UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
the Securities Exchange Act of 1934
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
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Preliminary Proxy Statement
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
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Definitive Proxy Statement
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Definitive Additional Materials
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Soliciting Material under §240.14a-12
Waste Management, Inc.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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No fee required.
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Fee paid previously with preliminary materials.
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Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)14a-6(i)(1) and 0-110-11.
| | | PRELIMINARY COPY - SUBJECT TO COMPLETION Waste Management, Inc. intends to release definitive copies of the Proxy Statement to stockholders on or about April 2, 2024. | | |
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NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
Tuesday, May 10, 2022
800 Capitol Street, Suite 3000
Houston, Texas 77002
Record Date:
March 15, 202219, 2024
Agenda for the Annual Meeting (or any adjournment or postponement thereof):
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To elect the nine nominees named in the attached proxy statement to our Board of Directors;
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To vote on a proposal to ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2022;2024;
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To vote on a non-binding, advisory proposal to approve our executive compensation;
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To vote on a stockholder proposal regarding a civil rights audit, if properly presented atto approve an amendment to the Annual Meeting;Certificate of Incorporation to provide for officer exculpation; and
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To conduct other business that is properly raised at the meeting.
| | | IMPORTANT NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS: | | | |||
| | | This Notice of Annual Meeting and Proxy Statement and the Company’s Annual Report on Form 10-K for the year ended December 31, | | | |||
| | | ![[MISSING IMAGE: ic_computer-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_computer-pn.gif){kind=small} ![[MISSING IMAGE: ic_computer-pn.gif]](/files/PRE 14A/0001104659-24-033311/ic_computer-pn.gif) | | | You may submit your proxy via the Internet by following the instructions provided in the Notice or, if you received printed copies of the proxy materials, on your proxy card. | | |
| | | ![[MISSING IMAGE: ic_phone-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_phone-pn.gif){kind=small} ![[MISSING IMAGE: ic_mobile-pn.gif]](/files/PRE 14A/0001104659-24-033311/ic_mobile-pn.gif) | | | If you received printed copies of the materials in accordance with the instructions in the Notice, you also have the option to submit your proxy by telephone by calling the toll-free number listed on your proxy card. Telephone voting is available 24 hours per day until 11:59 p.m., Eastern Time, on May | | |
| | | ![[MISSING IMAGE: ic_mail-pn.gif]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_mail-pn.gif){kind=small} ![[MISSING IMAGE: ic_mail-pn.gif]](/files/PRE 14A/0001104659-24-033311/ic_mail-pn.gif) | | | If you received printed copies of the proxy materials in accordance with the instructions in the Notice and would like to submit your proxy by mail, please mark, sign and date your proxy card and return it promptly in the postage-paid envelope provided. | | |
| | | If your shares of Common Stock are held in street name, you will receive instructions from your broker, bank or nominee that you must follow in order to have your shares of Common Stock voted at the Annual Meeting. | | | |||
Your vote is important. We urge all stockholders — whether attending the virtual Annual Meeting or not — to vote and submit their proxies as soon as possible using one of the methods described above.
| | ![[MISSING IMAGE: sg_courtneytippy-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/sg_courtneytippy-bw.jpg) ![[MISSING IMAGE: sg_courtneyatippy-bw.jpg]](/files/PRE 14A/0001104659-24-033311/sg_courtneyatippy-bw.jpg) Courtney A. Tippy Corporate Secretary April 2, 2024 | | | Enroll in Electronic Delivery Today. Help us save paper, time and money! If | |
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PROXY STATEMENT
TABLE OF CONTENTS
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Waste Management, Inc. is a holding company, and all operations are conducted by its subsidiaries. Our subsidiaries are operated and managed locally and generally focus on providing services in distinct geographic areas. Through our subsidiaries, we are North America’s leading provider of comprehensive waste management environmental services,solutions, providing services throughout the United States (“U.S.”) and Canada. We partner with our residential, commercial, industrial and municipal customers and the communities we serve to manage and reduce waste at each stage from collection to disposal, while recovering valuable resources and creating clean, renewable energy.
Our Board of Directors is soliciting your proxy for the 20222024 Annual Meeting of Stockholders and at any postponement or adjournment of the meeting. We are furnishing proxy materials to our stockholders primarily via the Internet. On March 29, 2022,April 2, 2024, we sent an electronic notice of how to access our proxy materials and our Annual Report to stockholders that have previously signed up to receive their proxy materials via the Internet. On March 29, 2022,April 2, 2024, we began mailing a Notice of Internet Availability of Proxy Materials to those stockholders that previously have not signed up for electronic delivery. The Notice contains instructions on how stockholders can access our proxy materials on the website referred to in the Noticeat investors.wm.com or request that a printed set of the proxy materials be sent to them.
Enroll in Electronic Delivery Today! We encourage stockholders to elect to receive all future proxy materials electronically, which is free, fast, convenient environmentally friendly and helps lower our printing and postage costs. If you are a beneficial owner, visit http://www.proxyvote.com or follow the instructions on yourthe Notice, proxy card or voting instructions. All stockholders may also enroll at https://enroll.icsdelivery.com/wmi. Thank you for supporting our sustainability mission.
Shares Outstanding on the Record Date March 15, 2022.
Attending the Meeting Due to on-going public health concerns related to Only stockholders, their proxy holders and our invited guests may attend the COVID-19 pandemic, we will be holding a virtual Annual Meeting. If you were a stockholder of record as of the close of business on the record date or held shares through a bank, broker, or nominee on that date, you are entitledplan to access and participate in the virtual Annual Meeting, including asking questions, examining the list of registered stockholders and voting shares. To attend, the virtual Annual Meeting, you must use the link provided and enter the 16-digit control number found on your Notice, proxy card, or voting instructions. If you do not have your 16-digit control number, you will be admitted to the virtual Annual Meeting as a guest, but you will not have the ability to vote your shares or ask questions at the virtual Annual Meeting.please bring identification. If you are a beneficial owner that holds shares in street name through a bank or broker, you may contactmust also bring your bank or broker statement showing your beneficial ownership of Waste Management, Inc. Common Stock in order to be admitted to the bank, broker or other institution wheremeeting. If you hold your account if you have questions about obtaining your control number. We encourage youare planning to access the virtualattend our Annual Meeting before it begins. Online check-in will start approximately fifteen minutes beforeand require directions to the meeting, on May 10, 2022. If you have difficulty accessing the meeting, a phone number for technical supportplease contact our Corporate Secretary at 713-512-6200. The only items that we anticipate will be availablediscussed at the virtual Annual Meeting web address onare the day ofitems set out in the meeting.Notice. We do not anticipate that there will be any presentations.
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Other Matters The Company does not intend to bring any other matters before the Annual Meeting, nor does the Company have any present knowledge that any other matters will be presented by others for action at the meeting. If any other matters are properly presented, your proxy card authorizes the people named as proxy holders to vote using their judgment.
Voting and Asking Questions at the Meeting Stockholders can vote and ask questions at the Annual Meeting relevant to the items to be voted on or the business of the Company. If you give us yourare a beneficial owner that holds shares in street name, you must bring a legal proxy from the record holder in order to vote your shares willat the Annual Meeting. Whether or not you plan to attend the Annual Meeting, it is important that your shares be represented and voted at the discretionAnnual Meeting. Please read the Notice and this Proxy Statement with care and follow the voting instructions to ensure that your shares are represented at the Annual Meeting.
Changing Your Vote Stockholders of record may revoke their proxy at any time before we vote it at the meeting by submitting a later-dated proxy via the Internet, by telephone, by mail, by delivering instructions to our Corporate Secretary
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2024 Proxy Statement | 1| | GENERAL INFORMATION | |
before the Annual Meeting revoking the proxy or by voting during the Annual Meeting. Attendance at the Annual Meeting, by itself, will not revoke a proxy. If you hold shares through a bank or broker, you may revoke any prior voting instructions by contacting that firm.
The Proposals
The following proposals are being presented for a vote of the proxy holders on any other matters that may properly come beforestockholders at the meeting.Annual Meeting:
| | | | Matter | | | Board Vote Recommendation | | |
| | 1 | | | Election of Director Nominees set forth in this Proxy Statement | | | FOR each director nominee | |
| | 2 | | | Ratification of Ernst & Young LLP as the Company’s Independent Registered Public Accounting Firm for fiscal year | | | FOR | |
| | 3 | | | | | FOR | | |
| | 4 | | | | | |
Votes Required to Adopt the Proposals Each share of our Common Stock outstanding on the record date is entitled to one vote on each of the nine director nominees and one vote on each other proposal.
Proposal 1: To be elected, a director must receive a majority of the votes cast with respect to that director’s election at the meeting; this means that the number of shares voted “for” a director must exceed 50% of the votes cast with respect to that director.
Proposal 2 and 3: In order to be adopted, each of proposals 2 and 3 require the affirmative vote of the holders of a majority of the outstanding shares of Common Stock present, in person or by proxy, and entitled to vote on the matter.
Proposal 4: In order to be adopted, proposal 4 requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote on the matter.
Effect of Abstentions Abstentions will have no effect on the election of directors. For each of the other proposals, abstentions will have the same effect as a vote against these matters.
Effect of Broker Non-Votes If your shares are held by a broker, you may submit your voting instructions to the broker as to how you want your shares to be voted. If you give the broker instructions, your shares must be voted as you direct. If you do not instruct your broker how to vote your shares using the instructions your broker provides to you, your broker may vote your shares at its discretion on proposal 2 regarding ratification of the Company’s independent registered public accounting firm, but not for any other proposal. When this happens, it is called a “broker non-vote.” To be sure your shares are voted in the manner you desire, you should instruct your broker how to vote your shares.
With respect to proposal 1 and proposal 3, broker non-votes will have no effect on the outcome. With respect to proposal 4, a broker non-vote is the same as a vote against the proposal because, as stated above, approval of proposal 4 requires the affirmative vote of the holders of a majority of the outstanding shares of Common Stock entitled to vote on the matter.
Quorum The holders of a majority of the shares of Common Stock outstanding on the record date must be present in person or by proxy to constitute a quorum necessary to conduct the Annual Meeting. Abstentions and broker non-votes are counted for purposes of determining a quorum.
Stockholder Proposals and Nominees for the 20232025 Annual Meeting The Company will not consider any proposal or nomination that is not timely or otherwise does not meet the Company’s By-law and Securities and Exchange Commission (“SEC”) requirements for submitting a proposal or nomination. We also ask that you email a courtesy copy of any notice
2 | 2024 Proxy Statement
2024 Proxy Statement| | GENERAL INFORMATION | |
to GCLegal@wm.com. A copy of our By-laws may be obtained free of charge by writing to our Corporate Secretary at 800 Capitol Street, Suite 3000, Houston, Texas 77002 and is available in the “ESG — Corporate Governance” section of the “Investors” page on our website at www.wm.com.
investors.wm.com.Stockholder Proposals: Eligible stockholders who wish to submit a proposal for inclusion in the proxy statement pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for our 20232025 Annual Meeting must submit their proposal to our Corporate Secretary at Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 for receipt on or before November 29, 2022.December 3, 2024. The proponent and the proposal must comply with the requirements set forth in the federal securities laws, including Rule 14a-8 of the Exchange Act, in order to be included in the Company’s proxy statement and proxy card for the 20232025 Annual Meeting.
Advance Notice Proposals and Nominations: In addition, the Company’s By-laws establish advance notice procedures that must be complied with for stockholders to bring proposals that are not included in the Company’s proxy materials and nominations of persons for election as directors (other than pursuant to our proxy access By-law discussed below) before an annual meeting of stockholders. In accordance with our By-laws, for a proposal or nominee not included in our proxy materials to be properly brought before the 20232025 Annual Meeting, a stockholder’s notice must be delivered to our Corporate Secretary at Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 no earlier than December 11, 202215, 2024 and no later than January 10, 202314, 2025 and must contain the information specified in the Company’s By-laws. In addition to satisfying the foregoing advance notice requirements under our By-laws, to comply with the universal proxy rules under the Exchange Act, (once effective), stockholdersa stockholder who intendintends to solicit proxies in support of director nominees other than Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 11, 2023.January 14, 2025, and must also comply with all other requirements of Rule 14a-19 under the Exchange Act. The Company will disregard any proxies solicited for a stockholder’s director nominee(s) if such stockholder fails to comply with such requirements.
Proxy Access Nominations: The Company’s By-laws permit a stockholder or group of up to 20 stockholders owning 3% or more of the Company’s outstanding Common Stock continuously for at least three years to nominate and include in the Company’s proxy materials director nominees constituting up to the greater of 20% of the Board of Directors or two individuals, provided the stockholder(s) and the nominee(s) satisfy the requirements specified in the Company’s By-laws. Notice of proxy access director nominees must be delivered to our Corporate Secretary at Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 no earlier than October 30, 2022,November 3, 2024, and no later than November 29, 2022,December 3, 2024, together with other information required by the Company’s By-laws.
Expenses of Solicitation We pay the cost of preparing, assembling and mailing this proxy-soliciting material. In addition to the use of the mail, proxies may be solicited personally, by Internet or telephone, or by Waste Managementthe Company’s officers and employees of the Company’s subsidiaries without additional compensation. We pay all costs of solicitation, including certain expenses of brokers and nominees who mail proxy materials to their customers or principals. Also, Innisfree M&A Incorporated has been hired to help in the solicitation of proxies for the 20222024 Annual Meeting for a fee of $15,000$17,500 plus associated costs and expenses.
Annual Report A copy of our Annual Report on Form 10-K for the year ended December 31, 2021,2023, which includes our financial statements for fiscal year 2021,2023, is included with this Proxy Statement. The Annual Report on Form 10-K is not incorporated by reference into this Proxy Statement or deemed to be a part of the materials for the solicitation of proxies.
Householding Information We have adopted a procedure approved by the SEC called “householding.” Under this procedure, stockholders of record who have the same address and last name and do not participate in electronic delivery of proxy materials will receive only one copy of the Proxy Statement and Annual Report unless we are notified that one or more of these individuals wishes to receive separate copies. This procedure helps reduce our printing costs and postage fees.
If you wish to receive a separate copy of this Proxy Statement and the Annual Report, please contact: Waste Management, Inc., Corporate Secretary, 800 Capitol Street, Suite 3000, Houston, Texas 77002, telephone 713-512-6200.
If you do not wish to participate in householding in the future and prefer to receive separate copies of the proxy materials, please contact: Broadridge Financial Solutions, Attention Householding Department, 51 Mercedes Way, Edgewood, NY 11717, telephone 1-866-540-7095. If you are currently receiving multiple copies of proxy materials and wish to receive only one copy for your household, please contact Broadridge.
2024 Proxy Statement | 3BOARD OF DIRECTORS
Our Board of Directors currently has nine10 members. Each member of our Board is elected annually. Mr. John C. Pope has reached the retirement age set forth in the Company’s Corporate Governance Guidelines; therefore, he is not standing for re-election and his term as a director of the Company will expire at the 2024 Annual Meeting. The Board of Directors intends to reduce the size of the Board to nine members effective as of the expiration of Mr. Pope’s term at the 2024 Annual Meeting.
Nominees forDirector
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| | Name | | | Age | | | Tenure | | | Independent | | | Audit | | | Management Development & Compensation | | | Nominating & Governance | | ||||||
| | Thomas L. Bené | | | 61 | | | 2024 – Present | | | ![[MISSING IMAGE: ic_tick-pn.jpg]](/files/PRE 14A/0001104659-24-033311/ic_tick-pn.jpg) | | | | | | ![[MISSING IMAGE: ic_member-pn.jpg]](/files/PRE 14A/0001104659-24-033311/ic_member-pn.jpg) | | | | | ||||||
| | Bruce E. Chinn | | | 67 | | | 2023 – Present | | | | | | | | | | | | | | ||||||
| | James C. Fish, Jr. | | | | | 2016 – Present | | | | | | | | | | | | | | |||||||
| | Andrés R. Gluski | | | | | 2015 – Present | | | ![[MISSING IMAGE: ic_checkmark-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_checkmark-pn.jpg){kind=small} | | | ![[MISSING IMAGE: ic_member-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_member-pn.jpg){kind=small} | | | ![[MISSING IMAGE: ic_chair-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ic_chair-pn.jpg){kind=small} ![[MISSING IMAGE: ic_chair-pn.jpg]](/files/PRE 14A/0001104659-24-033311/ic_chair-pn.jpg) | | | | | |||||||
| | Victoria M. Holt | | | | | 2013 – Present | | | | | | | | | | | | | | |||||||
| | Kathleen M. Mazzarella | | | | | 2015 – Present | | | | | | | | | | | | | | | ||||||
| | Sean E. Menke | | | | | 2021 – Present | | | | | | | | | | | | | | |||||||
| | William B. Plummer | | | | | 2019 – Present | | | | | | | | | | | | | ||||||||
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| | Maryrose T. Sylvester | | | | | 2021 – Present | | | | | | | | | | |||||||||||
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Chair
Member LeadershipStructure
Ms. Kathleen M. Mazzarella’s service as Non-Executive Chair of the Board began in May 2023, following the retirement of Mr. Thomas H. Weidemeyer has servedWeidemeyer. The Board elected Ms. Mazzarella to serve as our Non-Executive ChairmanChair of the Board since May 2018due to her extensive leadership experience, expertise in Board governance, and deep understanding of our Company and our strategic vision. Ms. Mazzarella presides over all meetings of the Board, including executive sessions that only non-employee directors attend. The Non-Executive Chair also serves on all three Board committees. Stockholders and interested parties wishing to communicate with the Board or the non-employee directors should address their communications to Mr. Thomas H. Weidemeyer, Non-Executive ChairmanChair of the Board, c/o Waste Management, Inc., P.O. Box 53569, Houston, Texas 77052-3569.
We separated the roles of ChairmanChair of the Board and Chief Executive Officer at our Company in 2004. We believe that having a Non-Executive ChairmanChair of the Board is in the best interests of the Company and stockholders, due in part to the ever-increasing demands made on boards of directors under federal securities laws, national stock exchange rules and other federal and state regulations. The separation of the positions allows our ChairmanChair of the Board to focus on management of Board matters and allows our Chief Executive Officer to focus his attention on managing our business. Additionally, we believe the separation of those roles contributes to the independence of the Board in its oversight role and in assessing the Chief Executive Officer and management generally. TheAt this time, we do not contemplate a situation in which our Company would not have a Non-Executive Chairman’s responsibilities include leading full Board meetings and executive sessions and managing the Board function. The Board elected Mr. Weidemeyer to serve as ChairmanChair of the Board due to his many years as a valuable member of our Board, his experience serving on boards of other large public companies and his extensive operational and leadership experience. Mr. Weidemeyer also serves on all three Board committees.Board.
4 | 2022 2024 Proxy Statement
2024 Proxy Statement| | BOARD OF DIRECTORS | |
The Board of Directors has determined that each of the following eight non-employee director nominees are independent in accordance with the New York Stock Exchange listing standards: Thomas L. Bené, Bruce E. Chinn, Andrés R. Gluski, Victoria M. Holt, Kathleen M. Mazzarella, Sean E. Menke, William B. Plummer John C. Pope,and Maryrose T. Sylvester and Thomas H. Weidemeyer.Sylvester. James C. Fish, Jr., our President and Chief Executive Officer, is also a director of the Company. As an employee of the Company, Mr. Fish is not an “independent” director.
To assist the Board in determining independence, the Board of Directors adopted categorical standards of director independence, which meet or exceed the requirements of the New York Stock Exchange. These standards specify certain relationships that are prohibited in order for the non-employee director to be deemed independent. The categorical standards our Board uses in determining independence are included in our Corporate Governance Guidelines, which can be found on our website.by accessing the “ESG — Corporate Governance” section of investors.wm.com. In addition to these categorical standards, our Board makes a subjective determination of independence considering relevant facts and circumstances.
The Board reviewed all commercial and non-profit affiliations of each non-employee director and the dollar amount of all transactions between the Company and each entity with which a non-employee director is affiliated to determine independence. These transactions consisted of the Company, through its subsidiaries, providing waste management services in the ordinary course of business and the Company’s subsidiaries purchasing goods and services in the ordinary course of business and included commercial dealings with Graybar Electric Company, Inc., SabreThe AES Corporation, Chevron Phillips Chemical Company LLC and The AESSabre Corporation. Ms. Mazzarella, Mr. MenkeGluski, Mr. Chinn and Mr. Gluski, respectively, serveMenke served as chief executive officer of these entities.entities, respectively, for all or a portion of calender year 2023. The Board concluded there are no transactions between the Company and any entity with which a non-employee director is affiliated that (a) are prohibited by our categorical standards of independence (b) are material individually or in the aggregate or (c) give rise to a material direct or indirect interest for that non-employee director. Accordingly, the Board has determined that each non-employee director candidate meets the categorical standards of independence and that there are no relationships that would affect independence.
Last year the Board held seven regular meetings and onetwo special meeting,meetings, and each committee of the Board met independently as set forth below. Each incumbent director attended at least 75% of the meetings of the Board and the committees on which he or she served. In addition, allseven of the then-serving directors attended the 2021 virtual2023 Annual Meeting of Stockholders. We doMr. Gluski and Mr. Pope did not have a formal policy, but it has been longstanding practiceattend the 2023 Annual Meeting of Stockholders, after notifying the Chair of the Board and the Company of unavoidable conflicts due to travel requirements. Our Corporate Governance Guidelines provide that all directors are expected to attend the annual meeting of stockholders, unless there areand if an unavoidable schedule conflicts or unforeseen circumstances.conflict arises, the director must notify the Chair of the Board in advance.
The Board appoints committees to help carry out its duties. Committee members take on greater responsibility for key issues. All members of the Board are invited to attend, and do generally attend, all committee meetings. The committees review meeting results and recommendations with the full Board. The Board has three separate standing committees: the Audit Committee; the Management Development and Compensation Committee (the “MD&C Committee”); and the Nominating and Governance Committee. Additionally, the Board has the power to appoint additional committees, as it deems necessary.
Our executive officers have primary responsibility for risk management within our Company. Our Board of Directors oversees risk management to ensure that the processes designed, implemented and maintained by our executives are functioning as intended and adapted when necessary to respond to changes in our Company’s strategy as well as emerging risks. The primary means by which our Board oversees our risk management processes is through its regular communications with management and by regularly reviewing our enterprise risk management, or ERM, framework. We believe that our leadership team’s engagement and communication methods are supportive of comprehensive risk management practices and that our Board’s involvement is appropriate to ensure effective oversight.
Our ERM process is supported by regular inquiries of our Company’s Senior Leadership Team, and additional members of management and operations leadership across the enterprise, as to the risks, including emerging risks, that may affect the execution of our business performance or strategic priorities on a short-term, intermediate or achievementlong-term basis.
2024 Proxy Statement | 5| | BOARD OF DIRECTORS | |
We also consult with a range of outside advisors and experts throughout the year, depending on the subject matter of the risk being evaluated. We believe that use of outside advisors and experts complement our long-term outlook. ERM process by ensuring our efforts are comprehensive and balanced. Our ERM process is periodically reviewed and discussed with our Chief Compliance and Ethics Officer and our Vice President of Internal Audit and Controls to enhance alignment with our disclosure controls and procedures. Additionally, our Compliance and Ethics department conducts periodic risk assessments for a range of ongoing risks that are monitored. If those risks rise to certain materiality or frequency thresholds, they receive further analysis and review through the ERM base evaluation and priority risk evaluation processes.
For the most significant or immediate risks, the ERM process is designed to generate actionable insights that are actively discussed and reviewed with the Senior Leadership Team and our Board. Risks and opportunities are assessed and then prioritized using internal evaluations of
financial impact, likelihood and potential timing of occurrence, outlook for changes in the nature or extent of risk exposure and a self-assessment of the Company’s confidence in existing risk mitigation efforts. The Senior Leadership Team reviews the outcomes of the risk assessments, focusing largely on the estimated scope of impacts, as well as the adequacy of current support by internal staff, the sufficiency of financial support for mitigation measures needed to manage and reduce risk, and the sufficiency of any third-party expertise that may be necessary to supplement internal resources. All significant risks have a standardized scorecard that includes forward-looking action plans with measurable indicators and progress updates on action plans from previous assessments.
At quarterly Audit Committee meetings, management provides an ERM report and regularly provides an in depthin-depth update on specific risk topics. Additionally, risks related to our strategy, operations and financial results are also addressed in our Board meetings. Our President and Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Chief Legal Officer, Chief PeopleHuman Resources and Diversity & Inclusion Officer and Chief Sustainability Officer report to our Board and Audit Committee at these meetings, and other members of management periodically attend and present information, including those responsible for our Internal Audit and Controls, Environmental Audit, Business Ethics and Compliance, People,Human Resources, Government Affairs, Digital, Insurance, Safety, Finance and Accounting functions. These presentations allow our directors to have direct communication with management and assess management’s evaluation and administration of the Company’s risk profile through our ERM process. Examples of key areas of assessment addressed by our ERM process and overseen by our Audit Committee and Board include the following: emissions and climate impact; industry disruption; revenue management; legal and regulatory; capital allocation; supply chain management; service to customers; cost discipline; physical infrastructure; brand management; environmental, health & safety; human capital; information security and privacy; technology and currency, interest rate and commodity risk management. Additionally, in accordance with New York Stock Exchange requirements, the Audit Committee is responsible for discussing our major financial risk exposures, steps management has taken to monitor and control such exposures and the Company’s process for risk assessment and management, and quarterly reports are made to the Audit Committee on financial and compliance risks.
Management is encouraged to communicate with our directors with respect to any issues or developments that may require consideration between regularly scheduled Board meetings, and members of management are regularly in direct contact with our Non-Executive ChairmanChair of the Board and our committee chairs. Our Non-Executive ChairmanChair of the Board also facilitates communications with our Board of Directors as a whole and is integral in initiating the discussions among the independent directors necessary to ensure management is adequately evaluating and overseeing risks to our Company.
As North America’s leading provider of comprehensive waste management environmental services, sustainability and environmental stewardship isare embedded in all that we do. We have enabled a people-first, technology-led focus to drive our mission that we are always working for a sustainable tomorrow.to maximize resource value, while minimizing environmental impact, and deliver on our brand promise ALWAYS WORKING FOR A SUSTAINABLE TOMORROW®. As a result, it would not be effective, or possible, to assign responsibility for oversight of oursustainability, which includes environmental social and governance (“ESG”)human capital management risk and performance, to any one committee of our Board of Directors. Rather, various aspects of ESG,sustainability risk and performance, which are already organically a part of our Board and committees’ oversight of our performance, risk management and strategic vision, are addressed in different committees and with our full Board of Directors, as appropriate depending on the subject matter. Additionally, following the appointment of Ms. Tara Hemmer as the Company’s first Senior Vice President and Chief Sustainability Officer, the Board of Directors now receives a quarterly ESG dashboard to highlight critical focus areas and track progress toward ESG goals.
6 | 2024 Proxy Statement
2024 Proxy Statement| | BOARD OF DIRECTORS | |
Our Board has a dedicated annual strategic planning session with our Senior Leadership Team and receives focused strategic updates quarterly. Given the nature of our business, those sessions will address topics such as our people, sustainable operations, waste diversion, recycling business improvements, sustainability growth investments, potentially disruptive technologies and environmental impacts, risks and opportunities. In 2021,2023, the Board received several dedicated strategy updates regarding ESGsustainability topics, including our sustainability growth strategy, progress and trends, goal setting,the Board receives regular updates from our Chief Human Resources and Diversity & Inclusion Officer with respect to our people-first strategy, including workforce evolution, labor market developments and employee retention. Additionally, reflectiveReflective of the importance of inclusion, equitydiversity and diversityinclusion and safety to our organization, the full Board of Directors receives annual in-depth reports on leadership, workforce and supplier diversity, as well as quarterly safety performance updates and a detailed annual healthyhealth and safety report. Additionally, the Company’s Chief Sustainability Officer presents a quarterly Sustainability Scorecard to the entire Board to highlight critical focus areas. Through these reports, and our ESG dashboard, our Board directly oversees our sustainability-related performance, including progress toward ESG goals.our sustainability goals and our decarbonization plan for meeting a science-based climate target, detailed in our 2023 Sustainability Report.
The Company previously announced that, in response to the civil rights audit stockholder proposal that was approved at the 2022 Annual Meeting of Stockholders, it engaged a team led by former U.S. Attorney General Loretta Lynch, now a partner at Paul, Weiss, Rifkind, Wharton & Garrison, to perform an independent assessment of the impact of the Company’s policies and practices on the civil rights of Company stakeholders, and to provide recommendations for further improvement. The assessment included a broad review and analysis in the areas of environmental justice and diversity and inclusion of employees and suppliers, with input from internal and external stakeholders. Our Board received several updates from our senior executives, including our Chief Legal Officer, Chief Human Resources and Diversity & Inclusion Officer and Chief Sustainability Officer, on the structure and progress of the assessment, and the Board engaged directly with former U.S. Attorney General Loretta Lynch on the assessment findings and recommendations. The assessment was recently completed, and the report is available at sustainability.wm.com.
Our Audit Committee also plays a significant role in oversight of ESGsustainability risk and performance. As discussed above, our Audit Committee receives regular ERM updates with in depthin-depth discussion on specific risk topics. At least annually, one of
the in depth dsicussionsin-depth discussions will look at an aspect of ESGsustainability risk. Additionally, the Audit Committee receives quarterly reports on our compliance programs, including ethics and environmental and safety audit, with an annual in depthin-depth review of our compliance programs.programs with risk assessments. During 2023, our Audit Committee received updates on proposed regulatory disclosure requirements related to climate and cybersecurity and the Company’s preparations. Our Audit Committee also has responsibility for oversight of information and cyber securitycybersecurity and assessment of cyber threats and defenses. Our Audit Committee receives reports from our most senior executives in the Digital organization, and the Company’s executive officers, at least twice a year. Topics historically covered in such reports include third-party evaluation of our technology infrastructure and information security management system against the industry-standard NIST (National Institute of Standards and Technology) cybersecurity framework; risk mitigation through the Company’s enterprise-wide cyber securitycybersecurity training, including our Board of Directors, conducted at least annually, regular simulated phishing tests and third-party penetration testing; review of the Company’s cyber incident insurance coverage and external cyber incident resources; review of the Company’s incident response plan and consideration of applicable laws and regulations, including those related to privacy.
2024 Proxy Statement | 7| | BOARD OF DIRECTORS | |
Strong and effective corporate governance is established and overseen by our Nominating & Governance Committee. The Committee leads the process for annual Board, committee and director evaluations and is responsible for review and recommendation of Board and committee composition and leadership. In connection with performing this vital function, the Nominating & Governance Committee reviews the skills, expertise and qualifications of our existing directors, as well as potential external candidates, and considers matters such as inclusion and diversity, tenure and Board refreshment. These efforts deliver on the Nominating & Governance Committee’s purpose to identify and nominate the best possible candidates to guide and support the Company’s strategy and its commitment to serve and care for our customers, the environment, the communities in which we work and our stockholders. Please see the discussion of the Nominating and Governance Committee below for more information on this robust process.
For additional information about the topics discussed above, including ESGsustainability goals, metrics and progress, we encourage stockholders to review our 20212023 Sustainability Report at https://sustainability.wm.com. Our 2021The Sustainability Report doesconveys the strong linkage between the Company’s sustainability goals and our growth strategy, inclusive of the planned and ongoing expansion of the Company’s recycling and renewable energy businesses. Our 2023 Sustainability Report and the civil rights assessment report referenced above do not constitute a part of, and isare not incorporated by reference into, this Proxy Statement or any report filedwe file with (or furnish to) the SEC.
2024 Proxy Statement| | BOARD OF DIRECTORS | |
| | THE AUDIT COMMITTEE Members: Number of Meetings Held in | | |||
| | William B. Plummer, Chair Bruce E. Chinn Andrés R. Gluski | | | Victoria M. Holt Kathleen M. Mazzarella Sean E. Menke | |
| | Mr. Plummer has been the | | |||
| | Key Functions | | |||
| | The Audit Committee’s duties are set forth in a written charter that was approved by the Board of Directors. A copy of the charter can be found | | |||
| | Administrative Responsibilities • Report to the Board, at least annually, all public company audit committee memberships by members of the Audit Committee; • Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full Board; and • | | |||
| | Financial Statements • Review financial statements and Forms 10-K and 10-Q with management and the independent auditor; • Review all earnings press releases and discuss with management the type of earnings guidance that we provide to analysts and rating agencies; • Discuss with the independent auditor any material changes to our accounting principles and matters required to be communicated by Public Company Accounting Oversight Board (United States) Auditing Standard No. 1301 Communications with Audit Committees; • Review our financial reporting, accounting and auditing practices with management, the independent auditor and our internal auditors; • Review management’s and the independent auditor’s assessment of the adequacy and effectiveness of internal controls over financial reporting; and • Review executive officer certifications related to our reports and filings. | | |||
| | Independent Auditor • Engage an independent auditor, determine the auditor’s compensation and replace the auditor if necessary; • • Review the independence of the independent auditor and establish our policies for hiring current or former employees of the independent auditor; • • Evaluate the lead partner of our independent audit team and review a report, at least annually, describing the independent auditor’s internal control procedures; and • Pre-approve all services, including non-audit engagements, provided by the independent auditor. | | |||
| | Internal Audit • Review the plans, staffing, reports and activities of the internal auditors; and • Review and establish procedures for receiving, retaining and handling complaints, including anonymous complaints by our employees, regarding accounting, internal controls and auditing matters. | | |||
2024 Proxy Statement| 9| | BOARD OF DIRECTORS | |
| | AUDIT COMMITTEE REPORT | |
| | The role of the Audit Committee is, among other things, to oversee the Company’s financial reporting process on behalf of the Board of Directors, to recommend to the Board whether the Company’s financial statements should be included in the Company’s Annual Report on Form 10-K and to select the independent auditor for ratification by stockholders. Company management is responsible for the Company’s financial statements as well as for its financial reporting process, accounting principles and internal controls. The Company’s independent auditors are responsible for performing an audit of the Company’s financial statements and expressing an opinion as to the conformity of such financial statements with accounting principles generally accepted in the United States. | |
| | The Audit Committee has reviewed and discussed the Company’s audited financial statements as of and for the year ended December 31, • First, the Audit Committee discussed with Ernst & Young LLP, the Company’s independent registered public accounting firm for fiscal year • Second, the Audit Committee discussed with Ernst & Young LLP its independence and received from Ernst & Young LLP a letter concerning independence as required under applicable independence standards for auditors of public companies. This discussion and disclosure helped the Audit Committee in evaluating such independence. The Audit Committee also considered whether the provision of other non-audit services to the Company is compatible with the auditor’s independence. • Third, the Audit Committee met periodically with members of management, the internal auditors and Ernst & Young LLP to review and discuss internal controls over financial reporting. Further, the Audit Committee reviewed and discussed management’s report on internal control over financial reporting as of December 31, • Finally, the Audit Committee reviewed and discussed, with the Company’s management and Ernst & Young LLP, the Company’s audited consolidated balance sheet as of December 31, • The Committee has also discussed with the Company’s internal auditors and independent registered public accounting firm the overall scope and plans of their respective audits. The Committee meets periodically with both the internal auditors and independent registered public accounting firm, with and without management present, to discuss the results of their examinations and their evaluations of the Company’s internal controls over financial reporting. • The members of the Audit Committee are not engaged in the accounting or auditing profession and, consequently, are not experts in matters involving auditing or accounting. In the performance of their oversight function, the members of the Audit Committee necessarily relied upon the information, opinions, reports and statements presented to them by Company management and by the independent registered public accounting firm. • Based on the reviews and discussions explained above (and without other independent verification), the Audit Committee recommended to the Board (and the Board approved) that the Company’s financial statements be included in its The Audit Committee of the Board of Directors William B. Plummer, Chair Bruce E. Chinn Andrés R. Gluski Victoria M. Holt Kathleen M. Mazzarella Sean E. Menke | |
2024 Proxy Statement| | BOARD OF DIRECTORS | |
| | THE MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE Members:Number of Meetings Held in | | |||
| | Andrés R. Gluski, Chair Thomas L. Bené Kathleen M. Mazzarella | | | William B. Plummer John C. Pope Maryrose T. Sylvester | |
| | Mr. Gluski has served as the | | |||
| | Key Functions Our MD&C Committee is responsible for overseeing our executive officer compensation, as well as developing the Company’s compensation philosophy generally. The MD&C Committee’s written charter, which was approved by the Board of Directors, can be found • Review and establish policies governing the compensation and benefits of our executive officers; • Approve the compensation of our executive officers and set the • Conduct an annual evaluation of our Chief Executive Officer by all independent directors and set his compensation; • Oversee the administration of our equity-based incentive plans; • Review the results of the stockholder advisory vote on executive compensation and consider any implications of such voting results on the Company’s compensation programs; • Recommend to the full Board new Company compensation and benefit plans or changes to our existing plans; • Evaluate and recommend to the Board the compensation paid to our non-employee directors; • Review the independence of the MD&C Committee’s compensation consultant annually; and • Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full Board. In overseeing compensation matters, the MD&C Committee may delegate authority for day-to-day administration and interpretation of the Company’s plans, including selection of participants, determination of award levels within plan parameters, and approval of award documents, to Company employees. However, the MD&C Committee may not delegate any authority to Company employees under those plans for matters affecting the compensation and benefits of the executive officers. | | |||
| | COMPENSATION COMMITTEE REPORT The MD&C Committee has reviewed and discussed the Compensation Discussion and Analysis | | |||
| | The Management Development and Compensation Committee of the Board of Directors | | |||
| | Andrés R. Gluski, Chair Kathleen M. Mazzarella William B. Plummer John C. Pope Maryrose T. Sylvester | | |||
2024 Proxy Statement| 11| | BOARD OF DIRECTORS | |
| | COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During | | |||
| | THE NOMINATING AND GOVERNANCE COMMITTEE | | |||
| | Members: | | | Number of Meetings Held in | |
| | Victoria M. Holt, Chair Kathleen M. Mazzarella Sean E. Menke | | | John C. Pope Maryrose T. Sylvester | |
| | Ms. | | |||
| | Key Functions The Nominating and Governance Committee has a written charter that has been approved by the Board of Directors and can be found • Review and recommend the composition of our Board, • Evaluate the charters of each of the committees and recommend directors to serve as committee chairs; • • Review individual director’s performance in consultation with the • Recommend retirement policies for the Board, the terms for directors and the proper ratio of employee directors to • • Perform an annual review of its performance relative to its charter and report the results of its evaluation to the full Board; • • Review stockholder proposals received for inclusion in the Company’s proxy statement and recommend action to be taken with regard to the proposals to the Board; and • • Identify and recommend to the Board candidates to fill director vacancies. The Nominating and Governance Committee is continually engaged in reviewing the skills, expertise and qualifications of our existing directors, as well as potential external candidates, to identify and nominate the best possible candidates to guide and support the Company’s strategy and its commitment to serve and care for our customers, the environment, the communities in which we work and our stockholders. This is a process that the Nominating and Governance Committee believes should continue to involve significant subjective judgments. With the assistance of an external consultant, the Nominating and Governance Committee identified Mr. Thomas L. Bené as a potential director candidate. Following a robust consideration process summarized below and recommendation by the Nominating and Governance Committee, the Board increased its size to 10 members and elected Mr. Bené to serve as a member of our Board, effective March 1, 2024. The Nominating and Governance Committee also recommended, and the Board approved, appointment of Mr. Bené to the MD&C Committee. Mr. Bené is a nominee for re-election at the Annual Meeting. | | |||
12 | 2024 Proxy Statement
2024 Proxy Statement| | BOARD OF DIRECTORS | |
| | The Nominating and Governance Committee considers current and future needs of the Board as a whole and reviews a matrix of experience, skills and expertise to inform nominee criteria. The Committee recommends individuals as nominees based on an evaluation of all factors deemed relevant, including personal and professional integrity and sound judgment, business and professional skills and experience, independence, possible conflicts of interest, diversity and the potential for effectiveness, in conjunction with the other directors, to serve the long-term interests of the stockholders. The Committee seeks diversity of background, thoughts and opinions on the Board obtained through, among other factors, diversity in business experience, professional expertise, gender and racial / ethnic background. The Nominating and Governance Committee has considered the gender and racial / ethnic composition of our Board, including the presence of three women, Mr. Plummer’s and Mr. Chinn’s self-identification as African American / Black and Mr. Gluski’s self-identification as Hispanic, and believes these factors, among numerous others, contribute to a valuable diversity of background, thoughts and opinions on our Board. | | |||
| | When nominating or re-nominating individuals to serve as directors of the Company, the Nominating and Governance Committee also The Nominating and Governance Committee will consider all potential nominees on their merits and welcomes suggestions from directors, members of management, and stockholders. Before being recommended for nomination by the Committee, director candidates are interviewed by the Chief Executive Officer, the | | |||
Related Party Transactions
The Board of Directors has adopted a written Related Party Transactions Policy for the review and approval of related party transactions. Our policy generally defines related party transactions as current or proposed transactions since the beginning of the last fiscal year in excess of $120,000 in which (a) the Company is a participant and (b) any director; executive officer; immediate family member of any director or executive officer; or party known to be the owner of more than five percent5% of the Company’s Common Stock has a direct or indirect material interest. In addition, the policy sets forth certain transactions that will not be considered related party transactions, including (a) executive officer compensation and benefit arrangements; (b) director compensation arrangements; (c) business travel and expenses, advances and reimbursements in the ordinary course of business; (d) indemnification payments and advancement of expenses, and payments under directors’ and officers’ indemnification insurance policies; (e) any transaction between the Company and any entity in which a related party has a relationship solely as a director; a less than 5% equity holder; a beneficial owner of the Company’s Common Stock that reports such ownership on a Schedule 13G due to lack of control or intent to influence control; or an employee (other than an executive officer) and (f) purchases of Company debt securities, provided that the related party has a passive ownership of no more than 2% of the principal amount of any outstanding series. The Nominating and Governance Committee is responsible for overseeing the policy.
All executive officers and directors are required to notify the Chief Legal Officer as soon as practicable of any potential related party transaction that involves the Company. The Chief Legal Officer will determine whether such transaction or relationship constitutes a related party transaction that must be referred to the Nominating and Governance Committee. In the event that the Chief Legal Officer is a participant in a potential related party transaction, the determination whether the transaction must be referred to the Nominating and Governance Committee shall be made by the Chief Executive
2024 Proxy Statement | 13| | BOARD OF DIRECTORS | |
Officer, with consultation from the Corporate Secretary and the Chief Compliance and Ethics Officer. Any member of the Committee who has an interest in a transaction presented for consideration will abstain from voting on the related party transaction.
The Nominating and Governance Committee will review a detailed description of the transaction, including the terms of the transaction; the business purpose of the transaction; the benefits to the Company and to the relevant related party; and whether the transaction would require a waiver of the Company’s Code of Conduct.
In determining whether to approve a related party transaction, the Nominating and Governance Committee will consider, among other things, the following factors:
•
whether the terms of the related party transaction are fair to the Company and such terms would be reasonable in an arms-length transaction;
•
whether there are business reasons for the Company to enter into the related party transaction;
•
whether the related party transaction would impair the independence of any non-employee director;
•
whether the related party transaction would present an improper conflict of interest for any director or executive officer of the Company; and
•
whether the related party transaction is material to the Company or the individual.
The Nominating and Governance Committee’s consideration of related party transactions and its determination of whether to approve such a transaction are reflected in the minutes of the Nominating and Governance Committee’s meetings. As discussed above under “Independence of Board Members,”Based on its review processes for potential related party transactions in 2023, the Company reviewed allidentified certain continuing transactions betweeninvolving employment of immediate family members of executive officers that the Nominating and Governance Committee had previously considered and approved. The Nominating and Governance Committee re-reviewed the employment relationships set forth below and again concluded that such transactions are not inconsistent with the interests of the Company and each entity with which a non-employee director is affiliated,its stockholders. Other than as well as all transactions between the Company and each entity with which an executive officer is affiliated, and the Company isreported below, we are not aware of any other transactions in 20212023 that are required to be disclosed.
Two brothers of Kelly Rooney, our Senior Vice President and Chief Human Resources and Diversity & Inclusion Officer, continue to be employed by subsidiaries of Waste Management, Inc. as Senior District Managers. Each received total cash compensation in 2023 in excess of $120,000 but less than $260,000, and an equity incentive grant with a target value of less than $15,000. The compensation of Ms. Rooney’s brothers is determined in accordance with the compensation practices generally applicable to employees of Company subsidiaries with comparable qualifications and responsibilities and holding similar positions, and without the involvement, input or approval of Ms. Rooney. In addition, Ms. Rooney is not directly or indirectly responsible for managing or overseeing the work of her brothers.
The brother-in-law of John Morris, our Executive Vice President and Chief Operating Officer, continues to be employed by a subsidiary of Waste Management, Inc. as a Senior Manager of Talent Management & Learning Optimization. In 2023, he received total cash compensation in excess of $120,000, but less than $200,000. The compensation of Mr. Morris’s brother-in-law is determined in accordance with the compensation practices generally applicable to employees of Company subsidiaries with comparable qualifications and responsibilities and holding similar positions, and without the involvement, input or approval of Mr. Morris. In addition, Mr. Morris is not directly or indirectly responsible for managing or overseeing the work of his brother-in-law.
Board of Directors Governing Documents
Stockholders may obtain copies of our Corporate Governance Guidelines, the charters of the Audit Committee, the MD&C Committee, and the Nominating and Governance Committee, and our Code of Conduct free of charge by contacting the Corporate Secretary, c/o Waste Management, Inc., 800 Capitol Street, Suite 3000, Houston, Texas 77002 or by accessing the “ESG — Corporate Governance” section of the “Investors” page on our website at www.wm.com.investors.wm.com.
14 | 2024 Proxy Statement
2024 Proxy Statement| | BOARD OF DIRECTORS | |
Non-Employee Director Compensation
Our non-employee director compensation program consists of equity awards and cash consideration. Director compensation is recommendedreviewed annually by the MD&C Committee, with the assistance of an independent third-party consultant, and set by action of the Board of Directors. The Board’s goal in designing directors’ compensation is to provide a competitive package that will enable the Company to attract and retain highly skilled individuals with relevant experience. The compensation is also designed to reward the time and talent required to serve on the board of a company of our size and complexity. The Board seeks to provide sufficient flexibility in the form of compensation delivered to meet the needs of different individuals while ensuring that a substantial portion of directors’ compensation is linked to the long-term success of the Company. The 2021Following its annual review, the MD&C Committee did not recommend any changes to director compensation for 2023. As a result, the 2023 non-employee director compensation levels wereare consistent with the levels established in February 2020.2022.
Equity Compensation
Non-employee directors receive an annual grant of shares of Common Stock under the Company’s 2014 Stock Incentive Plan.current stock incentive plan. The shares are fully vested at the time of grant; however, non-employee directors are required to hold all net shares until one year after retirementthroughout their tenure on the Board and are subject to ownership guidelines, as discussed below. The grant of shares is generally made in two equal installments, and the number of shares issued is based on the market value of our Common Stock on the dates of grant, which are typically January 15 and July 15 of each year. Each non-employee director serving at the time received a grant of Common Stock valued at approximately $82,500$90,000 in January 20212023 and July 2021. Mr. Weidemeyer received2023. Additionally, any director serving as Non-Executive Chair of the Board receives an additional grant of Common Stock valued at approximately $50,000 in each of January 2021 and July 2021 for his service as Non-Executive Chairman of the Board in 2021.
each year.Cash Compensation
Annual Chair Retainers:
$100,000 for Non-Executive Chairman
Chair of the Board
$25,000 for Audit Committee Chair
$20,000 for MD&C Committee Chair
$20,000 for Nominating and Governance Committee Chair
Chair of the Board
$25,000 for Audit Committee Chair
$20,000 for MD&C Committee Chair
$20,000 for Nominating and Governance Committee Chair
Stock Ownership Guidelines for Non-Employee Directors
Our non-employee directors are subject to ownership guidelines that establish a minimum ownership level and require that all net shares received in connection with a stock award, after selling shares to pay all applicable taxes, be held throughout their tenure as a director. The ownership guideline for non-employee directors is equal to approximately five times the non-employee directors’ annualized cash retainer. As of December 31, 2021,2023, this amount was $575,000.$600,000. There is no deadline for non-employee directors to reach their ownership guideline; however, the MD&C Committee performs regular reviews to confirm that all non-employee directors are in compliance or are showing sustained progress toward achievement of their ownership guideline. Based on the closing price of our Common Stock on March 15, 2022,5, 2024, all of our non-employee directors have reached the ownership guideline exceptwith the exception of our two newest directors, Mr. MenkeBené and Ms. Sylvester,Mr. Chinn, who are making appropriate progress toward the ownership guideline. Additionally, our Insider Trading Policy provides that directors are not permitted to hedge their ownership of Company securities, including trading in options, warrants, puts and calls or similar derivative instruments on any security of the Company or selling any security of the Company “short.”
2024 Proxy Statement | 15| | BOARD OF DIRECTORS | |
2023 Director Compensation Table
The table below shows the aggregate cash paid, and stock awards issued, to the non-employee directors in 20212023 in accordance with the descriptions set forth above:
| | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Total ($) | | Name | | Fees Earned or Paid in Cash ($) | | Stock Awards ($)(1) | | Total ($) | | ||||||||||||||||||||||||
| | Frank M. Clark, Jr.(2) | | | | 67,500 | | | | | 82,541 | | | | | 150,041 | | | Bruce E. Chinn(2) | | | | 106,800 | | | | | 160,125 | | | | | 266,925 | | | ||||||
| | Andrés R. Gluski(3) | | | | 128,600 | | | | | 165,039 | | | | | 293,639 | | | Andrés R. Gluski | | | | 140,000 | | | | | 179,992 | | | | | 319,992 | | | ||||||
| | Victoria M. Holt | | | | 115,000 | | | | | 165,039 | | | | | 280,039 | | | Victoria M. Holt(3) | | | | 133,775 | | | | | 179,992 | | | | | 313,767 | | | ||||||
| | Kathleen M. Mazzarella | | | | 135,000 | | | | | 165,039 | | | | | 300,039 | | | Kathleen M. Mazzarella(4) | | | | 198,785 | | | | | 248,798 | | | | | 447,583 | | | ||||||
| | Sean E. Menke(4) | | | | 95,833 | | | | | 137,542 | | | | | 233,375 | | | Sean E. Menke | | | | 120,000 | | | | | 179,992 | | | | | 299,992 | | | ||||||
| | William B. Plummer | | | | 140,000 | | | | | 165,039 | | | | | 305,039 | | | William B. Plummer | | | | 145,000 | | | | | 179,992 | | | | | 324,992 | | | ||||||
| | John C. Pope | | | | 115,000 | | | | | 165,039 | | | | | 280,039 | | | John C. Pope | | | | 120,000 | | | | | 179,992 | | | | | 299,992 | | | ||||||
| | Maryrose T. Sylvester(4) | | | | 95,833 | | | | | 137,542 | | | | | 233,375 | | | Maryrose T. Sylvester | | | | 120,000 | | | | | 179,992 | | | | | 299,992 | | | ||||||
| | Thomas H. Weidemeyer | | | | 215,000 | | | | | 264,967 | | | | | 479,967 | | | Thomas H. Weidemeyer(5) | | | | 110,000 | | | | | 140,045 | | | | | 250,045 | | | ||||||
(1)
Amounts in this column represent the grant date fair value of stock awards granted in 2021,2023, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. The grant date fair value of the awards is equal to the number of shares issued multiplied by the average of the high and low market price of our Common Stock on each date of grant; there are no assumptions used in the valuation of shares.
(2)
Mr. Chinn was elected to our Board effective February 10, 2023 and received prorated equity and cash compensation for service as a director from the date of election until the next regular installment of compensation payments in July 2023.
(3)
Ms. Holt received prorated cash compensation for service as Chair of the Nominating and Governance Committee from May 9, 2023 until the next regular installment of compensation payments in July 2023.
(4)
Ms. Mazzarella received prorated equity and cash compensation for service as Non-Executive Chair of the Board from May 9, 2023 until the next regular installment of compensation payments in July 2023.
(5)
As of the 20212023 Annual Meeting, Mr. ClarkWeidemeyer had reached the retirement age set forth in the Company’s Corporate Governance Guidelines; therefore, he did not stand for re-election and hisre-election. His term as a director of the Company expired, and his service as Non-Executive Chair of the Board ended, on May 11, 2021.
2024 Proxy StatementELECTION OF DIRECTORS
(Item 1 on the Proxy Card)Card — Director Nominees)
The first item on the proxy card is the election of nine directors to serve until the 20232025 Annual Meeting of Stockholders or until their respective successors have been duly elected and qualified. The Board has nominated the nine director candidates named below and recommends that you vote FOR their election. Each of the director nominees currently serves on our Board of Directors. If any nominee is unable or unwilling to serve as a director, which we do not anticipate, the Board, by resolution, may reduce the number of directors that constitute the Board or may choose a substitute. To be elected, a director must receive a majority of the votes cast with respect to that director at the meeting. Our Company’s By-laws provide that if the number of shares voted “for” any director nominee does not exceed 50% of the votes cast with respect to that director, he or she will tender his or her resignation to the Board of Directors contingent on the acceptance of such resignation by the Board. The Nominating and Governance Committee will then make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the resignation, taking into account the Nominating and Governance Committee’s recommendation, and publicly disclose its decision and the rationale behind it within 90 days of the date of the certification of the election results.
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2024 Proxy Statement || | ELECTION OF DIRECTORS | |
| | | | | Bené | | | Chinn | | | Fish | | | Gluski | | | Holt | | | Mazzarella | | | Menke | | | Plummer | | | Sylvester | |
| | SKILLS AND EXPERIENCE | | |||||||||||||||||||||||||||
| | Executive Leadership | | | ![[MISSING IMAGE: ic_star-pn.gif]](/files/PRE 14A/0001104659-24-033311/ic_star-pn.gif) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Public Company Board and Governance | | | ![[MISSING IMAGE: ic_bullet-bw.gif]](/files/PRE 14A/0001104659-24-033311/ic_bullet-bw.gif) | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Strategic Planning | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Operational Excellence | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Financial Expertise and Capital Allocation | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Human Capital Management | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Sustainability/ Environmental/ Renewable Energy | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Digital / Information Technology / Cybersecurity | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Risk Management | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | DEMOGRAPHICS | | |||||||||||||||||||||||||||
| | Gender | | | Male | | | Male | | | Male | | | Male | | | Female | | | Female | | | Male | | | Male | | | Female | |
| | Race/Ethnicity | | | White/ Caucasian | | | Black/ African American | | | White/ Caucasian | | | Hispanic | | | White/ Caucasian | | | White/ Caucasian | | | White/ Caucasian | | | Black/ African American | | | White/ Caucasian | |
![[MISSING IMAGE: ic_star-pn.jpg]](/files/PRE 14A/0001104659-24-033311/ic_star-pn.jpg)
Each director nominee’s identification of the top four categories of skill and expertise through which they contribute to the Board. This is not an indication that any director nominee does not possess any particular category of skill or expertise, but rather, a targeted reflection of the key areas through which each director nominee supports the effectiveness of the Board and furthers the long-term success of the Company
![[MISSING IMAGE: ic_bullet-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ic_bullet-bw.jpg)
Each director nominee’s identification of additional categories of skill and expertise in which they have substantial experience and in-depth knowledge
18 | 2024 Proxy Statement
2024 Proxy Statement| | ELECTION OF DIRECTORS | |
| | ![[MISSING IMAGE: ic_executiveleader-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_executiveleader-ko.gif) | | | Executive Leadership | | | | ![[MISSING IMAGE: ic_publiccompany-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_publiccompany-ko.gif) | | | Public Company Board and Governance | | | | ![[MISSING IMAGE: ic_strategicplan-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_strategicplan-ko.gif) | | | Strategic Planning | |
| | Directors who hold or have held significant executive leadership positions with large organizations provide unique insights. These individuals have valuable experience developing talent and solving problems in large, complex organizations and can capably and confidently advise the Company’s senior leadership team on a wide range of issues. These individuals often possess extraordinary leadership qualities and have the ability to identify and develop these qualities in others. | | | | Directors with a history of service on other public company boards help our Board function effectively by drawing on knowledge of governance best practices. These individuals bring a practical understanding of organizations and processes and the importance of management accountability, transparency, and the protection of stockholder interests. These individuals help our Board structure and execute its independent oversight of management. | | | | Directors with experience developing and driving the strategic direction and growth of large organizations provide valuable guidance to the Company’s senior leadership team. These individuals have expertise in areas including transformation, innovation and change management. These individuals often also have sophisticated experience in growth through large corporate transactions, including mergers & acquisitions. | | |||||||||
| | ![[MISSING IMAGE: ic_operational-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_operational-ko.gif) | | | Operational Excellence | | | | ![[MISSING IMAGE: ic_financialexpertise-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_financialexpertise-ko.gif) | | | Financial Expertise and Capital Allocation | | | | ![[MISSING IMAGE: ic_humancapital-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_humancapital-ko.gif) | | | Human Capital Management | |
| | ![[MISSING IMAGE: ph_andresgluski-bwlr.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_andresgluski-bwlr.jpg) | | | | Directors with a deep understanding of finance and financial reporting lead our Board’s oversight of financial performance and robust internal controls. These individuals have expertise in designing and implementing financing and capital allocation strategies, evaluating stockholder returns and accessing capital markets. These individuals have knowledge of corporate finance and accounting standards necessary for effective oversight of public company financial reporting. | | | | Directors with experience in human capital management provide valuable guidance in support of the Company’s People First strategy. These individuals understand the dynamics of attracting, motivating, and retaining talented and engaged employees. These individuals have expertise in talent management, succession planning and creating a diverse and inclusive workplace that prioritizes safety as a core value. | | |||||||||
| | ![[MISSING IMAGE: ic_sustainability-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_sustainability-ko.gif) | | | Sustainability/Environmental/ Renewable Energy | | | | ![[MISSING IMAGE: ic_digital-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_digital-ko.gif) | | | Digital/Information Technology/ Cybersecurity | | | | ![[MISSING IMAGE: ic_risk-ko.gif]](/files/PRE 14A/0001104659-24-033311/ic_risk-ko.gif) | | | Risk Management | |
| | Directors with experience overseeing development, implementation and assessment of sustainability strategies, and risks and opportunities related to sustainability and provision of environmental services, support the Company’s ability to deliver on its sustainability growth strategy, goals and commitments. These individuals understand the importance of linking sustainability and renewable energy to the creation of long-term stockholder value, while also operating in an environmentally sound and responsible manner. These individuals also understand the regulatory environment in which the Company operates and the connection of sustainability and corporate responsibility to the Company’s long-standing commitment to environmental stewardship. | | | | Directors with experience in digital and information technology leadership provide valuable perspectives on technology innovation, digital solutions, innovative business models, data analytics, e-commerce applications, marketing strategy and cyber risks. These individuals are particularly engaged in our Board’s oversight of the Company’s comprehensive information security and cybersecurity programs. These individuals also bring knowledge of use of technology to further the Company’s strategy to enhance customer experience and reduce costs and labor intensity through automation. | | | | Directors that have participated in development, implementation and evaluation of sophisticated risk management programs are critical in helping our Board fulfill its responsibilities with respect to risk oversight and mitigation. These individuals have experience in effectively identifying, prioritizing and managing a broad spectrum of complex and significant risks facing a large public company. | | |||||||||
2024 Proxy Statement | 19| | ELECTION OF DIRECTORS | |
| | Thomas L. Bené | | ||||
| | ![[MISSING IMAGE: ph_tombene-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_tombene-bw.jpg) Age: 61 Director since: March 2024 Board Committee: Management Development & Compensation | | | | Position and Business Experience President and Chief Executive Officer — Breakthru Beverage Group, LLC (private beverage wholesale distributor) since October 2021. Former President and Chief Executive Officer — National Restaurant Association, served from June 2020 to September 2021. Former President and Chief Executive Officer — Sysco Corporation (multinational wholesale restaurant distributor), served from 2018 to January 2020; also served as Executive Advisor from February 2020 to March 2020. Director of Sysco Corporation from 2018 to January 2020. Qualifications Tom Bené has four decades of experience executing on strategic business priorities and delivering financial growth for large companies. Since 2021, he has served as President and Chief Executive Officer of Breakthru Beverage Group, where he is focused on leading the company through a period of growth and expansion by driving new capabilities and innovation. Prior to his current role, he held several operations and business leadership roles at Sysco Corporation, including serving as President, Chief Executive Officer, and Chairman. Before joining Sysco in 2013, Mr. Bené spent over 20 years at PepsiCo in numerous roles of increasing responsibility and scale. Mr. Bené has a proven track record of driving growth and modernizing business models throughout his career. Through his prior operations and management positions, Mr. Bené has gained valuable insight and knowledge in the areas of leadership and management development, corporate strategy development, merchandising, sales, marketing, revenue management, shared services and distribution and supply chain management. Mr. Bené shares his deep experience in logistics, as well as his focus on differentiation through the use of technology and providing outstanding customer service, to further our Company’s growth and optimization strategy. In addition, his dedication to employee development complements the Company’s People First commitment. Mr. Bené holds a bachelor of science degree in business administration from the University of Kansas. | |
20 | 2024 Proxy Statement
2024 Proxy Statement| | ELECTION OF DIRECTORS | |
| | Bruce E. Chinn | | ||||
| | ![[MISSING IMAGE: ph_brucechinn-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_brucechinn-bw.jpg) Age: 67 Director since: February 2023 Board Committee: Audit | | | | Position and Business Experience Retired President and Chief Executive Officer — Chevron Phillips Chemical Company LLC, or CPChem, (global petrochemical joint venture of Chevron USA Inc. and Philips 66 Company), served from April 2021 to March 2024; currently serving as Executive Advisor to CPChem since March 2024. Director of CPChem from November 2020 to March 2024. Also served as President, Chemicals for Chevron Corporation (multinational energy corporation) from May 2020 to March 2021 and President, Chevron Oronite (global lubricant and fuel additives business) for Chevron Corporation from 2018 to April 2020. Qualifications In his recent position as President, Chief Executive Officer and a Director of CPChem, Bruce Chinn focused on leading the company through a period of sustainable growth. Mr. Chinn has over 40 years of experience driving operational, safety, and financial results. Previously, he held several operations and business roles at Chevron Corporation, leading large, diverse organizations. In these roles, Mr. Chinn focused on performance, partnership, and safety, while striving for continued success in the business and community. Mr. Chinn began his career at DuPont, where he held positions of increasing responsibility in manufacturing, technical, commercial and business leadership at the U.S. and international level. Mr. Chinn brings extensive knowledge of circular solutions and renewable energy that is aligned with our Company’s strategic focus on making sustainability growth investments in our recycling and renewable energy businesses. His operations leadership expertise bolsters our continued efforts to drive operating efficiencies, enhance our safety culture and differentiate our service offerings. Mr. Chinn’s broad and expansive dedication to operating excellence and developing strong corporate culture provides valuable perspective to the Board, and his experience allows him to share specific insight into focus areas such as renewable energy transition, environmental regulation and compliance, international exposure and risk management. Mr. Chinn serves on the American Institute of Chemical Engineers Foundation Board of Trustees, and he serves as a board director and executive committee member of the Alliance to End Plastic Waste and the American Chemistry Council. Mr. Chinn holds a bachelor of science degree in chemical engineering from Texas A&M University. | |
2024 Proxy Statement | 21| | ELECTION OF DIRECTORS | |
| | James C. Fish, Jr. | | ||||
| | ![[MISSING IMAGE: ph_jamescfishjr-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_jamescfishjr-bw.jpg) Age: 61 Director since: November 2016 | | | | Position and Business Experience President, Chief Executive Officer and Director — Waste Management, Inc. since 2016. Director of Caterpillar Inc. since March 2023. Qualifications Jim Fish has served as our President and Chief Executive Officer and a Director since 2016. Over more than 20 years, Mr. Fish has held several key positions in our Company, including President and Chief Financial Officer; Senior Vice President — Eastern Group; Area Vice President for Pennsylvania and West Virginia; Market Area General Manager for Massachusetts and Rhode Island; Vice President of Price Management; and Director of Financial Planning and Analysis. Before joining our Company, Mr. Fish held finance and revenue management positions at Westex, a Yellow-Roadway subsidiary, Trans World Airlines, and America West Airlines. He began his professional career at KPMG Peat Marwick. Mr. Fish’s extensive leadership and operational experience, together with his tremendous understanding of the environmental services industry, are instrumental to the development and successful execution of our growth strategy to deliver stockholder value. Additionally, through his professional and educational experience, Mr. Fish has developed valuable expertise in accounting, external reporting, investor relations, human capital and performance management, and risk management. Mr. Fish oversees our Digital organization, and participates directly in matters related to cybersecurity and information security risk mitigation and response strategies. As North America’s largest comprehensive environmental solutions provider, sustainability is embedded in all aspects of our business. As our President and Chief Executive Officer, Mr. Fish has a thorough understanding of the risks and opportunities presented in the areas of sustainability and environmental protection. Mr. Fish is deeply involved in our efforts to mitigate such risks and capitalize on such opportunities in order to deliver on our brand promise, ALWAYS WORKING FOR A SUSTAINABLE TOMORROW®. Mr. Fish also champions the importance of our people-first commitment and the necessity of creating a culture that truly puts the needs of WM employees first. As part of that people-first culture, Mr. Fish has been actively involved in developing initiatives to promote inclusion and diversity throughout the Company’s population of approximately 48,000 employees. Mr. Fish earned a bachelor’s degree in accounting from Arizona State University and a master’s degree in business administration, with emphasis on finance, from the University of Chicago. He is also a Certified Public Accountant. | |
22 | 2024 Proxy Statement
2024 Proxy Statement| | ELECTION OF DIRECTORS | |
| | Andrés R. Gluski | | ||||
| | ![[MISSING IMAGE: ph_andresrgluski-bwlr.jpg]](/files/PRE 14A/0001104659-24-033311/ph_andresrgluski-bwlr.jpg) Age: 66 Director since: January 2015 Board Committees: Audit and Management Development & Compensation (Chair) | | | | Position and Business Experience President, Chief Executive Officer and Director — The AES Corporation (global energy company) since Director of AES Gener (Chile) from 2005 to January 2020. Qualifications Prior to joining AES, Mr. Gluski served in a broad range of roles in the public and private sectors, including working as Executive Vice President of Corporate and Investment Banking in Grupo Santander. Mr. Gluski served as a member of the President’s Export Council from 2013 to 2016 and served as an expert witness at U.S. Congressional hearings on the Mr. Gluski has also focused on shaping an inclusive, innovative workplace at AES with a diverse and inclusive culture throughout the world. These efforts have given Mr. Gluski valuable expertise in the areas of human capital management and diversity, equity and inclusion that he utilizes in his role as Chair of the Management Development & Compensation Committee of the Board. Mr. Gluski has been The depth and Mr. Gluski holds a bachelor’s degree from | |
2024 Proxy Statement | 23| | ELECTION OF DIRECTORS | |
| | Victoria M. Holt | | ||||
| | ![[MISSING IMAGE: ph_vickiblue-bwlr.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_vickiblue-bwlr.jpg) ![[MISSING IMAGE: ph_victoriamholt-bwlr.jpg]](/files/PRE 14A/0001104659-24-033311/ph_victoriamholt-bwlr.jpg) Age: Director since: January 2013 Board Committees: Audit and Nominating & Governance (Chair) | | | | Position and Business Experience Retired President and Chief Executive Officer — Proto Labs, Inc. (online and technology-enabled quick-turn manufacturer), served from 2014 to March 2021; also served as Director from 2014 — May 2021. Director of Piper Sandler Companies since September 2019. Director of A. O. Smith Corp. since April 2021. Qualifications Victoria Holt joined Proto Labs, Inc. as President, Chief Executive Officer and a Director in 2014, retiring in 2021. With manufacturing facilities in five countries, Proto Labs is a leading e-commerce technology enabled digital manufacturer of custom prototypes and on-demand product parts. Ms. Holt began her career at Monsanto Company, where she held various assignments of increasing responsibility before moving to Solutia, Inc., a divestiture of the Monsanto Company’s chemical business, as Vice President and General Manager Performance Films. Ms. Holt later held various roles with PPG Industries, Inc., a leading coatings and specialty products company, including Senior Vice President of Glass and Fiber Glass. Ms. Holt then served as President and Chief Executive Officer of Spartech Corporation, a leading provider of plastic sheet, compounds and packaging products, until its sale to PolyOne in 2013. Ms. Holt has Ms. Holt has developed expertise in corporate governance as a member of the public company boards listed above, in addition to experience serving on private company boards, and she shares this expertise with the Company’s Board in her position as Chair of the Nominating and Governance Committee. She also Ms. Holt holds a bachelor’s degree in chemistry from Duke University and a master’s degree in business administration from Pace University. Ms. Holt has completed the National Association of Corporate Directors (NACD) Cyber Risk Oversight Program and earned the CERT Certificate in Cybersecurity Oversight. | |
2024 Proxy Statement| | ELECTION OF DIRECTORS | |
| | Kathleen M. Mazzarella | | ||||
| | ![[MISSING IMAGE: ph_kathleenmazzarella-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_kathleenmazzarella-bw.jpg) ![[MISSING IMAGE: ph_kathleenmmazzarella-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_kathleenmmazzarella-bw.jpg) Age: Director since: October 2015 Chair of the Board since: May 2023 Board Committees: Audit, Management Development & Compensation and Nominating & Governance | | | | Position and Business Experience Chairman, President and Chief Executive Officer — Graybar Electric Company, Inc. (distributor of electrical, communications and data networking products and provider of related supply chain management and logistics services) since Director of Cigna Corporation since Director of Express Scripts Holding Company from Director of Core & Main since January 2019. Qualifications Ms. Mazzarella has been instrumental in developing and communicating Graybar’s commitment to sustainability initiatives. Graybar focuses on sustainability in the way it operates and in the innovative solutions it provides to its customers. The company offers energy-saving products, renewable energy solutions and supply chain services that support sustainable construction, renovation and maintenance of infrastructure and facilities. The company also invests in the communities it serves and emphasizes integrity, inclusion and opportunity for all employees. Ms. Mazzarella brings her deep and valuable experience leading Ms. Mazzarella holds an In addition to the public company boards listed above, Ms. Mazzarella also serves on the board of the National Association of Wholesaler-Distributors (NAW) and previously served on the board of the NAW Institute for Distribution Excellence. Ms. Mazzarella previously served as Chairman of the Federal Reserve Bank of St. Louis, and she has experience serving on | |
2024 Proxy Statement | 25| | ELECTION OF DIRECTORS | |
| | Sean E. Menke | | ||||
| | ![[MISSING IMAGE: ph_seanmenke-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_seanmenke-bw.jpg) ![[MISSING IMAGE: ph_seanemenke-bwlr.jpg]](/files/PRE 14A/0001104659-24-033311/ph_seanemenke-bwlr.jpg) Age: Director since: March 2021 Board Committees: Audit and Nominating & Governance | | | | Position and Business Experience Director of Sabre Corporation since 2016. Also served as Chief Executive Officer of Sabre Corporation from 2016 to April 2023 and as President of Sabre Corporation from 2016 to December 2021. Qualifications As Chair of the Board of Directors of Sabre Corporation and recent Chief Executive Officer, Sean Menke has experience heading a global network of development, sales, operations and corporate functions. In 2015, Mr. Menke joined Sabre as president of Sabre Travel Network, Sabre’s largest line of business. Under Mr. Menke’s leadership, Sabre won major new business opportunities, increased global market share, secured Sabre’s position as the leading global distribution system in North America, Latin America and Asia-Pacific, and led innovation to enable sales of more customized fares and ancillary products that help drive the changing travel industry landscape. Before joining Sabre, Mr. Menke spent more than 20 years in executive leadership roles in the airline industry. He served as Chief Executive Officer at Frontier Airlines and at Pinnacle Airlines, and he held senior level marketing, operations, customer experience, strategy, planning, sales, distribution and revenue management roles, including with Air Canada and Hawaiian Airlines. He also served as Executive Vice President at IHS Inc., a global information technology company. Mr. Menke is a proven transformation leader, Mr. Menke Mr. Menke holds a | |
2024 Proxy Statement| | ELECTION OF DIRECTORS | |
| | William B. Plummer | | ||||
| | ![[MISSING IMAGE: ph_williamplummer-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_williamplummer-bw.jpg) ![[MISSING IMAGE: ph_williambplummer-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_williambplummer-bw.jpg) Age: Director since: August 2019 Board Committees: Audit (Chair) and Management Development & Compensation | | | | Position and Business Experience Retired Executive Vice President and Chief Financial Officer — United Rentals, Inc. (world’s largest equipment rental company), served from 2008 to Director of Global Payments Inc. since Director of Mason Industrial Technology, Inc. Director of Nesco Holdings, Inc. from July 2019 to March 2021. Director of John Wiley & Sons, Inc. from 2003 to September 2019. Qualifications Mr. Plummer brought more than two decades of financial leadership experience when he joined United Rentals, having served in a several executive roles, including as Executive Vice President and Chief Financial Officer of Dow Jones & Company, Inc., where he set policy for its global finance and corporate Mr. Plummer brings extensive accounting, audit, internal control, and risk management experience to the Board and as Mr. Plummer holds bachelor’s and master’s degrees in aeronautics and astronautics from Massachusetts Institute of Technology and a master’s degree in business administration from Stanford University. | |
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2024 Proxy Statement| 27| | ELECTION OF DIRECTORS | |
| | Maryrose T. Sylvester | | ||||
| | ![[MISSING IMAGE: ph_maryrosesylvester-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-22-039107/ph_maryrosesylvester-bw.jpg) ![[MISSING IMAGE: ph_maryrosetsylvester-bw.jpg]](/files/PRE 14A/0001104659-24-033311/ph_maryrosetsylvester-bw.jpg) Age: Director since: March 2021 Board Committees: Management Development & Compensation and Nominating & Governance | | | | Position and Business Experience Retired U.S. Managing Director and U.S. Head of Electrification — ABB Ltd. (global technology company focused on electrification, robotics, power and automation), served from August 2019 to August 2020. Former President and Chief Executive Officer — Current, powered by GE (energy services and information technology subsidiary of General Electric subsequently acquired by private equity investors), served from 2015 to June Director of Harley-Davidson, Inc. since Director of Vontier Corporation since March 2021. Director of Flex Ltd. since September 2022. Qualifications As U.S. Managing Director and U.S. Head of Electrification for ABB Ltd., Maryrose Sylvester was responsible for ABB’s largest geographical market and the implementation of operational innovations. Ms. Sylvester also championed the company’s diversity and inclusion efforts and accelerated ABB’s Encompass Diversity program. Prior to joining ABB Ltd., Ms. Sylvester spent more than 30 years at General Electric, where she held a number of leadership roles, including serving as President and Chief Executive Officer of each of GE Lighting, GE Intelligent Platforms, which focused on industrial automation, and GE Current, a digital power service business that delivers integrated energy systems. Ms. Sylvester was instrumental in launching the GE Women’s Network. Ms. Sylvester is a strategic, growth-oriented leader | |
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2024 Proxy StatementDIRECTOR AND OFFICER STOCK OWNERSHIP
Our Board of Directors has adopted stock ownership guidelines for our non-employee directors based on the recommendation of the MD&C Committee, as described in the Non-Employee Director Compensation discussion. Our executive officers, including Mr. Fish, are also subject to stock ownership guidelines, as described in the Compensation Discussion and Analysis.
The Security Ownership of Management table below shows the number of shares of Common Stock each director and each executive officer named in the Summary Compensation Table beneficially owned as of March 15, 2022, our record date for the Annual Meeting,5, 2024, as well as the number owned by all directors and executive officers as a group. These individuals, both individually and in the aggregate, own less than 1% of our outstanding shares as of the record date.
SECURITY OWNERSHIP OF MANAGEMENT
| | Name | | Shares of Common Stock Owned(1) | | Shares of Common Stock Covered by Exercisable Options(2) | | Name | | Shares of Common Stock Owned(1) | | Shares of Common Stock Covered by Exercisable Options(2) | | ||||||||||||||||
| | Andrés R. Gluski | | | | 13,759 | | | | | — | | | Thomas L. Bené | | | | 579 | | | | | — | | | ||||
| | Victoria M. Holt | | | | 19,257 | | | | | — | | | Bruce E. Chinn(3) | | | | 1,321 | | | | | — | | | ||||
| | Kathleen M. Mazzarella(3) | | | | 11,671 | | | | | — | | | Andrés R. Gluski | | | | 15,975 | | | | | — | | | ||||
| | Sean E. Menke | | | | 1,551 | | | | | — | | | Victoria M. Holt(4) | | | | 21,473 | | | | | — | | | ||||
| | William B. Plummer | | | | 3,776 | | | | | — | | | Kathleen M. Mazzarella(5) | | | | 14,574 | | | | | — | | | ||||
| | John C. Pope | | | | 55,065 | | | | | — | | | Sean E. Menke | | | | 3,767 | | | | | — | | | ||||
| | Maryrose T. Sylvester | | | | 1,551 | | | | | — | | | William B. Plummer(6) | | | | 5,992 | | | | | — | | | ||||
| | Thomas H. Weidemeyer(4) | | | | 35,324 | | | | | — | | | John C. Pope | | | | 56,461 | | | | | — | | | ||||
| | James C. Fish, Jr.(5) | | | | 245,226 | | | | | 140,703 | | | Maryrose T. Sylvester | | | | 3,767 | | | | | — | | | ||||
| | Devina A. Rankin | | | | 49,428 | | | | | 37,125 | | | James C. Fish, Jr.(7) | | | | 298,540 | | | | | 63,930 | | | ||||
| | John J. Morris, Jr. | | | | 107,552 | | | | | 49,801 | | | Devina A. Rankin | | | | 59,170 | | | | | 65,398 | | | ||||
| | Charles C. Boettcher | | | | 31,680 | | | | | 34,518 | | | John J. Morris, Jr. | | | | 90,205 | | | | | 32,503 | | | ||||
| | Tara J. Hemmer | | | | 37,517 | | | | | 44,005 | | | Rafael E. Carrasco | | | | 11,006 | | | | | 20,883 | | | ||||
| | All directors and executive officers as a group (19 persons)(6) | | | | 738,854 | | | | | 468,586 | | | Tara J. Hemmer | | | | 50,489 | | | | | 52,800 | | | ||||
| | All directors and executive officers as a group (21 persons)(8) | | | | 740,508 | | | | | 383,475 | | | ||||||||||||||||
(1)
The table reports beneficial ownership in accordance with Rule 13d-3 under the Exchange Act. The amounts reported above include 4,0814,218 stock equivalents attributed to Mr. Fish and 2,2952,372 stock equivalents attributed to Mr. Morris, based on their holdings in the Company’s 401(k) Retirement Savings Plan stock fund. The amounts reported above also include 94,844 shares of Common Stock deferred by Mr. Fish. Deferred shares were earned on account of vested equity awards and pay out in shares of Common Stock after the executive’s departure from the Company pursuant to the Company’s 409A Deferral Savings Plan (“409A Deferral Plan”).
Executive officers may choose a Waste Management stock fund as an investment option for deferred cash compensation under the Company’s 409A Deferral Plan. Interests in the fund are considered phantom stock because they are equal in value to shares of our Common Stock, but these amounts are not invested in stock or funds. Phantom stock is not included in the table above, but it represents an investment risk based on the performance of our Common Stock. Mr. Morris has 2,4912,575 phantom stock equivalents under the 409A Deferral Plan.
(2)
Includes the number of options currently exercisable and options that will become exercisable within 60 days of ourthe record date.
(3)
Shares are held by the Chinn Family Trust, for which Mr. Chinn and his wife serve as trustees.
(4)
Shares are held by the Victoria M. Holt Trust, for which Ms. Holt and her husband serve as trustees.
(5)
Shares are held by the Mazzarella Living Trust, for which Ms. Mazzarella and her husband serve as trustees.
(6)
2024 Proxy Statement | 29(7)
Includes 95,57795,977 shares held in trusts for the benefit of Mr. Fish’s minor children.
(8)
Included in the “All directors and executive officers as a group” are 10,94913,718 stock equivalents attributable to the
executive officers’ collective holdings in the Company’s 401(k) Retirement Savings Plan stock fund. This group also holds an aggregate of 8,729 phantom stock equivalents under the 409A Deferral Plan that are not included in the table.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The table below shows information for persons known to us to beneficially own more than 5% of our Common Stock based on their filings with the SEC through March 15, 2022.11, 2024.
| | | | | Shares Beneficially Owned | | |||||||||
| | Name and Address | | | Number | | | Percent(1) | | ||||||
| | 100 Vanguard Boulevard Malvern, PA 19355 | | | | | | | | | | | | ||
| | 500 Fifth Avenue North Seattle, WA 98109 Bill & Melinda Gates Foundation Trust 2365 Carillon Point Kirkland, WA 98033 | | | | | | | | | | | | ||
| | BlackRock, Inc. 1000150 Hudson Yards New York, NY | | | | | | | | | | | | ||
(1)
Percentage is calculated using the number ofbased on 401,598,077 shares of Common Stock outstanding and entitled to vote as of March 15, 2022.February 8, 2024, as reported on the cover of the most recent Annual Report on Form 10-K.
(2)
This information is based on a Schedule 13G/A filed with the SEC on February 9, 2022.13, 2024. The Vanguard Group reports that it has shared voting power over 641,208521,224 shares of Common Stock, shared dispositive power over 1,612,9711,655,291 shares of Common Stock and sole dispositive power over 33,367,69534,504,565 shares of Common Stock beneficially owned.
(3)
This information is based on a Schedule 13G/A filed with the SEC on February 1, 2022.10, 2023, which is the most recent Schedule 13G filed by the investor with respect to ownership of our Common Stock. Ms. Gates, Mr. Gates and the Bill & Melinda Gates Foundation Trust each report shared voting and dispositive power over 35,234,344 shares of Common Stock beneficially owned. Ms. Gates also reports sole voting and dispositive power of 3,810 additional shares of Common Stock beneficially owned.
(4)
This information is based on a Schedule 13G/A filed with the SEC on January 26, 2024. BlackRock, Inc. reports that it has sole voting power over 25,700,24825,826,390 shares of Common Stock and sole dispositive power over 29,941,759 28,665,838
shares of Common Stock beneficially owned.
DELINQUENT SECTION 16(A) REPORTS
The federal securities laws require our executive officers and directors to file reports of their holdings and transactions in our Common Stock with the SEC. Based on a review of the forms and written representations from our executive officers and directors, we are aware of one delinquent report for 2021. On December 14, 2021,report. In April 2023, Ms. Nagy receivedlearned that her investment adviser executed unauthorized purchases of our Common Stock totaling 13 shares in her individual retirement account. The purchases occurred in 2022 when Ms. Nagy was serving as Vice President and Chief Accounting Officer, although she transitioned to a grant of restricted stock units that will vestnew role with the Company in full on the third anniversaryMarch 2023 and is no longer serving as an executive officer. Due to Ms. Nagy not being aware of the date of grant. Due to an administrative error, this grant waspurchases, the transactions were not timely reported on a Form 4 at the time, but upon discovery waswere reported on a Form 54 in January 2022.April 2023.
2024 Proxy StatementEXECUTIVE OFFICERS
The following is a listing of our current executive officers, their ages and their business experience for the past five years (other than Mr. Fish, whose age, experience and qualifications are included in the director nominees section of this Proxy Statement). Unless otherwise specified, all prior positions listed below were with our Company.
| | Name | | | Age | | | Positions Held and Business Experience for Past Five Years | |
| | | | | | • | |||
Executive Vice President, Corporate Development and Chief Legal Officer since February 2020. • Senior Vice President, Corporate Development and Chief Legal Officer from May 2019 to February 2020. • Senior Vice President and Chief Legal Officer from | | |||||||
| | Rafael E. Carrasco | | | | | • Senior Vice President — Enterprise Strategy since September 2023. • Senior Vice President — Operations • Area Vice President — Greater Mid-Atlantic Area from | | |
| | | | | | • Vice President and Chief Accounting Officer since March 2023. • Vice President, Internal Audit and Controls from 2018 to March 2023. | | ||
| | Christopher P. DeSantis | | | 60 | | | • Senior Vice President — Operations since October 2023 • Area Vice President — New England from 2009 to October 2023. | |
| | Tara J. Hemmer | | | 51 | | | • Senior Vice President and Chief Sustainability Officer since July 2021. • Senior Vice President — Operations from January 2019 to June 2021. | |
| | John J. Morris, Jr. | | | | | • Executive Vice President and Chief Operating Officer since January 2019. | | |
| | | | | | • | |||
Executive Vice President and Chief Financial Officer since February 2020. • Senior Vice President and Chief Financial Officer from | | |||||||
| | | | | | • Senior Vice President and Chief • Senior Vice President and Chief People Officer from August 2022 to February 2023. • Vice President — • Area General Manager from July 2020 to September 2021. • Area Director Collection Operations from April 2019 to July 2020. • Regional Manager, Advanced Disposal Services, Inc. (a waste and environmental services company acquired by our Company in 2020), from 2015 to April 2019. | | ||
| | | | | | • Senior Vice President — Operations since January 2023. • Area Vice President — Texas & Oklahoma Area from 2012 to December 2022. | | ||
| | Johnson Varkey | | | 52 | | | • Senior Vice President and Chief Information Officer since January 2024. • Vice President and Chief Information Officer from March 2023 to December 2023. • Vice President — Enterprise Digital Services from September 2019 to March 2023. • Senior Vice President and Chief Information Officer, Centrica (an international energy and services company) from March 2019 to August 2019. | |
| | Michael J. Watson | | | 54 | | | • Senior Vice President and Chief Customer Officer since | |
2024 Proxy Statement| 31EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
Introduction
The Company’s Compensation Discussion and Analysis provides information about the Company’s executive compensation philosophy and the components of its compensation programs. This includes information about how compensation of the Company’s named executive officers for the fiscal year ended December 31, 20212023 aligned with the Company’s 20212023 financial goals and performance. The Compensation Discussion and Analysis helps readers better understand the information found in the Summary Compensation Table and other accompanying tables included in this Proxy Statement.
This Compensation Discussion and Analysis focuses on our executive pay program as it relates to the following executive officers during 2021,2023, whom we refer to as the “named executive officers” or “named executives”:
•
Mr. James C. Fish, Jr. — President and Chief Executive Officer since November 2016.
•
Ms. Devina A. Rankin — Executive Vice President and Chief Financial Officer since February 2020.
•
Mr. John J. Morris, Jr. — Executive Vice President and Chief Operating Officer since January 2019.
•
Mr. Charles C. BoettcherRafael E. Carrasco — ExecutiveSenior Vice President Corporate Development and Chief Legal Officer— Operations from July 2021 to September 2023; Senior Vice President — Enterprise Strategy since February 2020.September 2023.
•
Ms. Tara J. Hemmer — Senior Vice President and Chief Sustainability Officer since July 2021; Senior Vice President — Operations from January 2019 to June 2021.
For additional information about the named executives’ background and prior experience with the Company, see “Executive Officers” above.
Executive Summary
The objective of our executive compensation program is to attract, retain, reward and incentivize talented employees who will lead the Company in the successful execution of our strategy. The Company seeks to accomplish this goal by designing a compensation program that is supportive of and aligns with the strategy of the Company and the creation of stockholder value, while discouraging excessive risk-taking.
We have enabled a people-first, technology-led focus to drivedeliver on our mission, that we are always working for a sustainable tomorrow.brand promise, ALWAYS WORKING FOR A SUSTAINAIBLE TOMORROW®. Our strategy leverages and sustains the strongest asset network in the industry to drive best in class customer experience and growth. As North America’s leading provider of comprehensive waste management environmental services, sustainability and environmental stewardship isare embedded in all that we do. As a result, we believe that positive financial results, including the results for the performance measures on which our executives are compensated, are naturally aligned with the successful execution of our goals to put our people first and position them to serve and care for our customers, the environment, the communities in which we work and our stockholders. On the other hand, weWe believe our Company would not be successful, on financial performance measures or otherwise, without our industry-leading focus on sustainability.
The following key structural elements and policies further the objective of our executive compensation program:
•
a substantial majority of executive compensation is linked to Company performance, through annual cash incentive performance criteria and long-term equity-based incentive awards. As a result, our executive compensation program provides for notably higher total compensation in periods of above-target Company performance, as we saw with respect to equity awards with a three-year performance period ended 20212023 and the 20212023 annual cash incentive award;
•
at target, 72%73% of total compensation of our President and Chief Executive Officer was tied to long-term equity awards, and approximately 60%61% of total compensation of our other named executives, on average, was tied to long-term equity awards, which aligns executives’ interests with those of stockholders;
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•
our total direct compensation opportunities for named executive officers are targeted to fall in a range around the competitive median;
•
performance-based awards include threshold, target and maximum payouts correlating to a range of performance outcomes and are based on a variety of indicators of performance, which limits risk-taking behavior;
•
performance stock units with a three-year performance period, as well as stock options that vest over a three-year period, link executives’ interests with long-term performance and reduce incentives to maximize performance in any one year;
•
all of our executive officers are subject to stock ownership guidelines, which we believe demonstrates a commitment to, and confidence in, the Company’s long-term prospects;
•
in addition to adoption of the executive compensation clawback policy mandated by the New York Stock Exchange in 2023, the Company has clawback provisions in its equity award agreements and executive officer employment agreements, and has adopted a clawback policy applicable to annual incentive compensation, designed to recoup compensation when cause and/or misconduct are found;
•
our executive officer severance policy implemented a limitation on the amount of benefits the Company may provide to its executive officers under severance agreements (the “Severance Limitation Policy”); and
•
the Company has adopted a policy that prohibits it from entering into agreements with executive officers that provide for certain death benefits or tax gross-up payments.
During 2021,2023, we deliveredcontinued to focus on our priorities to advance our strategy — enhancing employee engagement, permanently reducing our cost to serve through the use of technology and automation, and investing in growth through our recycling and renewable energy businesses. This strategic focus, combined with strong operational execution, resulted in increased revenue, income from operations and income from operations asmargin. We remain diligent in offering a competitive and differentiated service that meets the needs of our customers, and we continued to recover from COVID-19 pandemic impacts. We experienced improved yieldare focused on driving operating efficiencies and volume in our landfill, commercial and industrial collection businesses and benefited from our October 2020 acquisition and successful integration of Advanced Disposal Services, Inc. (“ADS”). However, our income from operations was impacted by constraints on labor availability, inflationary cost pressures and commodity-driven business impacts, particularly from recycling brokerage rebates and higher fuel prices.reducing discretionary spend. We continue to invest in our people through market wage adjustments, investments in our digital platform and training for newour team members. In addition, we were focused on executing onWe also continue to make investments in automation and optimization to enhance our disciplined pricing programsoperational efficiency and improve labor productivity for all lines of business. The Company allocated $2.438 billion of available cash to drive margin growthour shareholders during 2023 through dividends and Common Stock repurchases. During 2023, the Company allocated $2.895 billion of available cash to capital expenditures. The increase in the facecapital spending continues to be driven in large part by our acceleration of these additional labor costinvestments in our recycling and inflationary pressures. renewable energy businesses.
Following is a summary of the 20212023 compensation program results:
Total Shareholder Return
With respect to the half of the performance share units (“PSUs”) granted in 20192021 with a three-year performance period ended December 31, 20212023 that was subject to total shareholder return relative to the S&P 500 (“TSR PSUs”), the performance of the Company’s Common Stock on this measure translated into a percentile rank relative to the S&P 500 of 66.95%77.27%, resulting in a 167.78%maximum 200% payout on these PSUs in shares of Common Stock. This performance directly benefited our stockholders, delivering total shareholder return of 91.96%58.25% over the three-year performance period.
Cash Flow Generation
The Company generated net cash flow from operating activities, less capital expenditures, for purposes of the performance goal associated with the other half of our PSUs (“Cash Flow PSUs”) granted in 2019,2021, of $7.49$7.789 billion, exceeding the target performance level of $7.032 billion and the maximum performance level of $6.875$7.50 billion for the three-year performance period ended December 31, 2021.2023. These results exclude the impact of $1.325 billion of incremental sustainability growth investments in 2022 and 2023, as such capital expenditures were not contemplated at the time this performance measure was established but were subsequently approved by our Board in furtherance of the Company’s strategy. This performance resulted in a maximum 200% payout on these PSUs in shares of Common Stock. The robust
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cash flow generation of our business over the three-year performance period has allowed the Company to fulfill its priorities of investing in the business, funding acquisitions with strong returns, and returning available cash to shareholdersstockholders through dividend growth and Common Stock repurchases.
Annual Cash Incentive Performance Measures
Company performance on annual cash incentive performance measures for named executive officers is set forth below. Due toAdditional information about the definition and calculation of these performance measures is below under “Named Executives’ 2023 Compensation Program and Results — Annual Cash Incentive.” Based on these financial results, each of the named executives receivedearned an annual cash incentive payment for 20212023 equal to 136.8%117.85% of target.
Income from Operations Margin (generally defined as the Company’s income from operations, excluding Depreciation“Restructuring” and Amortization Margin (“Margin performance measure”)“(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net” reported in our Annual Report on Form 10-K, as a percentage of revenue, also excluding the impacts of our recycling brokerage business from both income from operations and revenue) — 27.7%19.30%, yielding a payout of 0%133.46%
Incentive compensation measures presented in this proxy statement are defined differently than corresponding measures reported in the Company’s quarterly earnings press release. See Appendix A for additional information and reconciliations of non-GAAP measures to the most comparable GAAP measures.
Sustainability Modifier to Annual Cash Incentive Awards
Beginning in 2023, the MD&C Committee has incorporated a sustainability modifier into the annual cash incentive program. As a result, annual cash incentive payouts to executive officers for 2023 were eligible to be increased, or decreased, up to 5% depending on achievement calculated using a sustainability scorecard. The 2023 sustainability scorecard contained quantifiable performance measures in the areas of safety; diversity & inclusion (“D&I”); circularity and climate. As discussed further below under “Named Executives’ 2023 Compensation Program and Results — Annual Cash Incentive,” the Company earned sufficient points on the sustainability scorecard to correlate to a 2% increase to the annual cash incentive payment for 2023 otherwise earned.
In 2021,2023, each of the long-term equityexecutive compensation incentive awards continued to demonstrate strong alignment between executive pay and Company performance. The payouts on the PSUs granted in 20192021 correlate with outstanding cash flow generation and total shareholder return over the three-year performance period, and both stockholders and executives were rewarded by theseperiod. Additionally, the above-target results.
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Consideration of Stockholder Advisory Vote
When establishing 20212023 compensation for the named executives, the MD&C Committee noted the results of the 2022 advisory stockholder votesvote on executive compensation, with more than 92.5%90% of shares present and entitled to vote at the annual meeting voting in favor of the Company’s executive compensation every year since the advisory vote on compensation was implemented.compensation. Accordingly, the results of the stockholder advisory vote havedid not causedcause the MD&C Committee to recommendmake any changes to ourexecutive compensation practices.practices for 2023, although the MD&C Committee does consider feedback received by the Company through stockholder engagement throughout the year.
The MD&C Committee continually reviews our compensation program to ensure it is clearly aligned with the business strategy and best supports the accomplishment of our goals. The MD&C Committee also believes that consistency in program design reinforces its efforts to maintain a compensation program that is straightforward, easy to communicate and readily translates into actionable goals. The MD&C Committee’s choice of long-term performance measures and respective weighting has been consistent since 2016, and the MD&C Committee is pleased with the financial results and stockholder value that has been generated. Accordingly, the MD&C Committee has approved keeping the 20222024 long-term incentive program design for stock options and PSUs consistent with prior years. Additionally, in February 2022, the MD&C Committee approved grants of restricted stock units (“RSUs”) to Ms. Rankin, Mr. Morris and Ms. Hemmer in special recognition of leadership and contributions critical to the acquisition of ADS and the subsequent integration and synergy generation (the “ADS Integration Awards”). Mr. Boettcher received a grant of RSUs in connection
As disclosed last year, with the ADS transaction in February 2021, as the MD&C Committee desired to recognize his leadership and contributions critical to the negotiation and consummation of the acquisition in October 2020 (the “ADS Closing Award”), discussed further below.
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The MD&C Committee has approved an annual cash incentive program design by replacing the 2021 income from operations, excluding depreciation and amortization margin performance measure with an income from operations margin performance measure, maintaining its 25% weighting. Additionally, the 2021 total revenue performance measure has been replacedfor 2024 with the previous internal revenuesame performance measures and weighting as the 2023 annual cash incentive program. The MD&C Committee has also approved continued use of a sustainability modifier applicable to this program and has increased the weighting of the sustainability modifier. Annual cash incentive payouts to executive officers for 2024 may be increased, or decreased, up to 10% depending on achievement calculated using the 2024 sustainability scorecard. The 2024 sustainability scorecard contains quantifiable performance measures in the areas of safety; employee engagement; circularity and climate. The MD&C Committee believes that these performance measures align with the Company’s commitments and values, sustainability growth performance measure, also maintaining its 25% weighting.strategy and 2030 goals presented in the Company’s Sustainability Report.
Our Compensation Philosophy for Named Executive Officers
The Company’s compensation philosophy is designed to:
•
Attract and retain exceptional employees through competitive compensation opportunities;
•
Encourage and reward performance through substantial at-risk performance-based compensation, while discouraging excessive risk-taking behavior; and
•
Align our decision makers’ long-term interests with those of our stockholders through emphasis on equity ownership.
Additionally, our compensation philosophy is intended to encourage executives to embrace the Company’s strategy and to lead the Company in setting aspirations that will continue to drive exemplary performance.
With respect to our named executive officers, the MD&C Committee believes that total direct compensation at target should generally be in a range around the competitive median according to the following:
•
Base salaries should be paid within a range of plus or minus 10% around the competitive median, with attention given to individual circumstances, including strategic importance of the named executive’s role, the executive’s experience and individual performance;
•
Target short-term and long-term incentive opportunities should generally be set at the competitive median; and
•
Total direct compensation opportunities should generally be within a range of plus or minus 20% around the competitive median.
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Overview of Elements of Our 20212023 Executive Compensation Program
| | Timing | | | Component | | | Purpose | | | Key Features | |
| | Current | | | Base Salary | | | To attract and retain executives with a competitive level of regular income | | | Adjustments to base salary primarily consider competitive market data and the executive’s tenure, individual performance and responsibilities. | |
| | Short-Term Performance Incentive | | | Annual Cash Incentive | | | To encourage and reward contributions to our annual financial objectives through performance-based compensation subject to challenging, yet attainable, objective and transparent metrics | | | Cash incentives are targeted at a percentage of base salary and range from zero to 200% of target based on the following performance measures: • • Income from Operations • Payouts of cash incentives based on the performance measures above can be increased or decreased by up to 5%, depending on achievement calculated using the sustainability scorecard. The MD&C Committee has discretion to increase or decrease an individual’s cash incentive payment by up to 25% based on individual performance, but such modifier has never been used to increase a payment to a named executive. | |
| | Long-Term Performance Incentives | | | Performance Share Units | | | To encourage and reward building long-term stockholder value through successful strategy execution; To retain executives; and To increase stockholder alignment through executives’ stock ownership | | | Number of shares delivered range from zero to 200% of the initial target grant based on performance over a three-year performance period. Payout on half of each executive’s PSUs granted in Payout on the remaining half of the PSUs granted in PSUs earn dividend equivalents that are paid at the end of the performance period based on the number of shares earned. Recipients can defer the receipt of shares, in which case such shares of Common Stock will be paid out, without interest, at the end of the deferral period. | |
| | | | | Stock Options | | | To support the growth element of the Company’s strategy and encourage and reward stock price appreciation over the long-term; To retain executives; and To increase stockholder alignment through executives’ stock ownership | | | Stock options granted in Stock options have a term of | |
| | | | | Restricted Stock Units (“RSUs”) | | | Used on a limited basis (e.g. promotion, new hire, special recognition) to make awards that encourage and reward long-term performance and increase alignment with stockholders | | | RSUs are not routinely an element of executive compensation, but RSUs typically vest in full three years after the date of grant. Time-based vesting aids retention. Dividend equivalents on RSUs accrue and are paid in cash upon vesting. | |
2024 Proxy Statement || | EXECUTIVE COMPENSATION | |
Deferral Plan. Each of our named executive officers is eligible to participate in our 409A Deferral Plan and may elect to defer receipt of portions of their base salary and cash incentives in excess of the annual compensation threshold established under Section 401(a)(17) of the Internal Revenue Code of 1986, as amended (the “IRC”). We believe that providing a program that allows and encourages planning for retirement is a key factor in our ability to attract and retain talent. Additional details on the 409A Deferral Plan can be found in the Nonqualified Deferred Compensation in 20212023 table and accompanying disclosure.
Perquisites. The Company provides very limited perquisites or personal benefits to executive officers.officers, including cost to the Company for guest participation in corporate events and use of Company aircraft for personal travel. The MD&C Committee permits our President and Chief Executive Officer to use the Company’s aircraft for business and personal travel; provided, however, that personal use of the Company aircraft attributed to him that results in incremental cost to the Company shall not exceed 90 hours during any calendar year without approval from the ChairmanChair of the MD&C Committee. In 2021,2023, our President and Chief Executive Officer had less than 1813 hours of personal use of Company aircraft under this standard. Personal use of the Company’s aircraft by other employees resulting in incremental cost to the Company is permitted with Chief Executive Officer approval, although this does not occur frequently. The value of our named executives’ personal use of the Company’s aircraft is treated as taxable income to the respective executive in accordance with IRS regulations using the Standard Industry Fare Level formula. This is a different amount than we calculate pursuant to the SEC requirement to report the incremental cost to us of their use. See note (4) to the Summary Compensation Table below for additional information about this calculation.
Post-Employment and Change in Control Compensation. The Company provides severance protections that aid in retention of senior leadership by providing the individual with comfort that he or she will be treated fairly in the event of an involuntary termination not for cause. The change in control provisions included in our Executive Severance Protection Plan, our stock option award documentation and, if applicable, employment agreements require a double trigger in order to receive any payment in the event of a change in control situation. Additional details can be found under “— Post Employment and Change in Control Compensation; Clawback Policies” and “Potential Payments Upon Termination or Change in Control.”
How Named Executive Officer Compensation Decisions are Made
The MD&C Committee meets several times each year to perform its responsibilities as delegated by the Board of Directors and as set forth in the MD&C Committee’s charter. These responsibilities include evaluating and approving the Company’s compensation philosophy, policies, plans and programs for our named executive officers. In the performance of its duties, the MD&C Committee regularly reviews the total compensation, including the base salary, target annual cash incentive award opportunities, long-term incentive award opportunities and other benefits, including potential severance payments for each of our named executive officers. At a regularly scheduled meetingmeetings each year, the MD&C Committee reviews our named executives’ total compensation and compares that compensation to the competitive market, as discussed below. In the first quarter of each year, the MD&C Committee meets to determine salary increases, if any, for the named executive officers; verifies the results of the Company’s performance for annual cash incentive and PSU payouts; determines the performance share unit calculations; reviews themeasures and individual annual cash incentive targets for the current year as a percent of base salary for each of the named executive officers; and makes decisions on grantingthe design and grants of long-term equity awards.
Compensation Consultant. The MD&C Committee uses several resources in its analysis of the appropriate compensation for the named executive officers. The MD&C Committee selects and employs an independent consultant to provide advice relating to market and general compensation trends. The MD&C Committee also uses the services of its independent consultant for data gathering and analyses. The MD&C Committee has retained Frederic W. Cook & Co., Inc. (“FW Cook”) as its independent consultant since 2002. The Company makes regular payments to FW Cook for its services around executive compensation, including meeting preparation and attendance, advice, and best practice information, as well as competitive data. Information about such payments is submitted to the ChairmanChair of the MD&C Committee.
In addition to services related to executive compensation, FW Cook also provides the MD&C Committee information and advice with respect to compensation of the non-employee directors. FW Cook has no other business relationships with the Company and receives no other payments from the Company. The MD&C Committee adopted a charter provision requiring that it consider the independence of any compensation consultants it uses for executive compensation matters. The MD&C Committee has considered the independence of FW Cook in light of SEC rules and New York Stock Exchange
38 | 2024 Proxy Statement
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listing standards. In connection with this process, the MD&C Committee has reviewed, among other items, a letter from FW Cook addressing the independence of FW Cook and the members of the consulting team serving the MD&C Committee,
including the following factors: (a) other services provided to us by FW Cook; (b) fees paid by us as a percentage of FW Cook’s total revenue; (c) policies or procedures of FW Cook that are designed to prevent conflicts of interest; (d) any business or personal relationships between the senior advisor of the consulting team with a member of the MD&C Committee; (e) any Company stock owned by the senior advisor or any member of his immediate family and (f) any business or personal relationships between our executive officers and the senior advisor. The MD&C Committee reviewed these considerations and concluded that the work performed by FW Cook and its senior advisor involved in the engagement did not raise any conflict of interest.
Role of our CEO and our PeopleHuman Resources Organization. Our President and Chief Executive Officer contributes to compensation determinations by assessing the performance of the other named executive officers and providing these assessments with recommendations to the MD&C Committee. Personnel within the Company’s People OrganizationHuman Resources organization assist the MD&C Committee by working with the independent consultant to provide information requested by the MD&C Committee and assisting it in designing and administering the Company’s compensation programs.
Peer Company Comparisons. The MD&C Committee uses compensation information of comparison groups of companies to gauge the competitive market, which is relevant for attracting and retaining key talent and for ensuring that the Company’s compensation practices are aligned with prevalent practices. For purposes of establishing the 20212023 executive compensation program, the MD&C Committee considered a competitive analysis of total direct compensation levels and compensation mix for our executive officers during the second half of 2020,2022, using information from:
•
Size-adjusted median compensation data from two general industry surveys in which management annually participates; the 2021 Aon Hewitt 2020 TotalRadford Global Compensation Measurement SurveyExecutive Data (as the 2022 Aon Radford Global Compensation Executive Data was not yet available) and the Willis Towers Watson 20202022 Executive Compensation Database Survey. The 20202021 Aon Hewitt TotalRadford Global Compensation Measurement SurveyExecutive Data included 4121,109 organizations ranging in size from approximately $30less than $10 million to $525$560 billion in annual revenue, and the 20202022 Willis Towers Watson Executive Compensation Database Survey included 841797 organizations ranging in size from approximately $50$20 million to $265$575 billion in annual revenue. Data selected from these surveys is scoped based on Company revenue; and
•
Median compensation data from a comparison group of 1820 publicly traded U.S. companies, described below.
The comparison group of companies is initially recommended by the independent consultant prior to the data gathering process, with input from management and the MD&C Committee. The composition of the group is evaluated, and a final comparison group of companies is approved by the MD&C Committee each year. The selection process for the comparison group begins with all companies in the Standard & Poor’s North American database that are publicly traded U.S. companies in 15 different Global Industry Classifications. These industry classifications are meant to provide a collection of companies in industries that share similar characteristics with us. The companies are then limited to those with at least $5 billion in annual revenue to ensure appropriate comparisons, and further narrowed by choosing those with asset intensive domestic operations, as well as those focusing on transportation and logistics. Companies with these characteristics are chosen because the MD&C Committee believes that it is appropriate to compare our executives’ compensation with executives that have similar responsibilities and challenges at other companies.
The following chart sets forth various size comparisons to companies in the comparison group; this table is provided to evidence that the Company was appropriately positioned within its peer group for purposes of establishing 2021developing 2023 compensation recommendations during 2020.2022. All financial and market data are taken from Standard & Poor’s Capital IQ, with financial data as of each company’s 20192021 fiscal year end and market capitalization as of December 31, 2019.2021.
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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%. 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 short-term and long-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 20212023 target compensation among base salary, annual cash incentive and annual long-term equity awards for (a) our President and Chief Executive Officer and (b) our other named executives, on average. These charts reflectdepict the MD&C Committee’s 20212023 desired total mix of target compensation for named executives other than our President and CEO, which includes approximately 60% of total compensation derived from long-term equity awards, while long-term equity awards comprised 72% of our President and Chief Executive Officer’s total target compensation. These charts also reflect that approximately 89%a substantial majority of our President and Chief Executive Officer’s total targetexecutive compensation opportunities awarded in 2021 were performance-based. Approximately 80% of the total target compensation established in February 2021 for the other named executives, on average, was comprised ofis linked to Company performance, through annual cash incentive performance criteria and long-term equity awards, all of which are performance-based with the exception of Mr. Boettcher’s ADS Closing Award discussed below.equity-based incentive awards. We consider stock options
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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.
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![[MISSING IMAGE: pc_ceoneo-pn.jpg]](/files/PRE 14A/0001104659-24-033311/pc_ceoneo-pn.jpg)
Internal Pay Equity. The MD&C Committee considers the differentials between compensation of the named executive officers. The MD&C Committee also reviews compensation comparisons between theour President and Chief Executive Officer and the other executive officers, while recognizing the additional responsibilities of theour President and Chief Executive Officer and that such differentials will increase in periods of above-target performance and decrease in times of below-target performance. Based on these considerations, the MD&C Committee concluded that the compensation paid to theour President and Chief Executive Officer is reasonable compared to that of the other executive officers.
Tax and Accounting Matters. Following the revision of Section 162(m) of the IRC in 2017, the Company generally may no longer take a deduction for any compensation paid to any of its named executive officers in excess of $1 million. Section 409A of the IRC (“Code Section 409A”) generally provides that any deferred compensation arrangement that does not meet specific requirements will result in immediate taxation of any amounts deferred to the extent not subject to a substantial risk of forfeiture. In general, to avoid a Code Section 409A violation, amounts deferred may only be paid out on separation from service, disability, death, a specified time or fixed schedule, a change in control or an unforeseen emergency. Furthermore, the election to defer generally must be made in the calendar year prior to performance of services. We intend to structure all of our compensation arrangements, including our 409A Deferral Plan, in a manner that complies with or is exempt from Code Section 409A.
We account for equity-based payments, including stock options, PSUs and RSUs, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Stock Compensation (“ASC Topic 718”). The MD&C Committee takes into consideration the accounting treatment under ASC Topic 718 when determining the form and amount of annual long-term equity incentive awards. However, because our long-term equity incentive awards are based on a target dollar value established prior to grant (described in further detail under “Named Executives’ 20212023 Compensation Program and Results — Long-Term Equity Incentives”), this “value”target dollar value will differ from the grant date fair value of awards calculated pursuant to ASC Topic 718 and reported in the Summary Compensation Table.
Risk Assessment. The MD&C Committee uses the structural elements set forth in the Executive Summary earlier to establish compensation that will provide sufficient incentives for named executive officers to drive results while avoiding unnecessary or excessive risk taking that could harm the long-term value of the Company. During 2021,2023, the MD&C Committee reviewed the Company’s compensation policies and practices and the assessment and analysis of related risk conducted by the independent compensation consultant. Based on this review and analysis, the MD&C Committee and the independent compensation consultant concluded that our compensation policies and practices do not create risks that are reasonably likely to have a material adverse effect on the Company.
Policy on Calculation Adjustments. In 2014, the MD&C Committee adopted a policy on calculation adjustments that affect payouts under annual and long-term incentive awards in order to address the potentially distorting effect of certain items. Such adjustments are intended to align award payments with the underlying performance of the business; avoid volatile, artificial inflation or deflation of awards due to unusual items in either the award year or the previous comparator year; and eliminate counterproductive incentives to pursue short-term gains and protect current incentive opportunities. To ensure the integrity of the adjustments, the policy provides that the MD&C Committee’s approach to adjustments shall generally be consistent with the Company’s approach to reporting adjusted non-GAAP earnings to the investment
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community, except that the MD&C Committee has determined that potential adjustments arising from a single transaction or event generally should be disregarded unless, taken together, they change the calculated award payout by at least five percent.5%. For this reason, actual results reported in this Proxy Statement on financial performance measures may differ from earnings results reported to the investment community. The MD&C Committee retains discretion to evaluate all adjustments, both income and expense, as circumstances warrant; however, the MD&C Committee has agreed that it will not have the ability to use negative discretion with respect to the calculation of cash flow for purposes of the Cash Flow PSUs, in order to avoid variable accounting treatment for those awards.
Base Salary
The MD&C Committee approved increases to the 20212023 base salaries of named executive officers, consistent with our compensation philosophy and driven by competitive market data, internal pay equity considerations and individual performance relative to the executive’s responsibilities and contributions. The table below shows the 20212023 annual base salary established by the MD&C Committee for each of our named executive officers.
| | Named Executive Officer | | 2021 Base Salary | | Named Executive Officer | | 2023 Base Salary | | ||||||||
| | Mr. Fish | | | $ | 1,300,000 | | | Mr. Fish | | | $ | 1,400,000 | | | ||
| | Ms. Rankin | | | $ | 704,247 | | | Ms. Rankin | | | $ | 767,600 | | | ||
| | Mr. Morris | | | $ | 731,854 | | | Mr. Morris | | | $ | 784,000 | | | ||
| | Mr. Boettcher | | | $ | 650,003 | | | Mr. Carrasco | | | $ | 645,200 | | | ||
| | Ms. Hemmer | | | $ | 588,858 | | | Ms. Hemmer | | | $ | 668,700 | | | ||
Annual Cash Incentive
•
Annual cash incentives were dependent on the following performance measures: Operating EBITDA; Income from Operations excluding Depreciation and Amortization; Income from Operations, excluding Depreciation and Amortization Margin and Total Revenue.Internal Revenue Growth.
•
Payouts of cash incentives based on the performance measures could be increased or decreased by up to 5%, depending on achievement calculated using the 2023 sustainability scorecard.
•
Blended results on the performance measures resulted in each of the named executives receivingyielded an annual cash incentive payment for 20212023 equal to 136.8%117.85% of target.target, which was then increased by 2% on account of the sustainability modifier, yielding a final payout of 120.21%.
The MD&C Committee develops financial performance measures for annual cash incentive awards to drive improvements in business operations, as well as support and fund the long-term strategy of the Company. The MD&C Committee has found that the income from operations, excluding depreciation and amortization performanceOperating EBITDA measure encourages balanced focus on growth and profitability. Our incomeIncome from operations, excluding depreciation and amortization, as a percentage of revenue performance measure, referred to as ourOperations Margin performance measure encourages responsible, high margin revenue growth and cost management and reduction. The total revenueInternal Revenue Growth performance measure was implemented to encourage top line growth.supports the Company’s strategic growth and creation of shareholder value. The MD&C Committee believes these financial performance measures collectively, supported and aligned with the strategy of the Company in 2021. With the exception of the results on the Margin performance measure, the MD&C Committee believes these performance measures2023, are reflective of the Company’s overall performance, and are appropriate indicators of our progress toward the Company’s goals. See “2021 Pay-for-Performance”“2023 Compensation Program Results and Company Performance” in the Executive Summary above for further discussion.discussion and definitions of the annual cash incentive performance measures.
When setting threshold, target and maximum performance measure levels each year, the MD&C Committee looks to the Company’s historical results of operations and analyses and forecasts for the coming year. Specifically, the MD&C Committee considers expected revenue based on analyses of pricing and volume trends, as well as operational and general economic factors, and expected costs.macroeconomic conditions, such as the recent inflationary cost pressures. When setting the 2023 performance levels, the MD&C Committee defined the 2023 annual cash incentive awards to exclude the impacts of our recycling brokerage business. While the relatively small and traditionally lower-margin recycling brokerage business is additive to our overall customer value proposition, it can have a distorting effect on results, due in part to commodity price volatility. The table below details the performance measures set by the MD&C Committee for purposes of the named executive officers’ annual cash incentive for 2021.2023.
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| | | | | Threshold Performance (60% Payment) | | Target Performance (100% Payment) | | Maximum Performance (200% Payment) | | | | Threshold Performance (60% Payment) | | Target Performance (100% Payment) | | Maximum Performance (200% Payment) | | |||||
| | Income from Operations, excluding Depreciation and Amortization | | $ 4.550 billion | | $ 4.787 billion | | $ 5.024 billion | | Operating EBITDA | | $5.60 billion | | $5.90 billion | | $6.20 billion | | ||||||
| | Margin | | 28.0% | | 28.3% | | 28.8% | | Income from Operations Margin | | 17.3% | | 18.8% | | 20.3% | | ||||||
| | Total Revenue | | $16.068 billion | | $16.917 billion | | $17.766 billion | | Internal Revenue Growth | | 4.0% | | 5.4% | | 6.8% | | ||||||
The following table sets forth the Company’s performance achieved on each of the annual cash incentive performance measures and the payout earned on account of such performance.
| | Income from Operations, excluding Depreciation and Amortization (weighted 50%) | | Margin (weighted 25%) | | Total Revenue (weighted 25%) | | | Total Payout Earned (as a percentage of Target) | | Operating EBITDA (weighted 50%) | | Income from Operations Margin (weighted 25%) | | Internal Revenue Growth (weighted 25%) | | | Total Payout Earned (as a percentage of Target) | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | Actual | | Payout Earned | | Actual | | Payout Earned | | Actual | | Payout Earned | | Actual | | Payout Earned | | Actual | | Payout Earned | | Actual | | Payout Earned | | |||||||||||||||||||||||||||||||||||||||||||||||||
| | $4.961 billion | | | | 173.5% | | | | | 27.7% | | | | | 0% | | | $17.931 billion | | | | 200% | | | | | 136.8% | | | $5.892 billion | | | | 98.98% | | | | | 19.30% | | | | | 133.46% | | | | | 5.96% | | | | | 139.99% | | | | | 117.85% | | | ||||||||||||
Sustainability Modifier to Annual Cash Incentive Awards. In 2023, the MD&C Committee has discretionincorporated a sustainability modifier into the annual cash incentive program. As a result, annual cash incentive payouts to adjustexecutive officers for 2023 were eligible to be increased, or decreased, up to 5% depending on achievement calculated using the sustainability scorecard. Results achieved on each of the four performance calculations in line with its policymeasures, and corresponding points earned on calculation adjustments. a scale of one-to-five, are reported below. The Company earned 13 total points on the 2023 sustainability scorecard, which correlates to a 2% increase to the annual cash incentive payment for 2023 otherwise earned.
![[MISSING IMAGE: tb_sustain-pn.jpg]](/files/PRE 14A/0001104659-24-033311/tb_sustain-pn.jpg)
The MD&C Committee did not make any adjustments tobelieves that the calculation of 2021 annual cash incentivequantifiable performance measures. For purposes of our annual cash incentive awards, the income from operations, excluding depreciation and amortization performance measure and the Margin performance measure are generally defined to be calculated basedmeasures for 2023, focusing on the areas of safety, D&I, circularity and climate, aligned well with the Company’s reported income from operations, excluding depreciationcommitments and amortization, “Restructuring”values, sustainability growth strategy and “(Gain) Loss from Divestitures, Asset Impairments and Unusual Items, Net” reported2030 goals presented in our the Company’s Sustainability Report.
Annual Report on Form 10-K.
Cash Incentive Payout for 2023.Target annual cash incentives are a specified percentage of the executives’ base salary. The following table shows each named executive’s target percentage of base salary for 20212023 and each named executive’s total annual cash incentive for 20212023 paid in March 2022.2024.
| | Named Executive Officer | | | Target Percentage of Base Salary | | | Annual Cash Incentive For 2021(1) | | ||||||
| | Mr. Fish | | | | | 150 | | | | | $ | 2,656,497 | | |
| | Ms. Rankin | | | | | 100 | | | | | $ | 958,821 | | |
| | Mr. Morris | | | | | 100 | | | | | $ | 996,408 | | |
| | Mr. Boettcher | | | | | 75 | | | | | $ | 663,727 | | |
| | Ms. Hemmer | | | | | 90 | | | | | $ | 721,549 | | |
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| | Named Executive Officer | | | Target Percentage of Base Salary | | | Annual Cash Incentive For 2023(1) | | ||||||
| | Mr. Fish(2) | | | | | 158 | | | | | $ | 2,638,116 | | |
| | Ms. Rankin | | | | | 100 | | | | | $ | 915,228 | | |
| | Mr. Morris | | | | | 110 | | | | | $ | 1,028,241 | | |
| | Mr. Carrasco | | | | | 90 | | | | | $ | 686,538 | | |
| | Ms. Hemmer | | | | | 90 | | | | | $ | 717,576 | | |
(1)
Calculations of annual cash incentive payouts, as a percentage of base salary, were made using the named executive’s actual base salary received in 2021.2023. Such amounts are lower than if calculated using the 20212023 base salaries in the table above due to the timing of when base salary increases take effect.
(2)
In March 2023, the target percentage of base salary for Mr. Fish was increased from 150% to 160%, yielding a 158% target percentage of base salary for the full year of 2023.
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’ 20212023 annual long-term incentive award, 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, consistent with prior years. Half of each named executives’ PSUs granted in 20212023 are Cash Flow PSUs and the remaining half are TSR PSUs. 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 2021,2023, 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 consideration 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.
| | | | Dollar Values of 2023 Long-Term Equity Incentives Set by the Committee (at Target) | | |
| | Mr. Fish | | | $9,750,000 | |
| | Ms. Rankin | | | $2,300,000 | |
| | Mr. Morris | | | $2,700,000 | |
| | Mr. Carrasco | | | $2,000,000 | |
| | Ms. Hemmer | | | $1,800,000 | |
| | Named Executive Officer | | | Dollar Values of 2021 Long-Term Equity Incentives Set by the Committee (at Target) | | |||
| | Mr. Fish | | | | $ | 8,500,000 | | |
| | Ms. Rankin | | | | $ | 2,100,000 | | |
| | Mr. Morris | | | | $ | 2,300,000 | | |
| | Mr. Boettcher(1) | | | | $ | 1,300,000 | | |
| | Ms. Hemmer | | | | $ | 1,700,000 | | |
Overview of Performance Share Units.
•
Named executives were granted new PSUs with a three-year performance period ending December 31, 2023.2025. Half of each named executive’s PSUs granted in 20212023 are Cash Flow PSUs and the remaining half are TSR PSUs.
•
Named executives received a payout of 183.89%200% of the PSUs granted in 20192021 with a three-year performance period ended December 31, 2021.2023. The Company exceeded the maximum level of performance for the Cash Flow PSUs and the Company exceeded the target level of performance for the TSR PSUs.
PSUs Granted in 2021.2023. 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 increase stockholder alignment through stock ownership. PSUs provide an immediate retention benefit 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
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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.
The MD&C Committee determined the number of PSUs that were granted to each of the named executives in 20212023 by taking the targeted dollar amounts established for total long-term equity incentives (set forth in the table above) and multiplying by 80%. Those values were then divided by the average of the high and low market price of our Common Stock over the 30 trading days preceding the grant date to determine the number of PSUs granted. The number of PSUs granted in 20212023 are shown in the table below.
| | Named Executive Officer | | | Number of PSUs | | |||
| | Mr. Fish | | | | | | | |
| Ms. Rankin | | | | | | | ||
| | Mr. Morris | | | | | | | |
| | Mr. | | | | | | | |
| | Ms. Hemmer | | | | | | | |
Half of each named executive’s PSUs included in the table above are Cash Flow PSUs; the cash flow generation performance measure requires focus on capital discipline and strengthens alignment with stockholders’ free cash flow expectations. For purposes of these PSUs, we define cash flow as net cash provided by operating activities, less capital expenditures, with the following adjustments: (a) costs associated with labor disruptions and multiemployer plan withdrawal liabilities are excluded due to being required as a result of past labor commitments combined with changing economic conditions and business climate; (b) strategic acquisition, restructuring, and transformation and reorganization costs are excluded; (c) cash proceeds from strategic divestitures of assets and businesses are excluded; and (d) cash proceeds from divestitures of any other businesses and assets are included (the “2021 Cash“Cash Flow PSU Definition”). The table below shows the required achievement of the cash flow generation performance measure and the corresponding potential payouts under our Cash Flow PSUs granted in 2021.2023.
| | | | | Threshold | | | Target | | | Maximum | | |||||||||||||||||||||||||||
| | | | | Performance | | | Payout | | | Performance | | | Payout | | | Performance | | | Payout | | ||||||||||||||||||
| | Cash Flow | | | | $ | 6.60 billion | | | | | | 50% | | | | | $ | 7.032 billion | | | | | | 100% | | | | | $ | 7.50 billion | | | | | | 200% | | |
| | | | | Threshold | | | Target | | | Maximum | | |||||||||||||||||||||||||||
| | | | | Performance | | | Payout | | | Performance | | | Payout | | | Performance | | | Payout | | ||||||||||||||||||
| | Cash Flow | | | | $ | 6.60 billion | | | | | | 50% | | | | | $ | 7.30 billion | | | | | | 100% | | | | | $ | 8.0 billion | | | | | | 200% | | |
The remaining half of each named executive’s PSUs are TSR PSUs. This measure directly correlates executive compensation with creation of stockholder value. Total shareholder return is calculated as follows: (Common Stock price at end of performance period — Common Stock price at beginning of performance period + dividends during performance period) / Common Stock price at beginning of performance period. The table below shows the required achievement of the total shareholder return performance measure and the corresponding potential payouts under our TSR PSUs granted in 2021.2023.
| | Total Shareholder Return Relative to the S&P 500 | | ||||||
| | Performance | | | Payout | | |||
| | 75th percentile (Maximum) | | | | | 200% | | |
| | 50th percentile (Target) | | | | | 100% | | |
| | 25th percentile (Threshold) | | | | | 50% | | |
The different performance measure levels are determined based on an analysis of historical performance and current projections and trends. The MD&C Committee uses this analysis and consideration of different scenarios related to items that affect the Company’s performance such as yield, volumes and capital to set the performance measures. As with the consideration of targets for the annual cash incentives, when the MD&C Committee established the cash flow targets, the MD&C Committee carefully considered several material factors anticipated to affect the Company in 20212023 and beyond, including general economicmacroeconomic and market conditions and economic indicators for future periods, to align the cash flow targets with the Company’s long-range strategic plan. The 2023 cash flow targets are also reflective of planned increases in capital spending to accelerate our sustainability growth strategy.
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Payout on PSUs for the Performance Period Ended December 31, 20212023. Half of the PSUs granted in 20192021 with the performance period ended December 31, 20212023 were TSR PSUs, and the remaining half of the PSUs granted in 20192021 were Cash Flow PSUs. In line with the MD&C Committee’s policy on calculation adjustments discussed above, no adjustments were made to the performance calculations for these PSUs. With respect to the TSR PSUs with a three-year performance period ended December 31, 2021,2023, the performance of the Company’s Common Stock on this measure translated into a percentile rank relative to the S&P 500 of 66.95%77.27%, resulting in a 167.78%maximum 200% payout in shares of Common Stock that were issued in February 2022.2024.
For purposes of the Cash Flow PSUs with a three-year performance period ended December 31, 2021,2023, the Company generated net cash flow from operating activities, less capital expenditures, of $7.49$7.789 billion, exceeding the target criteria of $7.032 billion and the maximum criteria of $6.875 billion by $615 million;$7.50 billion; this performance level yielded a 200% payout in shares of Common Stock that were issued in February 2022. With respect to these Cash Flow PSUs,2024. This performance was calculated in accordance with the underlying award agreements provide for performance to be measured using the same methodology as the 2021 Cash Flow PSU Definition set forthabove. Additionally, in line with the MD&C Committee’s policy on calculation adjustments discussed above, exceptthe MD&C Committee approved an adjustment to the measurement of performance on the cash flow measure to exclude the impact of $1.325 billion of capital expenditures allocated to strategic investments in recycling and renewable energy that these 2019 awardswere not contemplated at the time the performance measures were established. These strategic investments did not provide for exclusion of cash proceeds from strategic divestitures of assets and businesses. In 2020, the Company received approximately $691 million of after-tax proceedshave a material impact on account of government-required divestitures in connection with our acquisition of ADS. As the Company exceeded maximum performance criteria by $615 million, only approximately $75 millionany of the total $691 million divestiture proceeds discussed above benefited the award payout for the 2019 Cash Flow PSUs. The remainder of such proceeds were in excess of maximumother 2023 executive compensation performance criteria and did not yield any additional award payout.measures.
Stock Options. The MD&C Committee believes use of stock options is appropriate to support the growth element of the Company’s strategy. The grant of options made to the named executive officers in the first quarter of 20212022 in connection with the annual grant of long-term equity awards was based on the targeted dollar amounts established for total long-term equity incentives (set forth in the table above) and multiplied by 20%. The actual number of stock options granted was determined by assigning a value to the options using an option pricing model and dividing the dollar value of target compensation by the value of an option. The resulting number of stock options are shown in the table below.
| | Named Executive Officer | | | Number of Options | | |||
| | Mr. Fish | | | | | | | |
| | Ms. Rankin | | | | | | | |
| | Mr. Morris | | | | | | | |
| | Mr. | | | | | | | |
| | Ms. Hemmer | | | | | | | |
The stock options granted in 20212023 vest ratably in three annual increments, beginning on the first anniversary of the date of grant. The exercise price of the options granted in 20212023 is $110.81,$150.115, which is the average of the high and low market price of our Common Stock on the date of grant, and the options have a term of ten10 years. We account for our employee stock options under the fair value method of accountingASC Topic 718 using a Black-Scholes methodologyvaluation model 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 fully recognized ataccelerated over the time of grant.period that the recipient becomes retirement-eligible.
Restricted Stock Units. The Company did not grant any RSUs to the named executives in 2023. Each of the named executives, other than Mr. Boettcher was the only named executive with unvestedFish, holds outstanding RSUs as of December 31, 2021. Mr. Boettcher received a grant of 4,386 RSUsthat were granted in 2022 in connection with achievement of targeted synergies from the ADS transactionCompany’s 2020 acquisition of Advanced Disposal Services, Inc. Mr. Carrasco also had RSUs vest in February 2021, as the MD&C Committee desired2023, and will have RSUs vest in 2024, that were granted prior to recognize his leadership and contributions criticalpromotion to the negotiation and consummation of the acquisition in October 2020. These ADS Closing Award senior leadership team.
RSUs will vest in full on the third anniversary of the date of grant. Dividends on the RSUs will accrue and be paid in cash upon vesting. The RSUs may not be voted or sold until vested. Unvested RSUs are subject to forfeiture in the event of voluntary or for-cause termination. RSUs will be prorated upon involuntary termination other than for cause, and RSUs immediately vest in the event of an employee’s death or disability.
The MD&C Committee anticipates that grants of RSUs to named executives will continue to be made on a limited basis in cases such as a significant promotion, increased responsibilities, special recognition and to attract new hires, and that RSUs will not be a routine component of named executive compensation. See “2022 Compensation Program Preview” in the Executive Summary above regarding the ADS Integration Awards of RSUs granted to Ms. Rankin, Mr. Morris and Ms. Hemmer in 2022.
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Post-Employment and Change in Control Compensation; Clawback Policies
Severance Protection Plan. In December 2017, we adopted an Executive Severance Protection Plan (the “Severance Protection Plan”) and each of Messrs. Fish and Morris Boettcher and Ms. Rankin entered into new or amended and restated employment agreements (the “2017 Employment Agreements”). The Severance Protection Plan covers each of our executive officers. The 2017 Employment Agreements do not contain separate severance entitlements, but instead provide for additional terms and protections relating to the respective executive’s participation in the Severance Protection Plan. The 2017 Employment Agreements are intendedserved to transition the Company’s severance protections away from contract-based protections and onto a standardized and flexible plan-based approach. Going forward, the Company does not anticipate entering into new employment agreements with our executive officers, and neither Mr. Carrasco nor Ms. Hemmer is nota party to an employment agreement with the Company.
Post-Employment Covenants and Clawback Policies. The 2017 Employment Agreements contain noncompetition and nonsolicitation restrictions that apply during employment and for a two-year period following termination. Additionally, the Severance Protection Plan contains (a) a requirement that the individual execute a general release prior to receiving post-termination benefits and (b) a clawback feature that allows for the suspension and refund of termination benefits for subsequently discovered cause. The clawback feature generally allows the Company to cancel any remaining payments due and obligates the named executive to refund to the Company severance payments already made if, within one year of termination of employment of the named executive by the Company for any reason other than for cause, the Company determines that the named executive could have been terminated for cause.
Our current equity award agreements also include a requirement that, in order to be eligible to vest in any portion of the award, the employee must enter into an agreement containing restrictive covenants applicable to the employee’s behavior following termination. Additionally, our equity award agreements include compensation clawback provisions that provide, if the MD&C Committee determines that an employee either engaged in or benefited from misconduct, then the employee will refund any amounts received under the equity award agreements. Misconduct generally includes any act or failure to act that caused or was intended to cause a violation of the Company’s policies, generally accepted accounting principles or applicable laws and that materially increased the value of the equity award. Further, our MD&C Committee has adopted a clawback policy applicable to our annual cash incentive awards that is designed to recoup annual cash incentive payments when the recipient’s personal misconduct affects the payout calculations for the awards. Clawback terms applicable to our incentive awards allow recovery within the earlier to occur of one year after discovery of misconduct and the second anniversary of the employee’s termination of employment.
In 2023, the MD&C Committee adopted the executive compensation clawback policy mandated by the New York Stock Exchange, which is accessible through the Exhibit List to the Company’s Annual Report on Form 10-K. This clawback policy provides for the recovery of erroneously awarded incentive-based compensation received by current and former executive officers in connection with a financial restatement, regardless of fault or misconduct. No obligation has arisen to recover executive compensation pursuant to this policy.
Other Compensation Policies and Practices
Compensation Limitation Policies. The Company has adopted a Severance Limitation Policy that generally provides that the Company may not enter into severance arrangements with its executive officers as defined in the federal securities laws, that provide for benefits, less the value of vested equity awards and benefits provided to employees generally, in an amount that exceeds 2.99 times the executive officer’s then current base salary and target annual cash incentive, unless such future severance arrangement receives stockholder approval. The Company has also adopted its Policy Limiting Certain Compensation Practices, which generally provides that the Company will not enter into compensation arrangements that would obligate the Company to pay a death benefit or gross-up payment to an executive officer unless such arrangement receives stockholder approval. Both of these compensation limitation policies are subject to certain exceptions, including benefits generally available to management-level employees and any payment in reasonable settlement of a legal claim. Additionally, “Death Benefits” under the policy does not include deferred compensation, retirement benefits or accelerated vesting or continuation of equity-based awards pursuant to generally-applicable equity award plan provisions. None of our executive officers are party to any employment agreement or arrangement with the Company that provides for severance, gross-up or death benefits that exceed amounts permitted by these compensation limitation policies.
2024 Proxy Statement | 47| | EXECUTIVE COMPENSATION | |
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 senior executives to reach their ownership guidelines, 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 guidelines contain holding requirements. Executives with a title of Senior Vice President or higher, which includes all of our named executives, must hold 100% of all net shares acquired through the Company’s long-term incentive plans until the individual’s ownership guideline is achieved. Once achieved, the requisite stock ownership level must continue to be retained throughout the executive’s employment with the Company.
The MD&C Committee regularly reviews the ownership guidelines to ensure that the appropriate share ownership levels are in place. Guidelines are expressed as a multiple of base salary.salary and are calculated annually based on the average closing price of our Common Stock for the 20 trading days preceding April 1. Each named executive’s ownership guideline multiple of base salary and attainmentownership multiple of base salary attained as of March 15, 2022,5, 2024, using the closing price of our Common Stock on such date and base salaries in effect on December 31, 2021,2023, are set forth below. Shares owned outright, vested RSUs and PSUsequity awards that have been deferred, Common Stock equivalents based on holdings in the Company’s 401(k) Retirement Savings Plan and phantom stock held in the Company’s 409A Deferral Plan count toward meeting the ownership guidelines. Stock options, PSUs, RSUs and restricted stock, if any, do not count toward meeting the ownership guidelines until they are vested or earned.
| | | | | Ownership Guideline Multiple of Base Salary | | | Multiple of Base Salary Attained as of March | | ||||||
| | Mr. Fish | | | | | 6x | | | | | | | | |
| | Ms. Rankin | | | | | 3x | | | | | | | | |
| | Mr. Morris | | | | | 3x | | | | | | | | |
| | Mr. | | | | | 3x | | | | | | | | |
| | Ms. Hemmer | | | | | 3x | | | | | | | | |
As discussed under “Director and Officer Stock Ownership,” the MD&C Committee also establishes ownership guidelines for the non-employee directors and performs regular reviews to ensure all non-employee directors are in compliance or are showing sustained progress toward achievement of their ownership guideline.
Insider Trading; Prohibition of Hedging and Pledging Company Securities. The Company’s Insider Trading Policy prohibits directors, executive officers and other “designated insiders” from engaging in most transactions involving the Company’s Common Stock during periods, determined by the Company, that those individuals are most likely to be aware of material, non-public information. Directors, executive officers and other designated insiders subject to stock ownership guidelines must clear all their transactions in our Common Stock with the Company’s office of the Chief Legal Officer in advance. Additionally, it is our policy that directors, executive officers and designated insiders are not permitted to hedge their ownership of Company securities, including (a) trading in options, warrants, puts and calls or similar derivative instruments on any security of the Company,Company; (b) selling any security of the Company “short” and (c) purchasing any financial instruments (including prepaid variable forward contracts, equity swaps, collars and exchange funds) or otherwise engaging in transactions that are designed to or have the effect of offsetting any decrease in the market value of any security of the Company granted as compensation or held, directly or indirectly, by the director, executive officer or designated insider. The Company’s Insider Trading Policy also provides that directors and executive officers may not pledge Company securities or hold Company securities in a margin account.
2024 Proxy Statement| | EXECUTIVE COMPENSATION | |
EXECUTIVE COMPENSATION TABLES
We are required to present compensation information in the tabular format prescribed by the SEC. This format, including the tables’ column headings, may be different from the way we describe or consider elements and components of compensation internally. The Compensation Discussion and Analysis contains a discussion that should be read in conjunction with these tables to gain a complete understanding of our executive compensation philosophy, programs and decisions.
SUMMARY COMPENSATION TABLE
| | Year | | Salary ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Non-Equity Incentive Plan Compensation ($)(3) | | All Other Compensation ($)(4) | | Total ($) | | Year | | Salary ($) | | Stock Awards ($)(1) | | Option Awards ($)(2) | | Non-Equity Incentive Plan Compensation ($)(3) | | All Other Compensation ($)(4) | | Total ($) | | ||||||||||||||||||||||||||||||||||||||||||||||||
| | James C. Fish, Jr. President and Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | James C. Fish, Jr. President and Chief Executive Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | 2021 | | | | 1,294,231(5) | | | | | 7,312,195 | | | | | 1,700,005 | | | | | 2,656,497 | | | | | 94,435 | | | | | 13,057,363 | | | 2023 | | | | 1,388,461(5) | | | | | 8,405,433 | | | | | 1,950,000 | | | | | 2,638,116 | | | | | 246,844 | | | | | 14,628,854 | | | ||||||||||||
| | 2020 | | | | 1,269,231(5) | | | | | 8,110,592 | | | | | 1,600,003 | | | | | 1,277,922 | | | | | 116,177 | | | | | 12,373,925 | | | 2022 | | | | 1,338,462(5) | | | | | 8,023,256 | | | | | 1,750,011 | | | | | 3,459,049 | | | | | 249,906 | | | | | 14,820,684 | | | ||||||||||||
| | 2019 | | | | 1,232,788(5) | | | | | 6,853,530 | | | | | 1,399,997 | | | | | 1,704,132 | | | | | 107,654 | | | | | 11,298,101 | | | 2021 | | | | 1,294,231(5) | | | | | 7,312,195 | | | | | 1,700,005 | | | | | 2,656,497 | | | | | 94,435 | | | | | 13,057,363 | | | ||||||||||||
| | Devina A. Rankin Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Devina A. Rankin Executive Vice President and Chief Financial Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | 2021 | | | | 700,671 | | | | | 1,806,413 | | | | | 420,003 | | | | | 958,821 | | | | | 56,094 | | | | | 3,942,002 | | | 2023 | | | | 760,792 | | | | | 1,982,933 | | | | | 460,005 | | | | | 915,228 | | | | | 95,142 | | | | | 4,214,100 | | | ||||||||||||
| | 2020 | | | | 677,061 | | | | | 2,027,801 | | | | | 399,993 | | | | | 456,597 | | | | | 60,493 | | | | | 3,621,945 | | | 2022 | | | | 730,288 | | | | | 3,008,095 | | | | | 439,988 | | | | | 1,258,404 | | | | | 98,980 | | | | | 5,535,755 | | | ||||||||||||
| | 2019 | | | | 618,208 | | | | | 1,958,118 | | | | | 399,997 | | | | | 578,516 | | | | | 68,575 | | | | | 3,623,414 | | | 2021 | | | | 700,671 | | | | | 1,806,413 | | | | | 420,003 | | | | | 958,821 | | | | | 56,094 | | | | | 3,942,002 | | | ||||||||||||
| | John J. Morris, Jr. Executive Vice President and Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | John J. Morris, Jr. Executive Vice President and Chief Operating Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | 2021 | | | | 728,138 | | | | | 1,978,522 | | | | | 460,006 | | | | | 996,408 | | | | | 67,420 | | | | | 4,230,494 | | | 2023 | | | | 777,031 | | | | | 2,327,562 | | | | | 539,987 | | | | | 1,028,241 | | | | | 144,151 | | | | | 4,816,972 | | | ||||||||||||
| | 2020 | | | | 712,115 | | | | | 2,230,520 | | | | | 440,002 | | | | | 479,777 | | | | | 99,517 | | | | | 3,961,930 | | | 2022 | | | | 748,736 | | | | | 3,870,479 | | | | | 519,995 | | | | | 1,391,871 | | | | | 131,155 | | | | | 6,662,236 | | | ||||||||||||
| | 2019 | | | | 699,807 | | | | | 2,153,907 | | | | | 440,006 | | | | | 661,476 | | | | | 86,046 | | | | | 4,041,242 | | | 2021 | | | | 728,138 | | | | | 1,978,522 | | | | | 460,006 | | | | | 996,408 | | | | | 67,420 | | | | | 4,230,494 | | | ||||||||||||
| | Charles C. Boettcher Executive Vice President — Corporate Development and Chief Legal Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Rafael E. Carrasco Senior Vice President — Enterprise Strategy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | 2021 | | | | 646,702 | | | | | 1,604,233 | | | | | 259,992 | | | | | 663,727 | | | | | 46,927 | | | | | 3,221,581 | | | 2023 | | | | 633,592 | | | | | 1,724,132 | | | | | 400,010 | | | | | 686,538 | | | | | 16,036 | | | | | 3,460,308 | | | ||||||||||||
| | Tara J. Hemmer Senior Vice President and Chief Sustainability Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Tara J. Hemmer Senior Vice President and Chief Sustainability Officer | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | 2021 | | | | 585,868 | | | | | 1,462,439 | | | | | 339,998 | | | | | 721,549 | | | | | 45,601 | | | | | 3,155,455 | | | 2023 | | | | 662,769 | | | | | 1,551,818 | | | | | 360,003 | | | | | 717,576 | | | | | 102,639 | | | | | 3,394,805 | | | ||||||||||||
| | 2020 | | | | 567,062 | | | | | 1,672,967 | | | | | 330,005 | | | | | 347,774 | | | | | 57,125 | | | | | 2,974,933 | | | 2022 | | | | 630,506 | | | | | 2,302,032 | | | | | 339,992 | | | | | 978,476 | | | | | 70,648 | | | | | 4,321,654 | | | ||||||||||||
| | 2019 | | | | 535,670 | | | | | 1,615,372 | | | | | 330,001 | | | | | 479,828 | | | | | 38,502 | | | | | 2,999,373 | | | 2021 | | | | 585,868 | | | | | 1,462,439 | | | | | 339,998 | | | | | 721,549 | | | | | 45,601 | | | | | 3,155,455 | | | ||||||||||||
(1)
Amounts in this column represent the grant date fair value of PSUs granted to all named executives annually and 4,386 ADS Closing Award RSUs granted to Mr. Boettcher in 2021.annually. The grant date fair values were calculated in accordance with ASC Topic 718, as further described in Note 14 in the Notes to the Consolidated Financial Statements in our 20212023 Annual Report on Form 10-K. The grant date fair value of a TSR PSU granted in 2021,2023, based on a multifactor Monte Carlo valuation,model, is $134.36,$177.48, and because total shareholder return is a market condition, projected achievement is embedded in the grant date fair value. The grant date fair value of a Cash Flow PSU granted in 2021, and an ADS Closing Award RSU,2023 is $110.81,$150.115, which is the average of the high and low market price of our Common Stock on the date of the grant, in accordance with our 2014 Stock Incentive Plan. The table below shows (a) the aggregate grant date fair value of Cash Flow PSUs assuming target level of performance is achieved (this is the amount included in the Stock Awards column in the Summary Compensation Table) and (b) the aggregate grant date fair value of the same PSUs assuming the Company will reach the highest level of achievement for this performance measure and maximum payouts will be earned.
2024 Proxy Statement || | EXECUTIVE COMPENSATION | |
| | | | Year | | Aggregate Grant Date Fair Value of Cash Flow PSUs Assuming Target Level of Performance Achieved ($) | | Aggregate Grant Date Fair Value of Cash Flow PSUs Assuming Highest Level of Performance Achieved ($) | | | | Year | | Aggregate Grant Date Fair Value of Cash Flow PSUs Assuming Target Level of Performance Achieved ($) | | Aggregate Grant Date Fair Value of Cash Flow PSUs Assuming Highest Level of Performance Achieved ($) | | ||||||||||||||||||||||||
| | Mr. Fish | | | | 2021 | | | | | 3,304,908 | | | | | 6,609,817 | | | James C. Fish, Jr. | | | | 2023 | | | | | 3,851,651 | | | | | 7,703,302 | | | ||||||
| | | | | | 2020 | | | | | 3,332,328 | | | | | 6,664,656 | | | | | | | 2022 | | | | | 3,468,403 | | | | | 6,936,806 | | | ||||||
| | | | | | 2019 | | | | | 2,914,920 | | | | | 5,829,840 | | | | | | | 2021 | | | | | 3,304,908 | | | | | 6,609,816 | | | ||||||
| | Ms. Rankin | | | | 2021 | | | | | 816,448 | | | | | 1,632,896 | | | Devina A. Rankin | | | | 2023 | | | | | 908,646 | | | | | 1,817,292 | | | ||||||
| | | | | | 2020 | | | | | 833,145 | | | | | 1,666,290 | | | | | | | 2022 | | | | | 871,981 | | | | | 1,743,962 | | | ||||||
| | | | | | 2019 | | | | | 832,820 | | | | | 1,665,640 | | | | | | | 2021 | | | | | 816,448 | | | | | 1,632,896 | | | ||||||
| | Mr. Morris | | | | 2021 | | | | | 894,237 | | | | | 1,788,473 | | | John J. Morris, Jr. | | | | 2023 | | | | | 1,066,567 | | | | | 2,133,134 | | | ||||||
| | | | | | 2020 | | | | | 916,434 | | | | | 1,832,869 | | | | | | | 2022 | | | | | 1,030,615 | | | | | 2,061,230 | | | ||||||
| | | | | | 2019 | | | | | 916,092 | | | | | 1,832,184 | | | | | | | 2021 | | | | | 894,237 | | | | | 1,788,474 | | | ||||||
| | Mr. Boettcher | | | | 2021 | | | | | 505,404 | | | | | 1,010,808 | | | Rafael E. Carrasco | | | | 2023 | | | | | 790,055 | | | | | 1,580,110 | | | ||||||
| | Ms. Hemmer | | | | 2021 | | | | | 660,982 | | | | | 1,321,963 | | | Tara J. Hemmer | | | | 2023 | | | | | 711,095 | | | | | 1,422,190 | | | ||||||
| | | | | | 2020 | | | | | 687,357 | | | | | 1,374,715 | | | | | | | 2022 | | | | | 673,869 | | | | | 1,347,738 | | | ||||||
| | | | | | 2019 | | | | | 687,044 | | | | | 1,374,088 | | | | | | | 2021 | | | | | 660,982 | | | | | 1,321,963 | | | ||||||
(2)
Amounts in this column represent the grant date fair value of stock options granted annually, in accordance with ASC Topic 718. The grant date fair value of the options granted in 2021, estimated2023, calculated using thea Black-Scholes option pricing model, is $17.25$32.82 per option. See Note 14 in the Notes to the Consolidated Financial Statements in our 20212023 Annual Report on Form 10-K for additional information.
(3)
Amounts in this column represent cash incentive awards earned and paid based on the achievement of performance criteria. See “Compensation Discussion and Analysis — Named Executive’s 20212023 Compensation Program and Results — Annual Cash Incentive” for additional information.
(4)
The amounts included in “All Other Compensation” for 20212023 are shown below (in dollars):
| | | | 401(k) Plan Matching Contributions | | 409A Deferral Plan Matching Contributions | | Life Insurance Premiums | | Perquisites and Other Personal Benefits(a) | | | | 401(k) Plan Matching Contributions | | 409A Deferral Plan Matching Contributions | | Life Insurance Premiums | | Perquisites and Other Personal Benefits(a) | | ||||||||||||||||||||||||||||||||
| | Mr. Fish | | | | 13,050 | | | | | 38,731 | | | | | 2,145 | | | | | 40,509 | | | James C. Fish, Jr. | | | | 14,850 | | | | | 191,240 | | | | | 2,467 | | | | | 38,287 | | | ||||||||
| | Ms. Rankin | | | | 13,050 | | | | | 41,788 | | | | | 1,256 | | | | | — | | | Devina A. Rankin | | | | 14,850 | | | | | 78,835 | | | | | 1,457 | | | | | — | | | ||||||||
| | Mr. Morris | | | | 13,050 | | | | | 26,572 | | | | | 1,313 | | | | | 26,485 | | | John J. Morris, Jr. | | | | 14,850 | | | | | 82,751 | | | | | 1,497 | | | | | 45,053 | | | ||||||||
| | Mr. Boettcher | | | | 13,050 | | | | | 32,709 | | | | | 1,168 | | | | | — | | | Rafael E. Carrasco | | | | 14,850 | | | | | — | | | | | 1,186 | | | | | — | | | ||||||||
| | Ms. Hemmer | | | | 13,050 | | | | | 31,492 | | | | | 1,059 | | | | | — | | | Tara J. Hemmer | | | | 14,850 | | | | | 59,006 | | | | | 1,280 | | | | | 27,503 | | | ||||||||
(a)
This column consists ofincludes perquisites and personal benefits received by a named executive officer in 2023, to the extent that the total incremental cost to usof such perquisites and personal benefits was at least $10,000, consisting of (i) incremental cost for personal use of Company aircraft.aircraft in the following amounts: Mr. Fish — $34,930, Mr. Morris — $41,696 and Ms. Hemmer — $24,146 and (ii) $3,357 of income that was imputed for the cost of the executive’s guest’s participation in Company events. Annually, we calculate an hourly direct operating cost for Company aircraft using industry standard measurements of costs for fuel, catering, telecommunications, maintenance, landing and hangar fees, flight plans and permits, and crew. We then allocate incremental cost to the named executive based on the amount of aircraft time required for the personal use, multiplied by the direct operating cost. When a deviation is made from business travel to pick up or drop off the executive in another location for a personal purpose, we calculate the time difference resulting from the flight plan deviation and multiply it by the direct operating cost. We also allocate incremental cost to the named executive in the rareunusual event that a deadhead flight is required to position the aircraft to serve personal needs. We own and operate our aircraft primarily for business use; therefore, we do not include purchase costs or other fixed costs associated with our aircraft in the direct operating cost.
(5)
Includes $100,000 of base salary in each of 2021 and 20202022 and $75,000 in 2019$200,000 of base salary in 2023 to which Mr. Fish was entitled but voluntarily relinquished to fund a scholarship program for children ofscholarships and other programs that benefit Company employees.
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