was
appropriately positioned within its peer group for purposes of establishing 2014 compensation during 2013; as a
result, the information that follows does not reflect the Company’s performance for 2013 or 2014.
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