Item 5.02. Departure of Directors or Certain
Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Change in Chief Accounting Officer
On March 7, 2023, the Board
of Directors (the “Board”) of Waste Management, Inc. (the “Company”) elected Mr. John A. Carroll to succeed Ms.
Leslie K. Nagy as Vice President and Chief Accounting Officer. The Board elected Ms. Nagy to succeed Mr. David L. Reed as Vice President
and Treasurer. Mr. Reed is now serving as Vice President, Business Partner – Western Tier Field Operations.
Mr. Carroll, age 50, joined
the Company in 2018 as Vice President, Internal Audit & Controls. Mr. Carroll was previously employed as Director of Internal Audit
at Newfield Exploration. Mr. Carroll began his career at Arthur Andersen, a public accounting firm,
in Houston, Texas. Mr. Carroll earned a Master of Science degree in accounting from Louisiana State University, and he is a certified
public accountant licensed in Texas.
In connection with his election
as Chief Accounting Officer and designation as an executive officer of the Company, Mr. Carroll’s annual base salary was increased
to $330,400. Mr. Carroll’s additional cash and equity incentive compensation opportunities were not modified.
There
were no understandings or arrangements between Mr. Carroll and any other person pursuant to which he was elected as an officer of the
Company. There are no family relationships between Mr. Carroll and any director or executive officer of the Company, and there
are no transactions between Mr. Carroll and the Company that would be required to be reported under Item 404(a) of Regulation S-K.
Grant of Equity Awards
to Named Executive Officers
On March 7, 2023, the Management Development and Compensation Committee (the “Committee”) of the Board granted equity awards
under the Company’s 2014 Stock Incentive Plan to each of the Company’s named executive officers, as identified in the Company’s
most recent proxy statement (collectively, the “Executives”).
Each of the Executives, which includes James C. Fish, Jr., President
and Chief Executive Officer; John J. Morris, Jr., Executive Vice President and Chief Operating Officer; Devina A. Rankin, Executive Vice
President and Chief Financial Officer; Mr. Charles C. Boettcher, Executive Vice President, Corporate Development and Chief Legal Officer
and Ms. Tara J. Hemmer, Senior Vice President and Chief Sustainability Officer, received performance share units (“PSUs”)
and stock options. The number of PSUs granted to each of the Executives is as follows: Mr. Fish — 51,316; Mr. Morris — 14,210;
Ms. Rankin — 12,106; Mr. Boettcher — 8,948 and Ms. Hemmer — 9,474. The material terms of the PSUs are
described below.
| PSUs |
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| Performance Calculation Date (“PCD”) |
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As of December 31, 2025; award (if any) paid out after certification by the Committee of actual level of achievement (“payment date”). |
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| Performance Measure |
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50% of the PSUs will have a cash flow generation performance measure, and 50% of the PSUs will have a total shareholder return relative to the S&P 500 performance measure, in each case as set forth in the award agreement filed as Exhibit 10.1 hereto. |
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| Range of Possible Awards |
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0 — 200% of targeted amount, plus accrued dividend equivalents, based on actual results achieved. |
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Termination of Employment
Death or Disability before PCD |
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Payable in full on payment date based on actual results as if
participant had remained an active employee through PCD. |
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Involuntary Termination for Cause or
Voluntary Resignation before PCD |
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Immediate forfeiture. |
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Involuntary Termination other than
for Cause before PCD
Retirement (as defined in the award
agreement) before PCD
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Payable on payment date based on actual results, prorated based on
portion of performance period completed prior to termination of employment.
If Retirement occurs on or after December 31,
2023, payable in full on payment date based on actual results as if participant had remained an active employee through PCD. If Retirement
occurs before December 31, 2023, payable on payment date based on actual results, prorated based on the number of days worked during 2023
(the first year of the performance period) divided by 365. |
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| Change in Control before PCD |
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Performance measured prior to the change in control and paid on
prorated basis on actual results achieved up to such date. Thereafter, participant also generally receives a replacement award of restricted
stock units in the successor entity generally equal to the number of PSUs that would have been earned had no change in control occurred
and target performance levels had been met from the time of the change of control through December 31, 2025, adjusted for any conversion
factors in the change in control transaction. The new restricted stock units in the successor entity would vest on December 31,
2025. |
The Committee granted stock options to the Executives to purchase the following number of shares of the Company’s common stock:
Mr. Fish — 59,415; Mr. Morris — 16,453; Ms. Rankin — 14,016; Mr. Boettcher – 10,360 and Ms. Hemmer –
10,969. The material terms of the stock options are described below.
| Stock Options |
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| Vesting Schedule |
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34% on first anniversary;
33% on second anniversary; and
33% on third anniversary. |
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| Term |
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10 years from date of grant. |
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| Exercise Price |
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Fair Market Value on date of grant - $150.115 . |
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Termination of Employment |
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Death or Disability |
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All options immediately vest and remain exercisable for one year, but in no event later than the original term. |
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Qualifying Retirement |
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Continued vesting and exercisability for three years, but in no event later than the original term. |
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Involuntary Termination other than for Cause or Voluntary Resignation |
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All vested options remain exercisable for 90 days, but in no event later than the original term. |
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Involuntary Termination for Cause |
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All options are forfeited, whether or not exercisable.
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Involuntary Termination or Resignation for Good Reason following
a Change in Control |
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All options immediately vest and remain exercisable for three
years, but in no event later than the original term. |
The form of award agreement for the PSUs and stock options granted to the Executives is filed as Exhibit 10.1 to this report. The descriptions
of the material terms of the awards are qualified in their entirety by reference to the appropriate award agreement, incorporated herein
by reference.