Summary
Waste Management, Inc. (WM) filed an 8-K on December 26, 2017, reporting on the adoption of a new Executive Severance Protection Plan (Severance Plan) by its subsidiary WM Holdings, and the entry into new or amended and restated Employment Agreements for its top three executives: James C. Fish, Jr. (CEO), Devina A. Rankin (CFO), and John J. Morris, Jr. (SVP Operations). The Severance Plan aims to provide a consistent framework for executive compensation in cases of qualifying terminations, such as termination without cause or resignation for good reason. These new arrangements signal a commitment by WM to retain and incentivize its key leadership, ensuring stability and continuity within the executive team.
Key Highlights
- 1WM adopted a new Executive Severance Protection Plan (Severance Plan) for its executive officers.
- 2The Severance Plan provides for 2x base salary + target annual bonus cash severance and 2 years of health benefits continuation upon qualifying termination (without cause or for good reason).
- 3New or amended Employment Agreements were entered into with CEO James C. Fish, Jr., CFO Devina A. Rankin, and SVP Operations John J. Morris, Jr.
- 4The Employment Agreements outline current compensation packages, including base salaries and target annual bonus percentages.
- 5Executive officers' participation in the Severance Plan is confirmed, with specific provisions for change-in-control scenarios and definitions of 'cause' and 'good reason'.
- 6Non-competition and non-solicitation clauses are included in the Employment Agreements, extending for two years post-termination.
- 7The filing also lists the Severance Plan and the Employment Agreements as exhibits to the 8-K.
Frequently Asked Questions
The primary purpose of the new Severance Plan is to establish a standardized set of severance benefits for Waste Management's executive officers in the event of certain qualifying terminations of employment, such as termination without cause or resignation for good reason. This aims to provide a consistent and predictable framework for executive compensation during such events.
Under the Severance Plan, eligible executives are entitled to receive cash severance equal to two times their base salary plus target annual bonus. This amount is payable half in a lump sum and half over two years. Additionally, executives will receive continuation of group health benefits for a two-year period following termination. A pro-rata bonus for the year of termination is also included.
The new Employment Agreements with Messrs. Fish, Rankin, and Morris largely reflect their current compensation levels, including base salaries and target annual bonus percentages. They also confirm their participation in the Severance Plan and include provisions regarding definitions of 'cause' and 'good reason,' as well as non-competition and non-solicitation clauses for a period of two years post-termination.
Yes, the Employment Agreements specify that in the event of a qualifying termination in connection with a 'change in control,' the pro rata bonus payable will be calculated based on target performance, rather than actual performance. This is consistent with the terms of their previous employment agreements.