8-KLeadership ChangesExhibits & Filings

WASTE MANAGEMENT INC 8-K Report, Executive Changes (Mar 13, 2013)

Filed March 13, 2013For Securities:WM

Summary

This Form 8-K filing by Waste Management, Inc. (WM) on March 13, 2013, primarily details the compensation arrangements for its named executive officers. The Management Development and Compensation Committee granted equity awards, including performance share units (PSUs) and stock options, under the company's 2009 Stock Incentive Plan. These awards are designed to incentivize performance based on metrics such as Return on Invested Capital (ROIC) and Total Shareholder Return (TSR), with payout targets set for December 31, 2015. The filing also discloses a separation payment to former executive Steven C. Preston, amounting to $194,735, which was determined to align his departure compensation with that of other employees who participated in a voluntary early retirement program.

Key Highlights

  • 1Waste Management granted equity awards (PSUs and stock options) to its named executive officers on March 8, 2013.
  • 2Performance Share Units (PSUs) are tied to ROIC (50%) and TSR (50%) performance measures, with a potential payout ranging from 0% to 200% of the target amount.
  • 3The performance period for PSUs concludes on December 31, 2015, with payouts occurring after the audit of the 2015 financial statements.
  • 4Stock options have a 10-year term and vest over three years, with an exercise price equal to the Fair Market Value on the grant date ($36.885).
  • 5Specific grant details for key executives, including CEO David P. Steiner, are provided for both PSUs and stock options.
  • 6A separation payment of $194,735 was approved for Steven C. Preston, a former executive, to address the fact he did not receive a 2012 prorated bonus unlike other departing employees.

Frequently Asked Questions

The primary purpose of this 8-K filing is to disclose the grant of equity awards (performance share units and stock options) to Waste Management's named executive officers and to report a separation payment made to a former executive.

The PSUs are evaluated based on two equally weighted performance measures: 50% tied to Return on Invested Capital (ROIC) and 50% tied to Total Shareholder Return (TSR). The payout can range from 0% to 200% of the target amount, determined after the 2015 fiscal year-end.

The stock options have an exercise price of $36.885, which was the Fair Market Value on the date of grant. They vest over three years: 25% on the first anniversary, 25% on the second anniversary, and the remaining 50% on the third anniversary. The options have a term of 10 years from the grant date.

Steven C. Preston received a separation payment of $194,735 because he did not receive a prorated bonus for 2012, unlike other employees who participated in the voluntary early retirement program (VERP) and resigned shortly after him. The payment is equal to 50% of his target annual cash bonus for 2012, prorated to his departure date.