Waste Management 2015 Annual Report Download - page 36

For purposes of each of the named executives, the general industry data and the comparison group data are
blended when composing the competitive analysis, when possible, such that the combined general industry data
and the comparison group are each weighted 50%. Competitive compensation analysis for the other executive
officers consists only of an average of size-adjusted median general industry survey data. The competitive
analysis showed that 2015 total direct compensation opportunities were near the median for our President and
Chief Executive Officer and did not exceed the median for our other named executive officers. For competitive
comparisons, the MD&C Committee has determined that total direct compensation packages for our named
executive officers within a range of plus or minus 20% of the median total compensation of the competitive
analysis is appropriate. In making these determinations, total direct compensation consists of base salary, target
annual cash incentive, and the annualized grant date fair value of long-term equity incentive awards.
Allocation of Compensation Elements and Tally Sheets. The MD&C Committee considers the forms in
which total compensation will be paid to executive officers and seeks to achieve an appropriate balance between
base salary, annual cash incentive compensation and long-term incentive compensation. The MD&C Committee
determines the size of each element based primarily on comparison group data and individual and Company
performance. The percentage of compensation that is contingent on achievement of performance criteria typically
increases in correlation to an executive officer’s responsibilities within the Company, with performance-based
incentive compensation making up a greater percentage of total compensation for our most senior executive
officers. Additionally, as an executive becomes more senior, a greater percentage of the executive’s
compensation shifts away from short-term to long-term incentive awards.
The MD&C Committee uses tally sheets to review the compensation of our named executive officers, which
show the cumulative impact of all elements of compensation. These tally sheets include detailed information and
dollar amounts for each component of compensation, the value of all equity held by each named executive, and
the value of welfare and retirement benefits and severance payments. Tally sheets provide the MD&C Committee
with the relevant information necessary to determine whether the balance between long-term and short-term
compensation, as well as fixed and variable compensation, is consistent with the overall compensation
philosophy of the Company. This information is also useful in the MD&C Committee’s analysis of whether total
direct compensation provides a compensation package that is appropriate and competitive. Tally sheets are
provided annually to the full Board of Directors.
The following charts display the allocation of total 2015 compensation among base salary, annual cash
incentive at target and long-term incentives at target for (a) our President and Chief Executive Officer and (b) our
other named executives, on average. These charts reflect the MD&C Committee’s 2015 desired total mix of
target compensation for named executives, which includes approximately 58% of total compensation derived
from long-term equity awards, while long-term equity awards comprise approximately 70% of Mr. Steiner’s total
compensation. These charts also reflect that approximately 87% of Mr. Steiner’s target total compensation
opportunities awarded in 2015 were performance-based, while approximately 77% of the target total
compensation for the other named executives was performance-based. We consider stock options granted under
our long-term incentive plan to be performance-based because their value will increase as the market value of our
Common Stock increases.
President and Chief Executive Officer Other Named Executives (on average)
Base Salary
Annual Cash
Incentive
Long-Term Equity
Incentive Awards
17.3%
69.9%
12.8%
22.6%
19.3%
58.1%
Base Salary
Annual Cash
Incentive
Long-Term Equity
Incentive Awards
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