Waste Management 2014 Annual Report Download - page 42

options under the fair value method of accounting using a Black-Scholes methodology to measure stock option
expense at the date of grant. The fair value of the stock options at the date of grant is amortized to expense over
the vesting period less expected forfeitures, except for stock options granted to retirement-eligible employees, for
which expense is accelerated over the period that the recipient becomes retirement eligible.
Other Compensation Policies and Practices
Stock Ownership Guidelines and Holding 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 MD&C Committee monitors ownership levels to confirm that executives are making sustained
progress toward achievement of their ownership guidelines.
Additionally, our stock ownership policy contains holding requirements. Executives with a title of Senior
Vice President or higher must hold 100% of all net shares acquired through the Company’s long-term incentive
plans for at least one year, and those individuals must continue to hold 100% of all such net shares until the
individual’s ownership guideline requirement is achieved. Vice Presidents that are designated insiders must hold
50% of all net shares acquired through the Company’s long-term incentive plans for at least one year, and those
individuals must continue to hold 50% of all such net shares until the individual’s ownership guideline
requirement is achieved. Once achieved, the requisite stock ownership level must continue to be retained
throughout the executive’s employment with the Company. 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. Guidelines are expressed as a fixed number of shares and were last updated
in May 2014 to account for the Company’s recent sustained Common Stock market value. The ownership
requirement of our Chief Executive Officer and President is approximately six times base salary, using his 2014
base salary and a $40 per share stock price. Using the closing price of the Company’s Common Stock on
March 16, 2015, the ownership requirement of our Chief Executive Officer and President is approximately eight
times his 2014 base salary. Shares owned outright, deferred stock units, stock equivalents based on holdings in
the Company’s 401(k) Plan and phantom stock held in the Deferral Plan count toward meeting the targeted
ownership requirements. Restricted stock, RSUs and PSUs, if any, do not count toward meeting the requirement
until they are vested or earned.
The following table outlines the ownership requirements and attainment of those requirements for the
currently-serving named executive officers.
Named Executive Officer
Ownership
Requirement
(number of shares) Attainment as of March 16, 2015
Mr. Steiner1.......................................... 179,500 286%
Mr. Trevathan ........................................ 47,500 422%
Mr. Fish ............................................. 42,500 99%
Mr. Harris ............................................ 23,000 354%
Mr. Morris ........................................... 23,000 72%
1) The table above does not include 343,294 shares held in the name of Steiner Family Holdings, LLC that are
pledged as security for a loan. Since such pledge was made, the Company has adopted a policy prohibiting
future pledges of Company securities by executive officers without board-level approval and requiring that
such pledged shares are not required to meet the executive’s ownership requirement under the ownership
guidelines.
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