Waste Management 2014 Annual Report Download - page 39

3) Mr. Aardsma’s annual cash incentive payment was fixed pursuant to the terms of his Separation and Release
Agreement. See “How Named Executive Officer Compensation Decisions are Made — Departure of
Mr. Aardsma” above for additional information.
4) Mr. Weidman’s annual cash incentive payment was calculated and paid out in connection with the
divestiture of our Wheelabrator business. See “How Named Executive Officer Compensation Decisions are
Made — Departure of Mr. Weidman” above for additional information.
Long-Term Equity Incentives — Our equity awards are designed to hold individuals accountable for long-
term decisions by rewarding the success of those decisions. The MD&C Committee continuously evaluates the
components of its programs. In determining which forms of equity compensation are appropriate, the MD&C
Committee considers whether the awards granted are achieving their purpose; the competitive market; and
accounting, tax or other regulatory issues, among others. In determining the appropriate awards for the named
executives’ 2014 annual long-term incentive grant, the MD&C Committee decided to grant both PSUs
comprising 80% of each named executive’s award and stock options comprising 20% of each named executive’s
award. Payout on 50% of each named executives’ PSUs granted in 2014 is dependent on cash flow generation.
Payout on the remaining 50% of PSUs granted in 2014 is dependent on total shareholder return relative to the
S&P 500. Meanwhile, stock options encourage focus on increasing the market value of our stock. Before
determining the actual number of PSUs and stock options that were granted to each of the named executives in
2014, the MD&C Committee established a target dollar amount for each named executive’s annual total long-
term equity incentive award. The values chosen were based primarily on the comparison information for the
competitive market and an analysis of the named executives’ responsibility for meeting the Company’s strategic
objectives. Target dollar amounts for equity incentive awards will vary from grant date fair values calculated for
accounting purposes.
Named Executive Officer
Dollar Values of Annual
Long-Term Equity Incentives
Set by the Committee
(at Target)
Mr. Steiner .................................................. $6,250,000
Mr. Trevathan ............................................... $1,500,000
Mr. Fish .................................................... $1,500,000
Mr. Harris ................................................... $1,200,000
Mr. Morris .................................................. $1,200,000
Mr. Aardsma ................................................ $ 600,000
Mr. Weidman ................................................ $ 421,060
Performance Share Units
• Named executives were granted new PSUs with a three-year performance period ending December 31,
2016.
• Payout on 50% of each named executives’ PSUs granted in 2014 is dependent on cash flow generation,
and payout on the remaining 50% of PSUs granted in 2014 is dependent on total shareholder return
relative to the S&P 500.
• Named executives received a 100.12% payout in shares of Common Stock with respect to the 50% of the
PSUs granted in 2012 with a performance period ended December 31, 2014 that were subject to a return
on invested capital performance measure.
• Named executives received a 93.03% payout in shares of Common Stock with respect to the 50% 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.
• With respect to named executives that departed the Company, their payouts on PSUs were pro-rated to
their date of departure.
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