Waste Management 2015 Annual Report Download - page 183

WASTE MANAGEMENT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Employee Stock Incentive Plans
In May 2014, our stockholders approved our 2014 Stock Incentive Plan (the “2014 Plan”) to replace our
2009 Stock Incentive Plan (the “2009 Plan”). The 2014 Plan authorized 23.8 million shares of our common stock
for issuance pursuant to the 2014 Plan, plus the approximately 1.1 million shares that then remained available for
issuance under the 2009 Plan, and any shares subject to outstanding awards under the 2009 Plan that are
subsequently cancelled, forfeited, terminate, expire or lapse. As of December 31, 2015, approximately
24.4 million shares were available for future grants under the 2014 Plan. All of our stock-based compensation
awards described herein have been made pursuant to either our 2009 Plan or our 2014 Plan, collectively referred
to as the “Incentive Plans.” We currently utilize treasury shares to meet the needs of our equity-based
compensation programs.
Pursuant to the Incentive Plans, we have the ability to issue stock options, stock appreciation rights and
stock awards, including restricted stock, restricted stock units (“RSUs”) and performance share units (“PSUs”).
The terms and conditions of equity awards granted under the Incentive Plans are determined by the Management
Development and Compensation Committee of our Board of Directors.
The 2015 annual Incentive Plan awards granted to the Company’s senior leadership team, which generally
includes the Company’s executive officers, included a combination of PSUs and stock options. The annual
Incentive Plan awards granted to certain key employees included a combination of PSUs, RSUs and stock
options in 2015. The Company has also periodically granted RSUs and stock options to employees working on
key initiatives, in connection with new hires and promotions and to field-based managers.
Restricted Stock Units — A summary of our RSUs is presented in the table below (units in thousands):
Units Weighted Average Fair Value
Unvested at January 1, 2015 ...................... 620 $37.44
Granted ...................................... 167 $54.47
Vested ....................................... (240) $34.78
Forfeited ..................................... (23) $42.41
Unvested at December 31, 2015 ................... 524 $43.76
The total fair market value of RSUs that vested during the years ended December 31, 2015, 2014 and 2013
was $13 million, $3 million and $1 million, respectively. Net of 84,000 units deferred or used for payment of
associated taxes, we issued approximately 156,000 shares of common stock for RSUs that vested during the year
ended December 31, 2015.
RSUs may not be voted or sold by award recipients until time-based vesting restrictions have lapsed. RSUs
primarily provide for three-year cliff vesting and include dividend equivalents accumulated during the vesting
period. Unvested units are subject to forfeiture in the event of voluntary or for-cause termination. RSUs are
subject to pro-rata vesting upon an employee’s retirement or involuntary termination other than for cause and
become immediately vested in the event of an employee’s death or disability.
Compensation expense associated with RSUs is measured based on the grant-date fair value of our common
stock and is recognized on a straight-line basis over the required employment period, which is generally the
vesting period. Compensation expense is only recognized for those awards that we expect to vest, which we
estimate based upon an assessment of expected forfeitures.
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