Waste Management 2015 Annual Report Download - page 40

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’ 2015 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 half of each named executives’ PSUs granted in 2015 is dependent on cash flow generation.
Payout on the remaining half of PSUs granted in 2015 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
2015, 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 .................................................. $6,750,000
Mr. Trevathan ............................................... $1,725,000
Mr. Fish .................................................... $1,725,000
Mr. Harris ................................................... $1,440,000
Mr. Morris .................................................. $1,440,000
Performance Share Units
• Named executives were granted new PSUs with a three-year performance period ending December 31,
2017.
• Payout on half of each named executives’ PSUs granted in 2015 is dependent on cash flow generation,
and payout on the remaining half of PSUs granted in 2015 is dependent on total shareholder return
relative to the S&P 500.
• Named executives received a 196.15% payout in shares of Common Stock with respect to the half of the
PSUs granted in 2013 with a performance period ended December 31, 2015 that were subject to a return
on invested capital performance measure.
• Named executives received a 132.88% payout in shares of Common Stock with respect to the half of the
PSUs granted in 2013 with a performance period ended December 31, 2015 that were subject to total
shareholder return relative to the S&P 500.
PSUs Granted in 2015. Performance share units are granted to our named executive officers annually to
align compensation with the achievement of our long-term financial goals and to build stock ownership.
Performance share units provide an immediate retention value to the Company because there is unvested
potential value at the date of grant. The number of PSUs granted to our named executive officers corresponds to
an equal number of shares of Common Stock. At the end of the three-year performance period for each grant, the
Company will deliver a number of shares ranging from 0% to 200% of the initial number of PSUs granted,
depending on the Company’s three-year performance against pre-established targets.
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