This Proxy Statement contains
forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act
of 1995 (“PSLRA”), including “forward-looking information” within the meaning of applicable Canadian securities
laws. These forward-looking statements are neither historical facts nor assurances of future performance and reflect our current
beliefs and expectations regarding future events and operating performance of the Company. These forward-looking statements are
often identified by the words “may,” “might,” “believes,” “thinks,” “expects,”
“estimate,” “continue,” “intends,” “anticipate” or other words or phrases of similar
meaning. All of the forward-looking statements included in this Proxy Statement are made pursuant to the safe harbor provisions
of the PSLRA and applicable Canadian securities laws. Forward-looking statements involve risks and uncertainties. Important factors
that could cause actual results to differ, possibly materially, from those indicated by the forward-looking statements include,
but are not limited to, risk factors detailed from time to time in our filings with the SEC and the securities commissions or similar
regulatory authorities in Canada. You should not place undue reliance on forward-looking statements, which speak only as of the
date of this Proxy Statement. We undertake no obligation to update the forward-looking statements set forth in this Proxy Statement,
whether as a result of new information, future events, or otherwise, unless required by applicable securities laws.
Unless otherwise indicated,
all dollar amounts in this Proxy Statement are expressed in U.S. dollars. The following table shows the average of the exchange
rates for each period indicated. Except as indicated below, the information is based upon the average daily exchange rates provided
by the Bank of Canada:
Proposal 3 – Appointment
of Auditor
The appointment of the Company’s
proposed independent registered public accounting firm may be approved by any one or more shareholders voting “FOR”
the Company’s proposed independent registered public accounting firm (i.e., a plurality vote). For purposes of this proposal,
votes cast at the Meeting include only those votes cast “FOR” the appointment of the proposed independent registered
public accounting firm. You may either vote “FOR” or “WITHHOLD” your vote with respect to the appointment
of the proposed independent registered public accounting firm. If you vote “FOR” the appointment of the proposed independent
registered public accounting firm, your vote will be cast accordingly. If you select “WITHHOLD,” your vote will not
be counted as a vote cast for purposes of appointing the proposed independent registered public accounting firm.
Looking at 2020
Waste Connections is an
integrated solid waste services company that provides non-hazardous waste collection, transfer and disposal services, along with
resource recovery primarily through recycling and renewable fuels generation. The Company serves more than seven million residential,
commercial and industrial customers in mostly exclusive and secondary markets across 43 states in the U.S. and six provinces in
Canada. Waste Connections also provides non-hazardous oilfield waste treatment, recovery and disposal services in several basins
across the U.S., as well as intermodal services for the movement of cargo and solid waste containers in the Pacific Northwest.
In 2020, Waste Connections
delivered another year of strong operating and financial performance, as highlighted below, in spite of the impacts from the COVID-19
pandemic. More importantly, we provided a differentiated level of employee support to address the unprecedented health, economic
and social challenges resulting from the COVID-19 pandemic.
We recognized that reducing
employee concerns regarding income, healthcare and family obligations during the pandemic would be critical to providing continuity
of service and a bit of normalcy for our customers, reduce voluntary turnover and further improve safety performance. To support
and protect our employees, we established protocols and implemented operational changes focused on the health and safety of our
frontline employees and achieved seamless transitions to remote work environments for customer service representatives and other
support personnel. In addition, we looked to provide a safety net for our employees on issues of income and family health. Through
these efforts, we enabled our employees to make the right decisions about the health of their families and the well-being of their
colleagues, which resulted in continuity of service to the communities we serve.
Looking beyond our people,
we also recognized the needs of the communities where we live and work, increasing the level of charitable contributions to assist
food banks, families at risk, and organizations with a focus on addressing racial inequities at a local or national level, providing
meals for healthcare workers and higher-risk populations, and donating critical personal protective equipment. Our strong operating
performance during this chaotic and unprecedented period reflects the benefit of this focus and is a testament to our culture,
values, and the tireless efforts of every Waste Connections employee, whether in the field, in an office or working remotely.
COVID-19-Related Support
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Over $35 million of discretionary frontline employee
support primarily for supplemental wages to all of our frontline employees, whether union or non-union, remote or in person,
and including temporary employees, as well as a “Thank You” bonus late in the year;
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Raised our targeted minimum wage to $15 per hour, above
many state and provincial requirements, to further support approximately 4% of our employees below that level;
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Expanded and extended access to medical benefits and covered
COVID-19-related testing and medical costs;
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Expanded our Employee Relief Fund for those experiencing
financial hardship;
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Launched the Waste Connections Scholarship Program to
assist our employees’ children in pursuing their educational goals; and
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Expanded community support to assist food banks, families
at risk, and organizations with a focus on addressing racial inequities at a local or national level.
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WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT iv
Performance Highlights(1)
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Increased revenue to $5.446 billion in spite
of COVID-19-related impacts to solid waste volumes and E&P waste activity.
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Net income attributable to the Company of $204.7 million and
net cash from operations of $1.409 billion.
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Adjusted EBITDA of $1.662 billion or 30.5% of revenue
with underlying margin expansion in solid waste in spite of the high decremental margin impact from COVID-19-related
decreases in commercial collection activity and disposal volumes, and the addition of over $35 million in incremental discretionary
costs primarily related to frontline employee support.
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Converted over 50% of adjusted EBITDA to adjusted free cash
flow of $842 million.
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Deployed approximately $664.5 million for capital expenditures,
up 5% from the prior year, and $388.8 million for acquisitions to reinvest in and expand our business.
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Ended 2020 with over $1.8 billion in liquidity and leverage
of 2.4 times on a net debt to EBITDA basis, providing flexibility for further capital deployment. We diversified our lending
sources and extended the tenor of our outstanding debt through two public offerings totaling $1.1 billion aggregate principal
amount of investment grade senior notes.
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Established long-term, aspirational environmental, social
and governance (“ESG”) targets and committed over $500 million for investments to meet or exceed such targets.
These investments primarily focus on reducing emissions, increasing resource recovery of both recyclable commodities and clean
energy fuels, reducing reliance on off-site disposal for landfill leachate, increasing employee engagement, and further improving
our industry-leading safety performance.
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Advanced ESG initiatives, including continued improvement in
safety, with incident rates down 12%; over 60% of our operating locations either posting zero safety-related incidents
or driving year-over-year improvements, and Total Recordable Injury Rate of less than half the industry average; and
increased employee engagement and retention, with an approximately 18% reduction in voluntary turnover on a year-over-year
basis.
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Returned over $305 million to shareholders through dividends
and opportunistic share repurchases – with double digit percentage increase to per share cash dividend. As shown
below, since its initiation in October 2010, our annual cash dividend has increased at a 15.4% compound annual growth rate
(“CAGR”) since our first full year of quarterly distributions in 2011.
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DIVIDEND GROWTH
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(1)
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This Proxy Statement includes certain measures
that do not have a standardized meaning and are not defined by generally accepted accounting principles in the United States
(“GAAP”) and, therefore, may not be comparable to similar measures used by other companies. We present adjusted
net income, a non-GAAP financial measure, supplementally because it is one of the principal measures we use to evaluate and
monitor the ongoing financial performance of our operations. We also present adjusted EBITDA, a non-GAAP financial measure,
supplementally because it is widely used by investors as a performance and valuation measure in the solid waste industry.
We also present adjusted free cash flow, a non-GAAP financial measure, supplementally because it is widely used by investors
as a valuation and liquidity measure in the solid waste industry. These measures are not a substitute for, and should be used
in conjunction with, GAAP financial measures. This section should be read in conjunction with information presented in our
Annual Report on Form 10-K for the fiscal year ended December 31, 2020, under the heading “Non-GAAP Financial Measures”,
which includes a reconciliation of the non-GAAP financial measures used in this Proxy Statement to GAAP financial measures.
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WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT v
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Total shareholder return (“TSR”) of 13.9%, which was our 17th consecutive year of positive TSR. As illustrated, our TSR significantly outperformed the S&P 500 Index (the “S&P 500”), the S&P/TSX 60 Index (“TSX 60”) and the Dow Jones U.S. Waste & Disposal Services Index (“DJ Waste Index”) for the five-year period ended December 31, 2020.
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5-YEAR TOTAL SHAREHOLDER RETURN
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Commitment to the Environment
and Sustainability
Waste Connections views its
ESG efforts as integral parts of its business, with sustainability initiatives consistent with its objective of long-term value
creation. We recognize the importance to our stakeholders of our continuing efforts to minimize our impact on the environment as
well as measuring the positive impacts we have on the communities we serve, the development and welfare of our employees, the financial
health of our Company, and the returns to our shareholders.
Since expanding the disclosure
in our Sustainability Report in 2018 to include Global Reporting Initiative data, with a subsequent update in 2019 to also include
Sustainability Accounting Standards Board data, we introduced long-term, aspirational sustainability targets in 2020, shown below,
and announced a $500 million commitment to the advancement of their achievement. In addition, as more fully described on page 28,
progress towards the achievement of long-term aspirational sustainability targets has been added as a performance measurement for
our performance-based restricted share unit awards (“Performance Share Units” or “PSUs”) starting in 2021.
For more information about
our ESG initiatives, we encourage you to visit our website at www.wasteconnections.com/sustainability.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT vi
Commitment to Safety
Safety is our first operating
value at Waste Connections. We are committed to the safety of our employees, customers, and the communities we serve. Our ultimate
goal is to “Drive to ZERO”, that is, to achieve zero incidents and accidents. Our success in safety is driven by our
self-directed and empowered employees taking personal ownership for their safety and the safety of those around them. As servant
leaders, we endeavor every day to protect our employees and the communities we are privileged to work in and around. We utilize
on-board event recording technology to identify both risky behavior, which is coached, and best practices, which are reinforced.
We have developed a risk-based scoring system for our drivers to improve their safe driving skills and hold our leaders responsible
for the performance of the employees they are privileged to serve.
While we attribute our successful
safety record to our culture and behavior-based approach, we recognize that advances in fleet design and technology can be important
tools in identifying risky behaviors and providing coaching opportunities to further improve our performance.
To that end, in 2020, we
initiated a two-year, $10 million fleet-wide upgrade of our on-board event recording technology and introduced Freightliner EconicSD
trucks with an overhauled cab design that incorporates many of the safety features already included in passenger vehicles, as well
as an integrated collision mitigation system, enhanced visibility, and several ergonomic improvements.
Commitment to Culture
At Waste Connections, we
maintain that our purposeful culture drives differentiated results, and therefore investing in our people is a priority as we employ
an approach guided by Servant Leadership. This concept inverts the traditional management hierarchy, positioning leaders to serve
their employees both professionally and personally. The philosophy empowers employees by prioritizing their needs, sharing responsibility
and driving personal development. As a result, a significant amount of our management time and resources are dedicated to leadership
training and development.
We recognize the importance
of engagement in driving culture and increasing retention, which was magnified in 2020, when the COVID-19 pandemic necessitated
the use of remote alternatives to in-person training and development and highlighted the importance of connectivity both inside
and outside of the Company. Indicators of employee engagement include retention, voluntary turnover and satisfaction, as measured
through annual Servant Leadership surveys. In 2020, our total turnover improved by 11.2%, with voluntary turnover down approximately
18% on a year-over-year basis.
We conduct an annual Servant
Leadership survey, which provides employees the opportunity to evaluate their managers on an anonymous basis and provide written
feedback. We include continuous improvement in the scores as an element of the long-term, aspirational targets included in our
2020 Sustainability Report. In 2020, our managers’ Servant Leadership scores increased by 1.9%, with an employee response
rate of over 86%.
Commitment to Diversity
& Inclusion
In keeping with our efforts
to support and encourage diversity and inclusion, we have undertaken several initiatives, including adopting in 2019 a formal Diversity
Policy for our Board of Directors and Senior Management with aspirational targets for female Board representation, and additional
disclosure on workforce composition. In addition, in 2020, we incorporated diversity and inclusion into Servant Leadership training,
focused our leadership summit on understanding and mitigating unintended biases, expanded our Servant Leadership assessments of
managers by employees to include diversity and inclusion, enhanced recruiting practices to ensure the broadest candidate pools,
established financial commitments to organizations that focus on racial inequities and that support women and children at risk,
and supported the development of resource groups including our Women’s Network and Veterans’ S.E.R.V.E. Network. Waste
Connections is a signatory to the CEO Action for Diversity & Inclusion, the largest CEO-driven business commitment to advance
diversity and inclusion within the workplace.
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT vii
Corporate Governance Highlights
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Directors elected individually (page 18);
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Majority voting policy for the election of our Directors (page
12);
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Separate Chief Executive Officer, or CEO, and Board Chairman
(page 8);
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We have a strong lead independent director of the Board of Directors
(page 8);
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Women account for 33% of independent Board members and 25% of
total Board members (page 14);
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Annual Board of Directors and committee evaluation processes
(page 9);
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Robust risk management program related to compensation of Directors,
NEOs and other corporate officers (page 39);
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Share ownership requirement for Directors, NEOs and other corporate
officers (pages 16 and 35, respectively);
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Regular executive sessions of only independent directors (page
8);
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Director retirement policy (page 9);
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Diversity Policy including aspirational targets for Board of
Directors and senior management composition (page 13); and
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Code of Conduct and Ethics (page 5).
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Executive Compensation Program
The Company’s executive
compensation program is designed to align the interests of senior management with shareholders by tying a significant portion of
their compensation to the Company’s annual operating and financial performance, as well as longer-term shareholder returns
and, beginning in 2021, progress towards achievement of ESG targets. We believe that our pay-for-performance philosophy and the
design of our executive compensation program strongly support, as shown above, an environment of continuous improvement and shareholder
value creation. Best practices of our executive compensation program include the following:
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Approximately 74% of the target total direct compensation
of our NEOs is variable and linked to the Company’s performance;
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Performance Share Units constitute 50% of total equity-based
compensation;
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Payouts under the Company’s performance-based plans remain
at the discretion of the Board of Directors and may be reduced even if targeted performance levels are achieved;
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NEOs receive annual cash incentive bonus awards only if cash
incentive bonus awards payable to other, non-executive employees have been made;
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No guaranteed base salary increases, minimum bonuses or equity
awards;
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Conservative use of equity grants;
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Inclusion of a relative TSR metric as a performance measure for
PSUs and addition of ESG target improvement as a performance measure for PSUs beginning in 2021;
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Stringent share ownership requirements;
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Double-trigger change of control policy for our CEO and other
NEOs;
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No hedging or pledging of the Company’s securities;
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Compensation clawback policy;
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Independent executive compensation consultant retained by Compensation
Committee;
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Annual “Say on Pay” vote; and
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Adoption of position descriptions for the Board Chairman (including
a Board Chairman that is an Executive Chairman), the lead independent director and the chairs of the committees of the Board
of Directors, as well as a position description for our CEO.
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For additional information,
see the “Executive Compensation” and “Compensation Risk Assessment” sections of this Proxy Statement (starting
at page 25 and page 39, respectively).
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT viii
Financial Statements
A more detailed description
of the Company’s fiscal year 2020 operating and financial performance, including a reconciliation of non-GAAP financial measures
and a graphical representation of the TSRs for the Company, the S&P 500, the TSX 60 and the DJ Waste Index, can be found on
pages 75-77 and pages 43-44, respectively, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed
with the SEC and the securities commissions or similar regulatory authorities in Canada on February 18, 2021, and available on
our website at www.wasteconnections.com, on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and in print, free of charge, to any
shareholder who requests in writing a copy by contacting our Secretary or Investor Relations at our principal administrative offices
located at Waste Connections, Inc., 3 Waterway Square Place, Suite 110, The Woodlands, Texas 77380.
Vote Your Common Shares
Whether or not you plan to
attend the Meeting, we urge you to vote and submit your proxy in order to ensure the presence of a quorum. You may do so pursuant
to the instructions on your proxy card (including by returning your proxy card by mail or using the Internet or your telephone)
if you are a registered shareholder or, pursuant to the instructions you receive from your bank or broker (including by using the
Internet or your telephone if your bank or broker provides such instructions). Voting by using the Internet or telephone, or by
returning your proxy card in advance of the Meeting, does not preclude you from attending the Meeting. Please refer to your proxy
card or voting instruction form included with this Proxy Statement or to the “Voting and Revocation” section on page
2 of this Proxy Statement for more information on the voting methods available to you. In-person attendance at the Meeting will
be granted on a first-come, first-served basis, and may be limited due to COVID-19-related restrictions.
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT ix
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blank.
GENERAL INFORMATION
Who May Vote
The record date for determining the holders of Common Shares
entitled to receive notice of and to vote at the Meeting is March 16, 2021 (the “Record Date”). Only shareholders whose
names have been recorded in our share register at the close of business on the Record Date will be entitled to receive notice of
and to vote at the Meeting. As of the Record Date, 262,564,306 Common Shares were outstanding and entitled to vote. Each shareholder
of record is entitled to one vote for each Common Share held by the shareholder.
Business of Meeting; What is Being Voted On
Shareholders will be voting (i) to elect the
nominees for directors of the Company, (ii) in an advisory, non-binding capacity, to approve the compensation of our NEOs as disclosed
in the “Executive Compensation” section of this Proxy Statement (“Say on Pay”); and (iii) to approve the
appointment of Grant Thornton LLP as auditors of the Company and to authorize the Board of Directors to fix the auditor’s
remuneration. Our Board of Directors is recommending that shareholders vote “FOR”
each of the nominees in proposal (i); and “FOR”
proposals (ii) and (iii).
In addition to the foregoing matters, the Company’s
audited consolidated financial statements for the fiscal year ended December 31, 2020, and the auditor’s report thereon,
will be placed before the Meeting. No formal action will, or is required to, be taken at the Meeting with respect to our audited
consolidated financial statements for the fiscal year ended December 31, 2020.
Our 2020 audited consolidated financial statements, and the
auditor’s report thereon, were included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020,
filed with the SEC and the securities commissions or similar regulatory authorities in Canada on February 18, 2021, and available
on our website at www.wasteconnections.investorroom.com, on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and in print, free
of charge, to any shareholder who requests in writing a copy by contacting our Secretary or Investor Relations at our principal
administrative offices located at Waste Connections, Inc., 3 Waterway Square Place, Suite 110, The Woodlands, Texas 77380.
Required Votes
Proposal 1 – Election of Directors
The election of each director nominee may be approved by any
one or more shareholders voting “FOR” each such director nominee (i.e., a plurality vote). For purposes of this proposal,
votes cast at the Meeting include only those votes cast “FOR” the election of a director nominee. You may either vote
“FOR” or “WITHHOLD” your vote with respect to the election of each director nominee. If you vote “FOR”
the election of a nominee, your vote will be cast accordingly. If you select “WITHHOLD” with respect to the election
of a nominee, your vote will not be counted as a vote cast for the purposes of electing such nominee but will be considered in
the application of the majority voting policy included in our Corporate Governance Guidelines and Board Charter. See “Majority
Voting for Directors” on page 12 of this Proxy Statement. Pursuant to our majority voting policy, a “WITHHOLD”
vote is treated as a share present or represented and entitled to vote on the director nominee and has the same effect as a vote
“AGAINST” the nominee.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 1
Proposal 2 – Say on Pay Proposal
The Say on Pay Proposal may be approved by the affirmative
vote of a simple majority (50 percent plus one) of the Common Shares present, either in person or by proxy, and entitled to vote
(meaning that at least a simple majority of the votes cast must be “FOR” the Say on Pay Proposal in order for it to
be approved). You may either vote “FOR” or “AGAINST,” or you may “WITHHOLD” from voting on,
the Say on Pay Proposal. For purposes of the Say on Pay Proposal, a “WITHHOLD” vote will have the same effect as a
vote “AGAINST” the Say on Pay Proposal because those Common Shares are considered to be present and entitled to vote,
but are not voted.
Proposal 3 – Appointment of Auditor
The appointment of the Company’s proposed independent
registered public accounting firm may be approved by any one or more shareholders voting “FOR” the Company’s
proposed independent registered public accounting firm (i.e., a plurality vote). For purposes of this proposal, votes cast at the
Meeting include only those votes cast “FOR” the appointment of the proposed independent registered public accounting
firm. You may either vote “FOR” or “WITHHOLD” your vote with respect to the appointment of the proposed
independent registered public accounting firm. If you vote “FOR” the appointment of the proposed independent registered
public accounting firm, your vote will be cast accordingly. If you select “WITHHOLD” your vote will not be counted
as a vote cast for purposes of appointing the proposed independent registered public accounting firm.
Broker Non-Votes
Broker non-votes are counted as present and entitled to vote
at the Meeting for the purpose of establishing a quorum, but are not considered votes cast at the Meeting and will have no effect
on the vote of any of the proposals to be considered at the Meeting. A broker non-vote occurs when a broker signs and returns
a proxy but does not vote on a particular proposal because the broker does not have discretionary voting power for that particular
item and has not received voting instructions from the beneficial owner.
Voting and Revocation
You may receive more than one proxy card and/or proxy notice
depending on how you hold your Common Shares. You should complete and return each proxy card or other voting instruction request
provided to you in accordance with the instructions provided therein.
Registered Holders
If you are a registered holder of Common Shares as of the
Record Date, you will be able to vote your proxy pursuant to the instructions on your proxy card, including by mail by signing,
dating and mailing a proxy card in the postage-paid envelope provided, or by using the Internet or your telephone. You may also
attend the Meeting and vote in person. Voting by using the Internet or telephone, or by returning your proxy card in advance of
the Meeting, does not preclude you from attending the Meeting.
You are a registered shareholder if your name appears on your
certificate or statement from the Direct Registration System representing your Common Shares. If this is the case, you may appoint
someone else to vote for you as your proxy holder by using the enclosed form of proxy card. The persons named as proxies in such
form of proxy card are the Executive Vice President and Chief Financial Officer of the Company and the Vice President, Deputy General
Counsel and Assistant Secretary of the Company. However, you have the right to appoint any other person or company (who need
not be a shareholder) to attend and act on your behalf at the Meeting. That right may be exercised by writing the name of such
person or company in the blank space provided in the form of proxy card or by completing another proper form of proxy card or by
using the Internet by following the instructions provided on your proxy card. Make sure that the person you appoint is aware that
he or she is appointed and that this person attends the Meeting.
Even if you vote your Common Shares by mailing a proxy card,
or by using the Internet or by telephone in accordance with the instructions on your proxy card, you may revoke your proxy and
cast a new vote at the Meeting, if we are able to verify that you are a registered holder of Common Shares, or by mailing a notice
revoking the prior proxy and then voting in person or as otherwise permitted by applicable law. You may also change your vote before
the Meeting by mailing another proxy card bearing a later date, by updating your vote using the Internet or telephone in accordance
with the instructions on your proxy card, or by delivering a letter revoking the proxy card to our Secretary at our principal administrative
offices located at Waste Connections, Inc., 3 Waterway Square Place,
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 2
Suite 110, The Woodlands, Texas 77380. Broadridge Financial
Solutions, Inc. must receive your revocation no later than 5:00 p.m. (Eastern Time) on May 13, 2021. The proxy card or your
Internet or telephone voting instructions with the latest date properly submitted by you before voting is closed at the Meeting
will be counted.
Shares Held in Street Name (Non-registered Holders)
If you have selected a broker, bank or other intermediary
to hold your Common Shares rather than having them directly registered in your name with our transfer agent, Computershare Investor
Services, you will receive instructions from your broker, bank or other intermediary on the procedure to follow to vote your Common
Shares. Your broker, bank or other intermediary also may permit you to vote your proxy by telephone or the Internet. Please
be aware that beneficial owners of Common Shares held by brokers, banks or other intermediaries may not vote their Common Shares
in person at the Meeting unless they first obtain a written authorization to do so from their broker, bank or other intermediary
and can only change or revoke previously issued voting instructions pursuant to instructions provided by their broker, bank or
other intermediary. We urge you to vote by following the instructions of your broker, bank or other intermediary.
However, if you wish to vote in person at the Meeting, insert
your own name in the space provided on the voting instruction form provided by your broker, bank or other intermediary to appoint
yourself as proxy holder and follow the signature and return instructions of your broker, bank or other intermediary. Broadridge
Financial Solutions, Inc. must receive your appointment no later than 5:00 p.m. (Eastern Time) on May 13, 2021. Non-registered
shareholders who appoint themselves as proxy holders should present themselves at the Meeting to a representative of the Company.
Other than appointing yourself as your own proxy holder, do not otherwise complete the voting instruction form sent to you as you
will be voting at the Meeting.
Non-registered shareholders are either “objecting beneficial
owners” or “OBOs”, who object to the disclosure by intermediaries of information about their ownership in the
Company, or “non-objecting beneficial owners” or “NOBOs”, who do not object to such disclosure. The Company
pays intermediaries to send proxy-related materials to OBOs and NOBOs.
How Proxies Work
Our Board of Directors is asking for your proxy. Giving us
your proxy means that you authorize us to vote your Common Shares at the Meeting in the manner you direct. The Common Shares represented
by your proxy will be voted or withheld from voting in accordance with your instructions on any ballot that may be called for,
and if you specify a choice with respect to any matter to be acted upon, your Common Shares will be voted accordingly. If you sign
your proxy card or voting information form but do not give voting instructions, we will vote your Common Shares as follows:
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FOR
each of our director nominees;
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FOR
the non-binding, advisory proposal to approve the compensation of our NEOs as disclosed
in this Proxy Statement (also known as say on pay); and
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FOR
the appointment of the independent registered public accounting firm and authorizing
the Board of Directors to fix the auditor’s remuneration.
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You can choose to vote “FOR” or “WITHHOLD”
from: (i) the election of any one or more of the persons nominated for election as directors; and (ii) the appointment of Grant
Thornton LLP as our independent registered public accounting firm until the close of business of the 2022 Annual Meeting of Shareholders
of the Company and the authorization of the directors to fix the auditor’s remuneration. You can choose to vote “FOR”,
“AGAINST” or “WITHHOLD” on the approval, on a non-binding, advisory basis, of the compensation of our NEOs
as disclosed in this Proxy Statement.
Quorum
In order to carry on the business of the Meeting, we must
have a quorum at the Meeting. A quorum for the transaction of business at a meeting of shareholders of the Company consists of
at least two persons present and each entitled to vote at the meeting and holding personally or representing as proxies, in the
aggregate, 25% of the eligible vote.
Abstentions and broker non-votes are counted as present and
entitled to vote at the Meeting for purposes of determining whether we have a quorum. A broker non-vote occurs when a broker signs
and returns a proxy but does not vote on a particular proposal because the broker does not have discretionary voting power for
that particular item and has not received voting instructions from the beneficial owner.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 3
Attending in Person
Only shareholders, their proxy holders and our invited guests
may attend the Meeting. If you plan to attend, please bring identification and, if you hold Common Shares in street name, you should
bring your bank or broker statement showing your beneficial ownership of Common Shares in order to be admitted to the Meeting.
In-person attendance at the Meeting will be granted on a first-come, first-served basis, and may be limited due to COVID-19-related
restrictions.
How to Contact our Transfer Agent
You can contact our transfer agent either by mail at Computershare
Investor Services, 100 University Avenue, 8th Floor, Toronto, Ontario M5J 2Y1, by telephone at 1-800-564-6253, by fax
at 1-888-453-0330 or by Internet in English at www-us.computershare.com/Investor/#Contact?cc=ca&lang=en, or in French at www-us.computershare.com/Investor/#Contact?cc=ca&lang=fr.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 4
CORPORATE GOVERNANCE
Corporate Governance Guidelines
As part of our ongoing commitment to good corporate governance,
we have adopted, among other measures, the Corporate Governance Guidelines and Board Charter, and charters for each of the standing
committees of the Board of Directors (other than the Executive Committee) to promote the effective functioning of our Board of
Directors and its committees, to promote the interests of the Company as a whole and to ensure a common set of expectations concerning
how our Board of Directors, its committees and management should perform their respective functions.
Code of Conduct and Ethics
We have also adopted a Code of Conduct and Ethics that applies
to all of our directors, officers and employees. The Nominating and Corporate Governance Committee is responsible for ensuring
the Company implements good corporate governance practices, including compliance with the Code of Conduct and Ethics. Directors
who have, or who may be reasonably perceived to have, a personal or related-party interest in a transaction or agreement being
contemplated by the Company are required to declare such interest at any meeting at which the matter is being considered and, when
appropriate, will leave the meeting during discussion and abstain from voting on such matter.
Copies of our Corporate Governance Guidelines and Board Charter,
our Code of Conduct and Ethics and our committee charters are available on our website at www.wasteconnections.investorroom.com/corporate-governance.
A copy of the Corporate Governance Guidelines and Board Charter is included as Appendix A to this Proxy Statement, and a
copy of the Corporate Governance Guidelines and Board Charter and our Code of Conduct and Ethics may also be obtained, free of
charge, by writing to the Secretary of Waste Connections, Inc., at our principal administrative offices located at Waste Connections,
Inc., 3 Waterway Square Place, Suite 110, The Woodlands, Texas 77380.
Committees of the Board
Our Board of Directors has four standing committees: the Executive
Committee, the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Except for the
Executive Committee, all committees are composed entirely of independent, non-employee directors.
Executive Committee
The Executive Committee, whose committee chairman is Mr. Ronald
J. Mittelstaedt and whose other members are Messrs. Michael W. Harlan and Larry S. Hughes, is authorized to exercise, subject to
limitations under applicable law, all of the powers and authority of the Board of Directors in managing our business and affairs,
including approval, between meetings of the Board of Directors, of all divestitures by the Company in excess of $25.0 million and
all acquisitions by the Company for cash or other non-equity consideration in excess of $25.0 million.
Audit Committee
The Board of Directors has a standing Audit Committee established
in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The
Audit Committee, whose chairman is Mr. Harlan and whose other members are Ms. Elise L. Jordan and Messrs. Hughes and
William J. Razzouk, advises our Board of Directors and management with respect to, among other matters, internal controls, financial
systems and procedures, accounting policies and other significant aspects of the Company’s financial management. Pursuant
to its charter, the Audit Committee selects the Company’s independent registered public accounting firm, oversees the arrangements
for, and approves the scope of, the audits to be performed by the independent registered public accounting firm, and annually assesses
the performance of the independent registered public accounting firm. The Board of Directors has determined that all of the members
of the Audit Committee are “financially literate” within the meaning of NYSE listing standards and applicable Canadian
securities laws. The Board of Directors has also determined that Mr. Harlan and Ms. Jordan are both “audit committee financial
experts” as defined under the applicable SEC rules. The Audit Committee’s duties are discussed below under “Audit
Committee Report.”
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 5
Compensation Committee
The Compensation Committee, whose chairman is Mr. Razzouk
and whose other members are Ms. Susan “Sue” Lee and Mr. Edward E. “Ned” Guillet, is responsible for, among
other matters, establishing our corporate officer compensation policies and administering such policies. Pursuant to its charter,
the Compensation Committee studies, recommends and implements the amount, terms and conditions of payment of any and all forms
of compensation for our directors, NEOs and other corporate officers; approves and administers any guarantee of any obligation
of, or other financial assistance to, any officer or other employee; and approves the grant of restricted share units, share options,
warrants and other forms of equity incentives to officers, employees and consultants. The Compensation Committee also makes recommendations
to the Board of Directors concerning cash and equity-based compensation and benefits for non-employee directors. See “Compensation
Discussion and Analysis—Executive Compensation” for more information regarding compensation and the Compensation Committee.
Compensation Committee Interlocks and Insider Participation
In 2020, the Compensation Committee consisted of Ms. Lee and
Messrs. Razzouk and Guillet. None of our executive officers served as a director or member of the compensation committee of another
entity which had an executive officer that served as a director or member of our Compensation Committee. In addition, there are
no other such potential Compensation Committee interlocks.
Nominating and Corporate Governance Committee
The Nominating and Corporate Governance Committee, whose chairman
is Mr. Guillet and whose other members are Mses. Jordan and Lee and Mr. Harlan, is responsible for, among other matters, recommending
director nominees to the Board of Directors, overseeing an annual self-evaluation process to assess the effectiveness of the Board
of Directors and its committees, and developing and implementing corporate governance principles. See “Board Renewal; Board
Performance Evaluation” for more information regarding the committee’s annual self-evaluation process.
Copies of the Audit Committee Charter, the Compensation Committee
Charter and the Nominating and Corporate Governance Committee Charter, each of which our Board of Directors has adopted, are available
on our website at www.wasteconnections. investorroom.com/corporate-governance. A copy of each charter may also be obtained, free
of charge, by writing to the Secretary of Waste Connections, Inc., at our principal administrative offices located at Waste Connections,
Inc., 3 Waterway Square Place, Suite 110, The Woodlands, Texas 77380.
Independence of Committee Members
In addition to the general requirements for the independent
members of our Board of Directors described below, members of the Audit Committee and the Compensation Committee must also satisfy
the additional independence requirements of the NYSE and applicable securities laws. These rules and laws, among other things,
prohibit a member of the Audit Committee or the Compensation Committee, other than in his or her capacity as a member of such committee,
the Board of Directors or any other committee of the Board of Directors, from receiving any compensatory fees from or being an
affiliated person of the Company or any of its subsidiaries. As a matter of policy, the Board of Directors also applies this additional
requirement to members of the Nominating and Corporate Governance Committee.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 6
Board and Committee Meeting Attendance
The Board of Directors held four meetings during 2020, all
of which were regularly scheduled. Three of the meetings were held via video conference. The Executive Committee met one time in
2020. The Audit Committee met four times during 2020. The Compensation Committee met five times during 2020. The Nominating and
Corporate Governance Committee met four times during 2020. Each director of Waste Connections attended at least 75% of the meetings
of the Board of Directors held during 2020. Each director of Waste Connections attended at least 75% of the meetings of the committees
on which he or she served during 2020. The attendance record of each director for all Board of Directors and committee meetings
held during 2020 is set out below.
|
Name
|
|
Board
|
|
Executive
Committee
|
|
Audit
Committee
|
|
Compensation
Committee
|
|
Nominating
and Corporate
Governance
Committee
|
|
Ronald J.
Mittelstaedt
|
|
4/4
|
|
1/1
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Edward E.
“Ned” Guillet
|
|
4/4
|
|
N/A
|
|
N/A
|
|
5/5
|
|
4/4
|
|
Michael W.
Harlan
|
|
4/4
|
|
1/1
|
|
4/4
|
|
N/A
|
|
4/4
|
|
Larry S.
Hughes
|
|
4/4
|
|
1/1
|
|
4/4
|
|
N/A
|
|
N/A
|
|
Worthing
F. Jackman
|
|
4/4
|
|
N/A
|
|
N/A
|
|
N/A
|
|
N/A
|
|
Elise L.
Jordan
|
|
4/4
|
|
N/A
|
|
4/4
|
|
N/A
|
|
4/4
|
|
Susan “Sue”
Lee
|
|
4/4
|
|
N/A
|
|
N/A
|
|
5/5
|
|
4/4
|
|
William
J. Razzouk
|
|
4/4
|
|
N/A
|
|
4/4
|
|
5/5
|
|
N/A
|
The Board’s Role in Risk Oversight
The Board of Directors and its committees have an active role
in overseeing management of the Company’s risks. The Board of Directors regularly reviews information from members of senior
management regarding the Company’s safety performance, employee retention, financial performance, financial outlook, balance
sheet, credit profile and liquidity, as well as the risks associated with each. The Board of Directors also receives reports from
members of senior and regional management on areas of material risk to the Company, including market-specific, operational, legal,
information technology (including cybersecurity), regulatory and strategic risks. The Board of Directors, with recommendations
from the Audit and Compensation Committees, approves and maintains a succession plan for the CEO and other senior management of
the Company, including policies and principles for selecting and evaluating a new CEO in the event of an emergency or retirement
of the CEO. The Audit Committee oversees management of financial, financial reporting and internal controls risk. The Compensation
Committee assesses and monitors risks relating to the Company’s corporate officer compensation policies and practices. The
Nominating and Corporate Governance Committee is responsible for overseeing the management of risks associated with the independence
of the Board of Directors and potential conflicts of interest.
The Board of Directors receives reports on information technology
risks, including cybersecurity and data security risks. Day-to-day management of data security is the responsibility of our Chief
Information Officer, who reports directly to the Chief Executive Officer. The Board periodically reviews cybersecurity and data
security risks and mitigation strategies with the Chief Information Officer.
The Board of Directors and its committees also have an active
role in the Company’s efforts to advance sustainability and diversity and inclusion, including the development and approval
of targets, monitoring achievement towards such objectives, and evaluating the effectiveness of policies and targets. In addition,
the Board added ESG targets as a performance measure in long-term incentive compensation beginning in 2021.
Director Independence
The Board of Directors has determined that each of Mses. Jordan
and Lee and Messrs. Guillet, Harlan, Hughes and Razzouk is “independent” within the meaning of the standards set forth
in our Corporate Governance Guidelines and Board Charter, a copy of which is attached as Appendix A. Ronald J. Mittelstaedt
and Worthing F. Jackman are not “independent” within the meaning of the standards set forth in our Corporate Governance
Guidelines and Board Charter because Mr. Mittelstaedt, as the Executive Chairman of the Board of Directors, is an employee of the
Company, and Mr. Jackman is the CEO of the Company.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 7
Board Leadership Structure
The Board of Directors selects its chairman and the CEO in
any way it considers to be in the best interests of the Company. Effective July 2019, the Board of Directors split the position
of Board Chairman and CEO.
The Board has determined that the Company is best served by
having Ronald J. Mittelstaedt, the Company’s founder, serve as the Board’s Executive Chairman. Mr. Mittelstaedt previously
held the positions of Board Chairman and CEO from January 1998 until July 2019, when Mr. Mittelstaedt transitioned to the position
of Executive Chairman and Worthing F. Jackman was promoted to CEO. Since Mr. Mittelstaedt no longer serves as both Board Chairman
and CEO, our Corporate Governance Guidelines and Board Charter provides that the positions of Board Chairman and CEO be held by
separate persons.
Lead Independent Director Responsibilities
Our Corporate Governance Guidelines and Board Charter requires
that at each regularly scheduled meeting of the Board of Directors, the non-employee directors meet separately, without management
present, in executive session. The non-employee directors may also meet without management present at other times as determined
by the lead independent director. Furthermore, when the Board Chairman is an affiliated director or a member of the Company’s
management, or when the independent directors determine that it is in the best interests of the Company, the independent directors
will appoint from among themselves a lead independent director (the “lead independent director”). The Board of Directors
has designated the chairman of the Audit Committee, Mr. Harlan, as the lead independent director. In addition to his other duties
as a director and member of committees, the lead independent director will:
|
■
|
Preside at all meetings of
the Board of Directors at which the Board Chairman is not present;
|
|
■
|
Preside over each meeting
of non-employee directors;
|
|
■
|
Have the authority to call
meetings of non-employee directors;
|
|
■
|
Help facilitate communication
between the Board Chairman, the CEO and the non-employee directors;
|
|
■
|
Advise with respect to the
Board of Directors’ agenda;
|
|
■
|
Ensure that the Board of
Directors is able to function independently of management;
|
|
■
|
Serve as the leader of the
Board of Directors on matters of corporate governance;
|
|
■
|
If requested by major shareholders,
ensure his or her availability for direct communication;
|
|
■
|
Ensure that all directors
have an independent contact on matters of concern to them and ensure that the Board of Directors successfully discharges its
fiduciary duties;
|
|
■
|
Provide guidance on, and
monitor, the independence of each director to ensure the independence of a majority of the Board of Directors;
|
|
■
|
Provide leadership to the
Board of Directors if circumstances arise in which the Board Chairman has, or may be perceived to have, a conflict;
|
|
■
|
Ensure that functions delegated
to committees of the Board of Directors are carried out as represented and results are reported to the Board of Directors;
|
|
■
|
Work with the Board Chairman
and the CEO, including helping to review strategies, define issues, maintain accountability and build relationships;
|
|
■
|
In conjunction with the Nominating
and Corporate Governance Committee, facilitate the review and assessment of individual director attendance and performance
and the size, composition and overall performance of the Board of Directors and its committees;
|
|
■
|
In collaboration with the
Board Chairman and the corporate secretary ensure that information requested by individual directors, the entire Board of
Directors or committees of the Board of Directors is provided and meets their needs; and
|
|
■
|
Together with the Board Chairman,
ensure the directors are knowledgeable about their obligations to the Company and its securityholders, management and other
stakeholders, and pursuant to applicable law.
|
If the Board Chairman is an independent director, then the
duties for the lead independent director described above shall be part of the duties of the Board Chairman. As set forth in our
Corporate Governance Guidelines and Board Charter, a majority of the members of our Board of Directors must be independent. For
a director to be considered independent, the Board of Directors must determine that the director is “independent” within
the meaning of (i) Section 1.4 of National Instrument 52-110 – Audit Committees of the Canadian Securities Administrators
and (ii) Section 303A.02 of the Listed Company Manual of the NYSE, in each case as such laws or rules, as applicable, may be amended
or replaced. In addition, for a director to be considered independent, the Board of Directors must determine that the director
has no material relationship with the Company, provided that the direct or indirect ownership of any
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 8
amount of the Company’s shares will not be deemed to
constitute a material relationship. No director who is a former employee of the Company, is a former employee or affiliate of any
current auditor of the Company or its subsidiaries, is a part of an interlocking directorate in which any NEO or other corporate
officer of the Company serves on the compensation committee of another company that concurrently employs such director or has an
immediate family member in any of the foregoing categories, can be independent until three years after such employment, affiliation
or relationship has ceased.
The Board of Directors reviews all relationships of each director
to assess whether any of them is a material relationship so as to impair that director’s independence. A “material
relationship” means a direct or indirect commercial, industrial, banking, consulting, legal, accounting, charitable or familial
relationship that is reasonably likely to affect the independent and objective judgment of the director in question, provided that
the direct or indirect ownership of any amount of our shares is not deemed to constitute a material relationship. The following
commercial or charitable relationships are not considered to be material relationships that would impair a director’s independence:
if a director of the Company (a) is also an executive officer of another company that does business with the Company and the annual
sales to, or purchases from, the Company are less than the greater of $1 million or two percent of the annual revenue of that other
company; (b) is an executive officer of another company that is indebted to the Company, or to which the Company is indebted, and
the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets
of that other company; or (c) serves as an officer, director or trustee of a charitable organization, and the Company’s discretionary
charitable contributions to that organization are less than one percent of that organization’s total annual receipts. The
Board of Directors reviews annually whether its members satisfy these applicable independence tests before any member stands for
re-election to the Board of Directors.
Board Composition
Board Renewal
The Company does not limit the time a director can serve on
the Board of Directors. While director term limits could potentially assist the Board of Directors in gaining fresh perspectives
and meeting diversity objectives, imposing director term limits means that the Board of Directors may lose the contributions of
longer serving directors who have developed a deeper knowledge and understanding of our business and have a demonstrated track
record for guiding the Company through a long-term period of shareholder value creation.
The Board of Directors believes that there are a number of
mechanisms for ensuring renewal of the Board of Directors without implementing director term limits, including the use of performance
evaluations of the Board of Directors, mandatory retirement policies for directors, the identification of skills needed on the
Board of Directors and succession planning. The Board of Directors has adopted a director retirement policy that provides that
no director who is over the age of 75 at the expiration of his or her current term may be nominated to a new term. However, the
Nominating and Corporate Governance Committee may determine that it would be in the best interests of the Company to ask a director
to remain on the Board of Directors for an additional period of time beyond age 75, or to stand for re-election even if such director
is over the age of 75.
Board and Committee Performance Evaluation
The Board of Directors and each committee perform an annual
performance self-evaluation to assess, at a minimum, the effectiveness and adequacy of the meetings of the Board of Directors and
its committees, the adequacy and timeliness of information provided to the Board of Directors by the Company’s management,
the diversity of experience of individual directors and the contributions of each director. The evaluation process is overseen
by the Nominating and Corporate Governance Committee and includes questionnaires completed by each director that take into account
observations from previous assessments, current topics, and other input from the Board of Directors. A complete set of responses
is then reviewed by each committee and the Board of Directors. Based on feedback from the 2020 evaluation, the directors concluded
that the Board of Directors and each of its committees functioned well together, and that the members of our Board of Directors
were satisfied with the overall performance of the Board of Directors and each of its committees.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 9
Our Director Nomination Process
Our Board of Directors believes that directors must have the
highest personal and professional ethics, integrity and values. They must be committed to representing the best interests of the
Company and should be committed to serving on the Board of Directors for an extended period of time. They must have an objective
perspective, practical wisdom, mature judgment and expertise, skills and knowledge useful to the oversight of our business. Our
goal is to have a Board of Directors that represents diverse experiences at policy-making levels in business and other areas relevant
to our activities, while encouraging a diversity of backgrounds, including with respect to gender, among the members of our Board
of Directors. Our Board of Directors believes it is paramount to maintain flexibility in the nominating process in order to ensure
that the most qualified available candidates are selected as circumstances dictate and the needs of the Company evolve. In identifying
suitable candidates for nomination to the Board of Directors, the Nominating and Corporate Governance Committee will consider candidates
on merit using objective criteria and with due regard for the benefits of diversity on the Board of Directors, including the level
of representation of women on the Board of Directors. The Board of Directors consists of eight directors, of which two are women,
representing 25% of the Board of Directors and 33% of the independent members of the Board of Directors. For additional discussion
of our diversity policies and practices, see “Corporate Governance – Diversity Policy”.
Our Board of Directors maintains a competency matrix to assess
its composition. The following graphics summarize the key experiences, skills and diversity represented on our Board of Directors.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 10
In addition to the foregoing qualities, the Nominating and
Corporate Governance Committee will take a number of other factors into account in considering candidates as nominees for the Board
of Directors, including the following: (i) whether the candidate is independent within the meaning of our Corporate Governance
Guidelines and Board Charter; (ii) relevant business, academic or other experience; (iii) willingness and ability to attend and
participate actively in Board of Directors and committee meetings and otherwise to devote the time necessary to serve, taking into
consideration the number of other boards on which the candidate serves and the candidate’s other business and professional
commitments; (iv) potential conflicts of interest; (v) whether the candidate is a party to any adverse legal proceeding; (vi) the
candidate’s reputation; (vii) specific expertise and qualifications relevant to any committee that the candidate is being
considered for, such as whether a candidate for the Audit Committee meets the applicable financial literacy or audit committee
financial expert criteria; (viii) willingness and ability to meet our director’s equity ownership guidelines; (ix) willingness
to adhere to our Code of Conduct and Ethics; (x) ability to interact positively and constructively with other directors and management;
(xi) willingness to participate in a one-day new director orientation session; (xii) willingness to attend educational forums or
workshops to enhance understanding of new and evolving governance requirements; and (xiii) the size and composition of the Board
of Directors.
When seeking director candidates, the Nominating and Corporate
Governance Committee may solicit suggestions from incumbent directors, management, third party advisors, business and personal
contacts, and shareholders. The Nominating and Corporate Governance Committee may also engage the services of a third-party search
firm to help identify and facilitate the screening and interview process of potential director nominees. After conducting an initial
evaluation, the Nominating and Corporate Governance Committee will make arrangements for candidates it considers suitable to be
interviewed by one or more members of the committee. Each candidate will be required to complete a standard directors’ and
officers’ questionnaire, which is also completed by all of the directors annually. The Nominating and Corporate Governance
Committee may also ask the candidate to meet with members of our management. If the Nominating and Corporate Governance Committee
believes that the candidate would be a valuable addition to the Board of Directors, it will recommend the candidate for nomination
to the Board of Directors. Before recommending a sitting director to be nominated for re-election at an annual meeting of shareholders,
the Nominating and Corporate Governance Committee will consider the director’s past performance and contribution to the Board
of Directors.
The Nominating and Corporate Governance Committee will apply
the criteria described above when considering candidates recommended by shareholders as nominees for the Board of Directors. In
addition, any of our shareholders may nominate one or more persons for election as a director of the Company at any meeting of
shareholders called for the purpose of electing directors if the shareholder complies with the notice, information and consent
provisions contained in our By-law No. 1. Pursuant to our By-law No. 1, to be considered for inclusion in our proxy materials,
notice of a shareholder’s nomination of a person for election to the Board of Directors (the “Notice”) must be
received by the Secretary of the Company in writing at the address listed on the first page of this Proxy Statement for the Meeting
not later than the close of business on the 30th day before the date of the annual meeting of shareholders; except that,
if the first public announcement made by the Company of the date of the annual meeting of shareholders (the “Notice Date”)
is less than 50 days prior to the date of the annual meeting of shareholders, notice by the shareholder may be given not later
than the close of business on the 10th day following the Notice Date. In the case of a special meeting that is not also
an annual meeting, the notice must be given not later than the 15th day following the applicable Notice Date. The notice
must contain and be accompanied by certain information as specified in our By-law No. 1 and set forth below, including information
about the shareholder providing the notice and the proposed nominee(s) (the “Proposed Nominee”).
Shareholders making nominations must provide, among other
things:
|
■
|
Their name, business
and residential address;
|
|
■
|
The number of securities
of the Company beneficially owned, or controlled or directed, directly or indirectly, by the shareholder or any other person
with whom the shareholder is acting jointly or in concert with respect to the Company or any of its securities as of the record
date for the meeting and the date of the proxy notice;
|
|
■
|
Their interests in, or rights
or obligations associated with, any agreements, arrangements or understandings, the purpose or effect of which is to alter,
directly or indirectly, the person’s economic interest in a security of the Company or the person’s economic exposure
to the Company;
|
|
■
|
Full particulars of any proxy,
contract, relationship, arrangement, agreement or understanding pursuant to which such person, or any of his or her affiliates
or associates, or any person acting jointly or in concert with such person, has any interests, rights or obligations relating
to the voting of any securities of the Company or the nomination of directors to the Board of Directors; and
|
|
■
|
Any other information that
would be required to be included in a dissident proxy circular or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to applicable law.
|
Additionally, shareholders nominating director candidates
are required to disclose, among other things:
|
■
|
The name, age,
business and residential address of the Proposed Nominee;
|
|
■
|
The principal occupation,
business or employment of the Proposed Nominee, both presently and within the past five years;
|
|
■
|
Whether the Proposed Nominee
is a resident Canadian;
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 11
|
■
|
The number of
securities of each class of securities of the Company or any of its subsidiaries beneficially owned, or controlled or directed,
directly or indirectly, by the Proposed Nominee, as of the record date and the date of the proxy notice;
|
|
■
|
Full particulars of any relationship,
agreement, arrangement or understanding, including financial, compensation and indemnity related relationships, agreements,
arrangements or understandings, between the Proposed Nominee and the shareholder, or any affiliates or associates of, or any
person or entity acting jointly or in concert with, the Proposed Nominee or the shareholder, in connection with the Proposed
Nominee’s nomination and election as a director of the Company; and
|
|
■
|
Any other information that
would be required to be included in a dissident proxy circular or other filings required to be made in connection with solicitations
of proxies for election of directors pursuant to applicable law. Such information must be promptly updated and supplemented
so as to be accurate as of the Record Date.
|
We recommend that any shareholder wishing to nominate a director
at an annual meeting of shareholders review a copy of our By-law No. 1.
Majority Voting for Directors
Our Corporate Governance Guidelines and Board Charter provides,
in uncontested director elections, for our directors to be elected by the affirmative vote of a “majority of the votes cast”
with respect to his or her election at a meeting of shareholders, and each incumbent director who receives more “WITHHOLD”
votes than votes “FOR” in respect of his or her election must resign from the Board of Directors. A “majority
of the votes cast” means that the number of shares voted “FOR” a director’s election exceeds 50% of the
number of the total votes cast with respect to that director’s election. The total votes cast with respect to that director’s
election will include votes “FOR” that director and “WITHHOLD” votes, but will exclude abstentions, broker
non- votes, and failures to vote with respect to that director’s election. Upon receipt of such a tendered resignation, the
Nominating and Corporate Governance Committee of the Board of Directors or another independent committee of the Board of Directors
will make a determination as to whether to recommend that the Board of Directors accept or reject such resignation. The applicable
committee is expected to recommend that the Board of Directors accept the resignation absent exceptional circumstances. The director
who is the subject of such determination is not permitted to participate in the deliberations or decisions of the deciding committee.
The Company must promptly publicly disclose the decision(s)
of the Board of Directors by a press release and a filing with the SEC and the applicable securities commissions or similar regulatory
authorities in Canada. If the director’s tendered resignation is not accepted by the deciding committee or the director does
not submit his or her resignation to the Board of Directors, such director will continue to serve until his or her successor is
duly elected, or his or her earlier resignation or removal. If the director’s resignation is accepted by the deciding committee,
or if a nominee for director is not elected and the nominee is not an incumbent director, then the Board of Directors, in its sole
discretion, may fill any resulting vacancy.
Director Orientation and Continuing Education
The Company provides access to appropriate orientation programs,
sessions or materials for new members of the Board of Directors for their benefit either prior to or within a reasonable period
of time after their nomination or election to the Board of Directors, which include written materials and presentations by senior
management regarding the directors’ legal and ethical responsibilities; our strategic plans, principal operating risks and
financial statements; the material factors that affect our performance; the operation, significance and effects of incentive compensation
programs and related party transactions; and other key policies and practices. Continuing education is provided through a number
of opportunities, including visits to our operating locations, strategic and financial presentations by members of senior and regional
management, and periodic presentations by outside experts on topics of interest. Directors are also encouraged, but not required,
to participate in outside continuing education programs.
Communications with the Board of Directors
Shareholders and other interested parties may communicate
with the Board of Directors generally, with the non-employee directors as a group or with a specific director at any time by writing
to the Board of Directors, the non-employee directors or a specific director, care of the Secretary, at our principal administrative
offices located at Waste Connections, Inc., 3 Waterway Square Place, Suite 110, The Woodlands, Texas 77380. The Secretary will
forward all communications to the Board of Directors, the non-employee directors or a specific director, as applicable, as soon
as practicable after receipt without screening the communication. Shareholders and other
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 12
interested parties are requested to provide their contact
information and to state the number of Common Shares that they beneficially own in their communications to the Board of Directors.
Because other appropriate avenues of communication exist for matters that are not of shareholder interest, such as general business
complaints or employee grievances, shareholders and other interested parties are urged to limit their communications to the Board
of Directors to matters that are of shareholder interest and that are appropriate for consideration by the Board of Directors.
Shareholder Outreach
We believe that our relationship with and accountability to
shareholders are critical to our success. Engaging with our shareholders helps us to understand how they view us, to set goals
and expectations for our performance, and to identify emerging issues that may affect our strategies, sustainability initiatives,
corporate governance, compensation practices or other aspects of our operations. Our shareholder and investor outreach includes
investor road shows, analyst meetings, investor meetings and investor conferences, either virtually or in person. We also communicate
with shareholders and other interested parties through various media, including our annual and quarterly reports, sustainability
reports, proxy statements and other SEC and Canadian securities filings, press releases and our website. Our conference calls for
quarterly earnings releases and major corporate developments are open to all. These calls are available in real time and are also
archived as webcasts on our website. Our President and CEO, Chief Financial Officer and other senior management also regularly
engage with investors to discuss our strategy, financial and business performance, and ESG efforts and to update investors on key
developments.
Position Descriptions
Written position descriptions for the Board Chairman, the
lead independent director and each of the committee chairs, as well as a position description for the CEO of the Company, have
been approved by the Board of Directors.
Diversity Policy
The Company believes that diversity, and specifically gender
diversity, is an important consideration in determining the composition of its Board of Directors and senior management and is
committed to increasing the diversity of the Board of Directors and senior management over time by actively seeking qualified candidates
who satisfy diversity objectives, among other criteria. A truly diverse Board of Directors and senior management will include and
utilize differences in skills, expertise, and industry experience, as well as gender, race, ethnicity, religion, sexual orientation,
physical ability, age and other distinctions to bring diverse perspectives to the decision-making process and help foster an inclusive
workplace.
In October 2019, the Board of Directors adopted a Policy Regarding
Diversity on the Board of Directors and in Senior Management Positions (the “Diversity Policy”) to formalize the Company’s
belief that diversity is an important consideration in determining the composition of the Board of Directors and senior management.
The Diversity Policy sets out specific roles and responsibilities of the Nominating and Corporate Governance Committee in recommending
diverse candidates after considering a wide range of diversity criteria to ensure the Board of Directors, as a whole, and senior
management reflect a range of viewpoints, backgrounds, skills and experience. In particular, the Diversity Policy emphasizes the
importance of gender diversity and the role of women with relevant skills and experience in contributing to a diversity of perspective
on the Board and senior management.
The Diversity Policy sets out various objectives of the Nominating
and Corporate Governance Committee in order to achieve the Company’s commitment to increasing diversity, including the development
of recruitment and selection protocols to give due consideration to the benefits of diversity and ensure candidates of diverse
groups, knowledge and viewpoints are included in any director and senior management search. These protocols include considering
the level of representation of women on the Board of Directors and senior management and directing any third-party search firm
engaged by the Company to include diverse candidates, and in particular women, on the short list of candidates being considered
in order to support the specific objective of gender diversity.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 13
The Nominating and Corporate Governance Committee conducts
periodic reviews of the Company’s recruitment and selection protocols for Board members and senior management (including
executive officers, as defined by applicable Canadian securities laws), including the Company’s existing protocols for internal
promotion and leadership development, as part of its annual review process. This review process aims to ensure that diversity remains
a component of any director or senior management search and that existing protocols continue to promote diversity within the Company.
The success of the Diversity Policy is measured by assessing whether the Board and senior management is composed of highly qualified
individuals that possess a balance of skills, experience, expertise and a diversity of perspectives that are relevant to the Company’s
business and its strategic objectives and determining whether the Company is meeting the aspirational targets set out in the Diversity
Policy.
The Company continues its efforts to identify additional women
candidates for consideration as members of the Board of Directors and in senior management positions, such as the appointment of
Ms. Jordan as the second woman elected to the Board and, in 2021, the promotion of Ms. Whitney to Executive Vice President and
Chief Financial Officer from Senior Vice President and Chief Financial Officer. In October 2019, the Company established its aspirational
target of women representing at least 30% of independent Board of Directors members by 2020, which was achieved in August 2019
following the appointment of Ms. Jordan to the Board of Directors. In addition, the Company has established an aspirational target
of women representing at least 30% of the total Board of Directors by 2024. Currently, two out of eight members of our Board of
Directors are women, representing 33% of independent Board members and 25% of total Board members, and the director nominees for
the Meeting include two women.
Although the Diversity Policy does not specify a formal target
regarding the representation of women in senior management or executive officer positions, we are committed to increasing the diversity
– including gender diversity – of our executive team over time, ensuring that the most qualified candidates are selected
as circumstances dictate and the Company’s needs evolve. Diversity is one of a number of factors (which include leadership
capabilities, mature judgment, merit, an objective perspective, practical wisdom, talent, experience (including time with the Company),
expertise, strategic/innovative thinking, skills and knowledge that are useful to the oversight of our business) that are considered
in selecting the best candidates for executive officer appointments. We believe that a less formulaic approach, together with a
rigorous search that seeks to include diverse and qualified candidates based on the relevant qualifications and criteria, will
best serve the Company’s needs. Currently, there are two women who are executive officers (as defined under applicable Canadian
securities laws) of the Company, or 16.6% of our executive officers.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 14
DIRECTOR COMPENSATION AND EQUITY OWNERSHIP
Annual Retainer and Equity Grants
All of our non-employee directors are paid an annual cash
retainer and receive deferred share units, or DSUs. The amount of such director compensation is determined on an annual basis by
the Board of Directors. A supplemental annual cash retainer is also paid to committee chairs. Directors who are officers or employees
of the Company do not receive any compensation as directors or for attending meetings of the Board of Directors or its committees.
The Compensation Committee periodically engages its independent
compensation consultant to review director compensation using the same peer group used to benchmark executive compensation. The
principal features of the compensation received by our non-employee directors for fiscal year 2020 are described below.
|
Type
of Fee
|
|
|
|
|
Annual
Cash Retainer
|
|
$
|
100,000
|
|
|
Committee
Chair Cash Retainers:
|
|
|
|
|
|
Audit
|
|
$
|
25,000
|
|
|
Compensation
|
|
$
|
25,000
|
|
|
Nominating &
Corporate Governance
|
|
$
|
15,000
|
|
|
Target
DSU/RSU Grant
|
|
CAD$
|
210,000
|
|
Non-employee directors may elect, irrevocably and in advance,
to receive up to CAD$150,000 of their director grant in restricted share units, or RSUs, that are settled in Common Shares, with
the remainder to be received in the form of DSUs. RSUs received in payment of the director grant vest in two equal installments
on the grant date and the first anniversary of the grant date.
Pursuant to the participation letter agreement under the Separation
Benefits Plan that was entered into on July 25, 2019, with Mr. Mittelstaedt, as Executive Chairman, Mr. Mittelstaedt’s
annual base salary is $500,000, his target annual cash bonus is 50% of his base salary, and the target amount of his annual equity
awards is expected to be equal to 100% of his base salary (with RSUs constituting 50% of the total equity grant awarded, and PSUs
constituting the remaining 50%).
The following table provides compensation information for
the year ended December 31, 2020, for each non-employee member of our Board of Directors and Mr. Mittelstaedt as Executive Chairman
of the Board of Directors.
|
Name
|
|
Fees
Earned
or Paid in
Cash
($)(1)
|
|
|
Share
Awards
($)(1)(2)
|
|
|
All
Other
Compensation
($)(1)(3)
|
|
|
Total
($)(1)
|
|
|
Edward E. “Ned”
Guillet
|
|
|
115,000
|
|
|
|
158,414
|
|
|
|
–
|
|
|
|
273,414
|
|
|
Michael W. Harlan
|
|
|
125,000
|
|
|
|
158,414
|
|
|
|
–
|
|
|
|
283,414
|
|
|
Larry S. Hughes
|
|
|
–
|
(4)
|
|
|
158,414
|
|
|
|
–
|
|
|
|
158,414
|
|
|
Elise L. Jordan
|
|
|
100,000
|
|
|
|
158,414
|
|
|
|
–
|
|
|
|
258,414
|
|
|
Susan “Sue” Lee
|
|
|
100,000
|
|
|
|
158,414
|
|
|
|
–
|
|
|
|
258,414
|
|
|
Ronald J. Mittelstaedt
|
|
|
750,000
|
|
|
|
550,193
|
(5)
|
|
|
–
|
|
|
|
1,300,193
|
|
|
William J. Razzouk
|
|
|
125,000
|
|
|
|
158,414
|
|
|
|
–
|
|
|
|
283,414
|
|
|
(1)
|
Ms. Lee and Mr. Hughes
received their compensation in Canadian currency. For purposes of this presentation, Canadian dollar amounts have been converted
to U.S. dollars based on the Bank of Canada average rate of exchange for the period from January 1, 2020, to December 31,
2020, CAD$1.00 = US$0.7454.
|
|
(2)
|
In February 2020, each
of our non-employee directors received a grant of 1,090 RSUs with a grant date fair value of $113,153 and a grant of 436 DSUs
with a grant date fair value of $45,261, each as shown in the “Share Awards” column. The amount shown for each
non-employee director is the grant date fair value of the 2020 awards computed in accordance with generally accepted accounting
principles in the U.S., excluding estimates of forfeitures related to service-based vesting conditions. A discussion of the
fair value of share awards is set forth under Note 1 of the Notes to Consolidated Financial Statements included in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC and the securities commissions or similar
regulatory authorities in Canada on February 18, 2021.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 15
|
|
The table below shows the aggregate number of unvested share awards (in the form of
RSUs, PSUs and DSUs, as applicable) outstanding for each non-employee director and the Executive Chairman as of December 31,
2020.
|
|
Name
|
|
Aggregate
Restricted Share
Unit Awards
Outstanding as
of December 31,
2020 (#)
|
|
|
Aggregate
Performance
Share Unit Awards
Outstanding as
of December 31,
2020 (#)
|
|
|
Aggregate
Deferred Share
Unit Awards
Outstanding as
of December 31,
2020 (#)
|
|
|
Edward E. “Ned” Guillet
|
|
|
545
|
|
|
|
–
|
|
|
|
2,446
|
|
|
Michael W. Harlan
|
|
|
545
|
|
|
|
–
|
|
|
|
2,446
|
|
|
Larry S. Hughes
|
|
|
545
|
|
|
|
–
|
|
|
|
7,837
|
|
|
Elise L. Jordan
|
|
|
545
|
|
|
|
–
|
|
|
|
940
|
|
|
Susan “Sue” Lee
|
|
|
545
|
|
|
|
–
|
|
|
|
5,471
|
|
|
Ronald J. Mittelstaedt
|
|
|
72,118
|
|
|
|
27,533
|
|
|
|
–
|
|
|
William J. Razzouk
|
|
|
545
|
|
|
|
–
|
|
|
|
2,446
|
|
|
(3)
|
None of the non-employee
directors nor Mr. Mittelstaedt received perquisites or other personal benefits in an aggregate amount of $10,000 or more.
We reimburse directors for transportation, lodging and other expenses actually incurred in attending Board and committee meetings
and other Company-related events.
|
|
(4)
|
Mr. Hughes irrevocably
waived his entitlement to the $100,000 annual cash retainer for the year ended December 31, 2020, prior to the date that he
would have otherwise been entitled to be paid such amount. Mr. Hughes requested that the Company direct an equivalent amount
toward the Waste Connections Scholarship Program.
|
|
(5)
|
In February 2020, Mr.
Mittelstaedt received a grant of 2,650 RSUs with a grant date fair value of $275,097 and a grant of 2,650 PSUs with a grant
date fair value of $275,097, each as shown in the “Share Awards” column. The actual equity grant for Mr. Mittelstaedt
exceeded the recommended target by approximately 9.0% due to an increase in the value of the Company’s share price prior
to the grant date. The amount shown for Mr. Mittelstaedt is the grant date fair value of the 2020 awards computed in accordance
with generally accepted accounting principles in the U.S., excluding estimates of forfeitures related to service-based vesting
conditions. A discussion of the fair value of share awards is set forth under Note 1 of the Notes to Consolidated Financial
Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC and
the securities commissions or similar regulatory authorities in Canada on February 18, 2021. If the first-year performance
hurdle is satisfied, annual RSU awards vest in four substantially equal annual installments beginning on the first anniversary
of the grant date.
|
Non-Employee Director and Executive Chairman Equity Ownership
Non-employee directors of the Company and the Executive Chairman
are required to hold shares having a market value of at least $300,000, or three times the annual cash retainer. Non-employee directors
have five years from the fiscal year end following initial election to the Board of Directors to accumulate the share ownership
prescribed by the guidelines. For purposes of the calculation, shares deemed “beneficially owned” by the non-employee
directors and the Executive Chairman within the meaning of the rules of the SEC, as well as DSUs and RSUs subject to time-based
vesting held by the non-employee director and the Executive Chairman, as applicable, and vested or time-based unvested DSUs and
RSUs or resulting shares deposited into a deferred compensation plan or arrangement, are included in the calculation of the amount
of such individual’s ownership. As of the date of this Proxy Statement, all of our non-employee directors (other than Ms.
Jordan, who joined the Board of Directors in 2019) and the Executive Chairman exceeded the requirements of our share ownership
guidelines.
Non-employee directors and the Executive Chairman held the
following Common Shares, DSUs and unvested RSUs as of March 16, 2021, the Record Date for the Meeting.
|
Name
|
|
Common
Shares
|
|
DSUs
|
|
Unvested
RSUs
|
|
Deferred
RSUs
|
|
Total
|
|
Equity Ownership
Guideline Met
|
|
|
Edward E. “Ned”
Guillet
|
|
32,342
|
|
2,922
|
|
594
|
|
–
|
|
35,858
|
|
|
|
|
Michael W.
Harlan
|
|
7,994
|
|
2,922
|
|
594
|
|
–
|
|
11,510
|
|
|
|
|
Larry S. Hughes
|
|
10,126
|
|
8,313
|
|
594
|
|
–
|
|
19,033
|
|
|
|
|
Elise L. Jordan
|
|
1,385
|
|
1,416
|
|
594
|
|
–
|
|
3,395
|
|
|
|
|
Susan “Sue”
Lee
|
|
10,398
|
|
5,947
|
|
594
|
|
–
|
|
16,939
|
|
|
|
|
Ronald J. Mittelstaedt
|
|
190,201
|
|
–
|
|
4,267
|
|
57,449
|
|
251,917
|
|
|
|
|
William J.
Razzouk
|
|
15,088
|
|
2,922
|
|
594
|
|
–
|
|
18,604
|
|
|
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 16
Directors’ Deferred Share Unit Plan
DSUs are notional units that have the same value as Common
Shares, and therefore have the same upside and downside risk as to value, but do not give the holder voting or other shareholder
rights. Awarding DSUs to non-employee directors serves to align the interests of non-employee directors with those of shareholders.
DSUs are redeemed and settled for cash or shares at the discretion of the Company, only when the non-employee director leaves the
Board of Directors, and the redemption value of a DSU is equal to the market value of a Common Share at the date of redemption,
less applicable withholdings.
Non-employee directors may elect, irrevocably and in advance,
to receive all or part of their director and committee chair cash retainers either in cash or DSUs. They may also elect, irrevocably
and in advance, to receive up to CAD$150,000 of their upcoming equity grants in RSUs that are settled in Common Shares, with the
remainder of such compensation to be received in the form of DSUs. Notional DSUs are credited to an account for each non-employee
director and held until the non-employee director leaves the Board of Directors.
DSUs earn dividend equivalents at the same rate as dividends
are paid on Common Shares. upon redemption and settlement, DSU holders are credited with additional DSUs that are equivalent in
value to the dividends declared on the Common Shares. The number of DSUs is calculated using the same rate as for the dividends
paid on the Common Shares.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 17
|
PROPOSAL 1
|
ELECTION
OF DIRECTORS
|
The Board of Directors is composed of eight directors. At
the Meeting, you will be asked to elect each of the eight current directors to serve until the close of business of the 2022 Annual
Meeting of Shareholders of the Company or until any such director’s earlier resignation, or his or her successor is duly
elected or appointed.
The election of each director nominee may be approved by
any one or more shareholders voting “FOR” each such director nominee (i.e., a plurality vote). You may either vote
“FOR” or “WITHHOLD” your vote with respect to the election of each director nominee. If you vote “FOR”
the election of a nominee, your vote will be cast accordingly. If you select “WITHHOLD” with respect to the election
of a nominee, your vote will not be counted as a vote cast for the purposes of electing such nominee but will be considered in
the application of the majority voting policy included in our Corporate Governance Guidelines and Board Charter. Pursuant to our
majority voting policy, a “WITHHOLD” vote is considered a vote cast for purposes of the election of the director nominee
and is equivalent to a vote against the nominee. Pursuant to the Company’s Corporate Governance Guidelines and Board Charter,
each director of the Company must be elected by a “majority of the votes cast” with respect to his or her election.
A “majority of the votes cast” means that the number of shares voted “for” a director’s election
exceeds 50% of the number of votes cast with respect to that director’s election. Votes cast with respect to that director’s
election will include votes to withhold authority, but will exclude abstentions, broker non-votes, and failures to vote with respect
to that director’s election. See “Majority Voting for Directors” on page 12 of this Proxy Statement.
Proxies will be voted, unless otherwise indicated, for the
election of all eight nominees to our Board of Directors. Proxies will be voted in a discretionary manner if any of the eight
nominees is unable to serve.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT SHAREHOLDERS VOTE “FOR” THE
ELECTION OF EACH OF THE EIGHT NOMINEES TO THE BOARD OF DIRECTORS.
|
|
RONALD
J. MITTELSTAEDT
|
|
EXECUTIVE
CHAIRMAN
Waste Connections, Inc.
|
|
Age 57
California, U.S.A.
Director
since:
September 1997
NOT Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Executive
Committee
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED: 190,201
|
|
|
|
|
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Mittelstaedt has been Executive Chairman of Waste Connections
since July 2019. From the Company’s formation in 1997 to that date, he served as Chief Executive Officer of Waste Connections.
Mr. Mittelstaedt has served as a director of Waste Connections since its formation, and was elected Chairman in January 1998.
Mr. Mittelstaedt also served as President of Waste Connections from its formation through August 2004. Mr. Mittelstaedt has more
than 32 years of experience in the solid waste industry. Under Mr. Mittelstaedt’s leadership, the Company became the third
largest company in the North American solid waste and recycling industry, employing nearly 19,000 people across the U.S. and Canada.
Mr. Mittelstaedt also established the RDM Positive Impact Foundation in 2004 to improve the lives of underprivileged and at-risk
children. Prior to his career in the solid waste and recycling industry, he spent three years in the air freight industry. Mr.
Mittelstaedt serves as a director for SkyWest, Inc. and is also a director for Pride Industries, a non-profit organization which
provides manufacturing, supply chain, logistics and facilities services to public and private organizations nationwide, while
creating jobs for people with disabilities. Mr. Mittelstaedt holds a B.A. degree in Business Economics with a finance emphasis
from the University of California at Santa Barbara.
We believe that Mr. Mittelstaedt’s qualifications
to serve on our Board of Directors include his extensive experience in the solid waste industry, including as our founder, our
CEO from the formation of the Company until July 2019, and a director since the Company was formed in 1997 and our Board Chairman
since 1998.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 18
|
EDWARD
E. “NED” GUILLET
|
|
CORPORATE
DIRECTOR/CONSULTANT
|
|
|
|
Age 69
California, U.S.A.
Director since:
March 2007
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Compensation Committee
|
|
|
|
■
|
Nominating and Corporate Governance Committee
|
|
|
|
|
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 35,264
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Guillet has been an independent freelance human resources
consultant since January 2007. From October 2005 until December 2006, he was Senior Vice President, Human Resources for the Gillette
Global Business Unit of The Procter & Gamble Company, a position he held subsequent to the merger of Gillette with Procter
& Gamble. From July 2001 until September 2005, Mr. Guillet was Senior Vice President and Chief Human Resources Officer and
an executive officer of The Gillette Company, a global consumer products company. He joined Gillette in 1974 and held a broad
range of leadership positions in its human resources department. From 2008 to 2019, Mr. Guillet served as a Director of CCL Industries
Inc., the largest label company in the world providing innovative solutions to the Home & Personal Care, Food & Beverage,
Healthcare & Specialty, Automotive, Electronic & Consumer Durables and Retail & Apparel markets worldwide, where
he also served as the Chairman of the Board of Directors’ Human Resources Committee and as a member of its Nominating &
Governance Committee. Mr. Guillet is a former member of Boston University’s Human Resources Policy Institute. He holds a
B.A. degree in English Literature and Secondary Education from Boston College.
We believe that Mr. Guillet’s qualifications to serve
on our Board of Directors include his past experience on our Board of Directors, his substantial experience with human resources
and personnel development matters, and the positions he has held with other publicly-traded companies (including a publicly-traded
company in Canada).
|
MICHAEL
W. HARLAN
|
|
CHAIRMAN
& CHIEF EXECUTIVE OFFICER
|
|
TruHorizon
Environmental Solutions
|
|
Age 60
Texas, U.S.A.
Director since:
May 1998
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Audit Committee
|
|
|
|
■
|
Executive Committee
|
|
|
|
■
|
Nominating and Corporate Governance Committee
|
|
|
|
|
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 10,916
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Harlan is the Chairman of the Board of Directors and
Chief Executive Officer of Principal Environmental, L.L.C., doing business as TruHorizon Environmental Solutions, a privately-held
company that provides environmental regulatory compliance services, and a position he has held since September 2013. Mr. Harlan
joined the Board of Directors of Brewer Crane Holdings, LLC, in July 2018. Brewer Crane is a privately-held company that provides
customers in Southern California with a wide range of crane, rigging, trucking, and construction services. In July 2020, Mr. Harlan
joined the Board of Directors of WiMi Hologram Cloud, Inc. (NASDAQ: WIMI), a publicly-traded provider of integrated holographic
augmented reality applications in China. Since September 2011, he is the founder and has served as President of Harlan Capital
Advisors, LLC, a private consulting firm focused on advising companies on operational matters, strategic planning, mergers and
acquisitions, debt and equity investments, and capital raising initiatives. Prior to forming Harlan Capital Advisors, Mr. Harlan
held numerous positions at U.S. Concrete, Inc. (NASDAQ: USCR), a publicly-traded producer of concrete, aggregates and related
concrete products, including most recently as its President and Chief Executive Officer from May 2007 until August 2011, and as
a Director from June 2006 until August 2011. He has previously served on the Board of Directors for several public and private
companies and currently serves on the University of Houston Honors College Advisory Board. Prior to founding U.S. Concrete in
August 1998, Mr. Harlan held several senior financial positions with publicly-traded companies, including chief financial officer,
treasurer and controller. Mr. Harlan began his career with an international public accounting firm. Mr. Harlan is a Certified
Public Accountant and graduated magna cum laude from the University of Mississippi with a Bachelor of Accounting degree.
We believe that Mr. Harlan’s qualifications to serve
on our Board of Directors include his past experience on our Board of Directors, his substantial experience in the solid waste
industry, his significant experience in accounting and financial matters, including his extensive experience as a certified public
accountant, his substantial experience with growth-oriented companies, and his prior experience as a director of other publicly-traded
companies.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 19
|
LARRY
S. HUGHES
|
|
CORPORATE
DIRECTOR
|
|
|
|
|
|
|
|
Age 69
British Columbia, Canada
Director since:
May 2014
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Audit Committee
|
|
|
|
■
|
Executive
Committee
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 18,439
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Hughes is a retired executive and former lawyer who
currently provides consulting and advisory services. In June 2017, Mr. Hughes retired as an executive of West Fraser Timber Co.
Ltd. (TSX/NYSE: WFG), an integrated wood products company headquartered in Vancouver, B.C. in Canada. Mr. Hughes served as West
Fraser’s Senior Vice- President from 2007 to 2011 with oversight of strategic planning, legal, environmental and safety
matters. He served as Vice-President, Finance and Chief Financial Officer from 2011 to 2017 with oversight of financial and accounting
matters as well as strategic planning, investor relations, corporate governance and pension matters. Prior to joining West Fraser
Mr. Hughes had a successful 27-year career as a business lawyer in private practice in Vancouver. He served as a Director of Progressive
Waste Solutions Ltd. from May 2014 until May 2016.(2)
We believe that Mr. Hughes’ qualifications to serve
on our Board of Directors include his past experience on our Board of Directors, his significant experience in corporate financial,
governance and legal matters, his experience with companies having operations in both the U.S. and Canada, and his experience
as an officer of another publicly-traded company in Canada.
|
|
|
|
|
|
|
WORTHING
F. JACKMAN
|
|
PRESIDENT AND CHIEF EXECUTIVE
OFFICER
Waste Connections, Inc.
|
|
Age 56
Texas, U.S.A.
Director since:
July 2019
NOT Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED: 122,906
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BIOGRAPHY:
Worthing F. Jackman has been President and Chief Executive
Officer of Waste Connections since July 2019. From July 2018 to that date, he served as President of Waste Connections. Mr. Jackman
served as Executive Vice President and Chief Financial Officer of Waste Connections from September 2004 to July 2018. From April
2003 to September 2004, Mr. Jackman served as Vice President – Finance and Investor Relations of Waste Connections. Mr.
Jackman held various investment banking positions with Alex. Brown & Sons, now Deutsche Bank Securities, Inc., from 1991 through
2003, including most recently as a Managing Director within the Global Industrial & Environmental Services Group. In that
capacity, he provided capital markets and strategic advisory services to companies in a variety of sectors, including solid waste
services. Mr. Jackman serves as a director for Quanta Services, Inc. He holds a B.S. degree in Finance from Syracuse University
and an M.B.A. from the Harvard Business School.
We believe that Mr. Jackman’s qualifications to serve
on our Board of Directors include his extensive experience in the solid waste industry, including his senior leadership roles
within the Company since 2003 and as our President and Chief Executive Officer and a director since July 2019.
|
(2)
|
In 2016, Waste Connections, Inc., a Delaware
corporation, entered into a business combination transaction with Progressive Waste Solutions
Ltd., a corporation organized under the laws of Ontario, Canada (“Progressive Waste”
and the transaction, the “Progressive Waste acquisition”). The public company
that remained following the transaction is Waste Connections, Inc., a corporation organized
under the laws of Ontario, Canada. References to the “Company” and “Waste
Connections” refer to the Delaware corporation, Waste Connections, Inc. (now known
as Waste Connections US, Inc.) before the Progressive Waste acquisition and the combined
business thereafter.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 20
|
ELISE
L. JORDAN
|
|
EXECUTIVE
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
|
|
FedEx
Express
|
|
|
|
|
|
Age 61
Tennessee, U.S.A.
Director since:
August 2019
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Audit Committee
|
|
|
|
■
|
Nominating
and Corporate Governance Committee
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 2,801
|
|
|
|
|
|
|
BIOGRAPHY:
Ms. Jordan is Executive Vice President and CFO of FedEx
Express, the largest transportation company in the FedEx Corp. (NYSE: FDX) enterprise with $38 billion in annual revenues and
over 235,000 team members worldwide. In that capacity, she is responsible for worldwide financial affairs, including financial
planning, reporting and analysis, long-range strategic planning, and regional accounting and controls. Prior to her current position,
Ms. Jordan served as Senior Vice President, Strategic and Financial Planning and Analysis and Business Systems; Vice President,
FedEx Express Financial Planning; Managing Director, Global Financial Planning; and Manager, Corporate/Domestic Business Planning.
She joined FedEx in 1983 as an Operations Analyst. Before joining FedEx, Ms. Jordan served as a Staff Auditor for Arthur Andersen
LLC. Ms. Jordan earned her MBA from the University of Memphis and her BBA in Accounting from the University of Texas in Austin.
We believe that Ms. Jordan’s qualifications to serve
on our Board of Directors include her significant experience in accounting, corporate finance, technology and governance, her
senior positions within a multi-national logistics company, and her experience as an officer of another publicly-traded company.
|
SUSAN
“SUE” LEE
|
|
CORPORATE
DIRECTOR
|
|
|
|
|
|
|
|
|
Age 69
British Columbia, Canada
Director since:
May 2014
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Compensation
Committee
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 16,345
|
|
|
|
|
|
BIOGRAPHY:
Ms. Lee has been a corporate director since November 2011.
She retired from Suncor Energy Inc., an integrated energy company, in April 2012, where she last served as Senior Vice-President,
Human Resources and Communications. During her 16 years with Suncor, her responsibilities included executive compensation and
succession planning, governance, merger strategy and integration, and stakeholder and government relations. Prior to joining Suncor,
Ms. Lee had a 14-year career in human resources at TransAlta Corp. Ms. Lee has been a Director of Empire Company Limited, a food
retailing business, since 2014, where she also serves as a member of the Board of Directors’ Human Resources Committee.
Ms. Lee served as a Director of Bonavista Energy Corporation from November 2013 to December 2017 and as a Director of Progressive
Waste Solutions Ltd. from May 2014 until May 2016. She has also served on a number of prominent boards in Canada, such as the
Suncor Energy Foundation, Holcim Canada, Altalink, the University of Calgary Board of Governors and the Women’s Executive
Network Top 100 Women Advisory Board. In 2007, Ms. Lee was an inaugural inductee into the Hall of Fame for Canada’s Top
100 Most Powerful Women.
We believe that Ms. Lee’s qualifications to serve
on our Board of Directors include her past experience on our Board of Directors, her substantial experience with human resources
and talent management and development matters, her substantial experience in the energy industry, the positions she has held with
other publicly-traded companies in Canada and her experience as a director of other publicly-traded companies in Canada.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 21
|
WILLIAM
J. RAZZOUK
|
|
CORPORATE
DIRECTOR
|
|
|
|
Age 73
Florida, U.S.A.
Director since:
January 1998
Independent
|
|
BOARD/COMMITTEE
MEMBERSHIP:
|
BOARD
& COMMITTEE ATTENDANCE IN 2020: 100%
|
|
|
■
|
Board
|
|
|
|
■
|
Audit Committee
|
|
|
|
■
|
Compensation Committee
|
|
|
|
|
|
COMMON
SHARES OWNED OR CONTROLLED, INCLUDING DSUs: 18,010
|
|
|
|
|
|
|
BIOGRAPHY:
Mr. Razzouk has been a corporate director since October
2017. From March 2005 to October 2017, Mr. Razzouk served as the Chairman and a Director of Newgistics, Inc., a provider of intelligent
order delivery and returns management solutions for direct retailers and technology companies. From March 2005 to December 2015,
he also served as the President and Chief Executive Officer of Newgistics, Inc. From August 2000 to December 2002, he was a Managing
Director of Paradigm Capital Partners, LLC, a venture capital firm in Memphis, Tennessee focused on meeting the capital and advisory
needs of emerging growth companies. From September 1998 to August 2000, he was Chairman of PlanetRx.com, an e-commerce company
focused on healthcare and sales of prescription and over-the-counter medicines, health and beauty products and medical supplies.
He was also Chief Executive Officer of PlanetRx.com from September 1998 until April 2000. From April 1998 until September 1998,
Mr. Razzouk owned a management consulting business and an investment company that focused on identifying strategic acquisitions.
From September 1997 until April 1998, he was the President, Chief Operating Officer and a Director of Storage USA, Inc., a then
publicly-traded (now privately held) real estate investment trust that owned and operated more than 350 mini storage warehouses.
He served as the President and Chief Operating Officer of America Online from February 1996 to June 1996. From 1983 to 1996, Mr.
Razzouk held various management positions at Federal Express Corporation, most recently as Executive Vice President, Worldwide
Customer Operations, with full worldwide P&L responsibility. Mr. Razzouk previously held management positions at ROLM Corporation,
Philips Electronics and Xerox Corporation. He previously was a Director of Fritz Companies, Inc., Sanifill, Inc., Cordis Corp.,
Storage USA, PlanetRx.com, America Online and La Quinta Motor Inns. Mr. Razzouk holds a Bachelor of Journalism degree from the
University of Georgia.
We believe that Mr. Razzouk’s qualifications to serve
on our Board of Directors include his past experience on our Board of Directors, his significant experience in corporate financial
matters, his experience in the solid waste industry, his substantial experience with growth-oriented companies, and his prior
experience as a director of other publicly-traded companies.
Public Company Board Memberships
Under the terms of our Corporate Governance Guidelines and
Board Charter, directors who also serve as chief executive officers or in equivalent positions at any company should not serve
on more than two boards of public companies in addition to our Board of Directors, and other directors should not serve on more
than four other boards of public companies in addition to our Board of Directors.
Additionally, our Audit Committee Charter specifies that
directors may not simultaneously serve on the audit committees of more than two other public companies unless our Board of Directors
first determines such service will not impair the ability of the director to serve effectively on our Audit Committee.
The table below sets forth the other reporting issuers for
which the Company’s directors serve as directors and the stock exchanges on which such issuers are listed.
|
Nominee
|
Public
Company
|
Exchange
|
|
Ronald
J. Mittelstaedt
|
SkyWest, Inc.
|
NASDAQ
|
|
Michael
W. Harlan
|
WiMi Hologram
Cloud Inc.
|
NASDAQ
|
|
Worthing
F. Jackman
|
Quanta Services,
Inc.
|
NYSE
|
|
Susan
“Sue” Lee
|
Empire Company
Limited
|
TSX
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 22
SHARE OWNERSHIP
Share Ownership of Five Percent Shareholders
The following table shows ownership information for any
person or company known by our directors and executive officers to beneficially own, or control or direct, directly or indirectly,
5% or more of the Common Shares. This information is presented as of the Record Date for the Meeting.
|
Name
of Beneficial Owner
|
Number of Outstanding
Common Shares
Beneficially Owned(1)
|
Percent
of Class
|
|
T.
Rowe Price Associates, Inc.(2)
|
28,255,228
|
10.7%
|
|
The
Vanguard Group(3)
|
26,074,347
|
9.9%
|
|
(1)
|
Beneficial ownership is determined in accordance
with the rules of the SEC. In general, a person who has voting power and/or investment power with respect to securities is
treated as the beneficial owner of those securities. Except as otherwise indicated by footnote, the Company believes that
the persons named in this table have sole voting and investment power with respect to the Common Shares shown.
|
|
(2)
|
The share ownership of T. Rowe Price Associates,
Inc. is based on a Schedule 13G/A filed with the SEC on February 10, 2021. T. Rowe Price Associates has sole voting power
with respect to 8,516,509 Common Shares and sole dispositive power with respect to 28,255,228 Common Shares. The address of
T. Rowe Price Associates, Inc. is 100 E. Pratt Street, Baltimore, Maryland 21202.
|
|
(3)
|
The share ownership of The Vanguard Group
is based on a Schedule 13G/A filed with the SEC on February 10, 2021. The Vanguard Group has sole voting power with respect
to zero Common Shares and sole dispositive power with respect to 24,843,174 Common Shares. The address of The Vanguard Group
is 100 Vanguard Blvd., Malvern, Pennsylvania 19355.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 23
Share Ownership of the Board of Directors and Corporate
Officers
The following table sets forth information known to the
Company concerning Common Shares beneficially owned, as of March 16, 2021, the Record Date for the Meeting, by (i) each director
of the Company; (ii) each named executive officer of the Company; and (iii) all corporate officers and directors of the Company
as a group. These individuals, both individually and in the aggregate, own less than 1% of our outstanding Common Shares as of
the Record Date for the Meeting.
|
Beneficial
Owner(1)
|
|
Amount
and
Nature of
Beneficial
Ownership(2)
|
|
|
Vested Restricted
Share Units
Held Under
Nonqualified
Deferred
Compensation
Plan(3)
|
|
|
Total
|
|
|
Ronald J. Mittelstaedt
|
|
|
190,201
|
(4)
|
|
|
57,449
|
|
|
|
247,650
|
|
|
Worthing F. Jackman
|
|
|
122,906
|
|
|
|
—
|
|
|
|
122,906
|
|
|
Darrell W. Chambliss
|
|
|
107,446
|
|
|
|
—
|
|
|
|
107,446
|
|
|
Mary Anne Whitney
|
|
|
47,308
|
|
|
|
—
|
|
|
|
47,308
|
|
|
James M. Little
|
|
|
37,252
|
(5)
|
|
|
—
|
|
|
|
37,252
|
|
|
Edward E. “Ned” Guillet
|
|
|
32,342
|
|
|
|
—
|
|
|
|
32,342
|
|
|
Patrick J. Shea
|
|
|
27,620
|
|
|
|
—
|
|
|
|
27,620
|
|
|
William J. Razzouk
|
|
|
15,088
|
|
|
|
—
|
|
|
|
15,088
|
|
|
Susan “Sue” Lee
|
|
|
10,398
|
|
|
|
—
|
|
|
|
10,398
|
|
|
Larry S. Hughes
|
|
|
10,126
|
|
|
|
—
|
|
|
|
10,126
|
|
|
Michael W. Harlan
|
|
|
7,994
|
|
|
|
—
|
|
|
|
7,994
|
|
|
Elise L. Jordan
|
|
|
1,385
|
|
|
|
—
|
|
|
|
1,385
|
|
|
ALL CORPORATE OFFICERS AND DIRECTORS AS A GROUP (27 PERSONS)
|
|
|
843,173
|
|
|
|
64,164
|
|
|
|
907,337
|
|
|
(1)
|
Beneficial ownership is determined
in accordance with the rules of the SEC. In general, a person who has voting power and/or investment power with respect to
securities is treated as the beneficial owner of those securities. Except as otherwise indicated by footnote, and subject
to applicable community property laws, the Company believes that the beneficial owners of the Common Shares, based on information
furnished by such owners, have sole investment power and voting power with respect to such shares.
|
|
(2)
|
Common Shares subject to share options
and/or warrants currently exercisable or exercisable within 60 days after March 16, 2021, Common Shares into which convertible
securities are convertible within 60 days after March 16, 2021, and Common Shares which will become issuable within 60 days
after March 16, 2021, pursuant to outstanding RSUs count as outstanding for computing the percentage beneficially owned by
the person holding such share options, warrants, convertible securities and RSUs, but are not deemed to be outstanding for
the purpose of computing the percentage ownership of any other person.
|
|
(3)
|
Executive officers of the Company, in years
prior to 2015, were able to voluntarily defer receipt of RSU grants under the Company’s Nonqualified Deferred Compensation
Plan. The RSUs held under the Nonqualified Deferred Compensation Plan are not considered Common Shares that are beneficially
owned for SEC disclosure purposes. The Company has included them in this table because they are similar to or track its Common
Shares, they ultimately are settled in Common Shares, and they represent an investment risk in the performance of its Common
Shares.
|
|
(4)
|
Includes 190,201 Common Shares held by
Mittelstaedt Enterprises, L.P., of which Mr. Mittelstaedt is a limited partner. Excludes 5,286 Common Shares held by the Mittelstaedt
Irrevocable Trust dated 6/18/97 and 44,002 Common Shares held by RDM Positive Impact Foundation as to which Mr. Mittelstaedt
disclaims beneficial ownership.
|
|
(5)
|
Includes 11,692 Common Shares held by Mr.
Little’s spouse.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 24
EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
This Compensation Discussion and Analysis (“CD&A”)
provides a detailed description of our executive compensation philosophy and objectives, the elements of our executive compensation
program, the key executive compensation decisions made under those programs for 2020, and the factors considered in making those
decisions. This CD&A is intended to provide additional context and background for the compensation earned by and awarded to
our NEOs.
For 2020, our NEOs included the following individuals:
|
■
|
Worthing F. Jackman, President and
Chief Executive Officer;
|
|
■
|
Mary Anne Whitney, Executive Vice President and
Chief Financial Officer;
|
|
■
|
Darrell W. Chambliss, Executive Vice President
and Chief Operating Officer;
|
|
■
|
Patrick J. Shea, Executive Vice President, General
Counsel and Secretary; and
|
|
■
|
James M. Little, Executive Vice President –
Engineering and Disposal.
|
Executive Summary
The Company’s executive compensation program is designed
to align the interests of senior management with shareholders by tying a significant portion of their compensation to the Company’s
annual operating and financial performance, as well as longer term shareholder returns. We believe that our pay-for-performance
philosophy and the design of our executive compensation program strongly support an environment of continuous improvement and
shareholder value creation.
As described in the section “Compensation Discussion
and Analysis — Role of Independent Compensation Consultant; Comparator Group Compensation Data”, a review by the Compensation
Committee’s independent compensation consultant in February 2020 concluded that, in aggregate, the Company’s targeted
total direct compensation, or TDC, for our NEOs was aligned with the 25th percentiles of the Comparator Group. It was
also noted that the Company’s annualized TSR was approximately at or above the 75th percentile for all measurement
periods between three and ten year periods ending December 31, 2019, when compared to the Comparator Group.
As illustrated below, our TSR significantly outperformed
the S&P 500, the TSX 60 and the DJ Waste Index for the five-year period ended December 31, 2020. In addition, in October 2020,
we increased our regular quarterly cash dividend by 10.8% to $0.205 per share, the tenth consecutive year of double-digit growth
in our cash dividend since its commencement in 2010.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 25
Executive Compensation Program Best Practices
Our executive compensation program includes features that
we believe drive performance and excludes features we believe do not serve our shareholders’ long-term interests. The table
below highlights some of the “Best Practices” featured in our compensation program as well as the “Problematic
Pay Practices” that we have excluded.
|
Pay for Performance
|
|
Our NEOs receive
the majority (approximately 82% for the CEO, and approximately 74% for other NEOs, in
2020) of their TDC in performance-based compensation, which is contingent on Company and
individual performance.
|
|
Ratio of PSUs to total equity
compensation at 50%
|
|
Our NEOs receive 50% of their
long-term equity compensation as PSUs, the payout on which is contingent upon Company
performance over a multi-year period.
|
|
Relevant Performance Metrics
|
|
Our annual incentive and equity-based
compensation programs include performance metrics meant to drive long-term shareholder
value creation.
|
|
Addition of ESG Metrics
|
|
Incorporated ESG targets into
equity-based compensation programs starting in 2021.
|
|
Recoupment Policy
|
|
We maintain a clawback policy
that permits our Board of Directors to seek the forfeiture or repayment of certain incentive
compensation paid to an NEO or other corporate officer in certain circumstances.
|
|
Annual Say on Pay
|
|
We provide our shareholders with
an annual opportunity to vote, on an advisory basis, on the compensation of our NEOs.
|
|
Use of Peer Group Data and
Tally Sheets
|
|
We utilize tally sheets annually
when making executive compensation decisions, and periodically review compensation data
relative to our comparator group of companies (the “Comparator Group”).
|
|
Share Ownership Guidelines
|
|
Our NEOs and other corporate
officers are expected to hold Common Shares with a value equal to a multiple of their
base salaries.
|
|
Conservative Use of Equity
Grants
|
|
Our annual equity grants have
averaged approximately 0.30% of outstanding shares over the last five fiscal years.
|
|
Risk Assessment
|
|
Our corporate officers’
compensation program has been designed, and is periodically reviewed, to ensure that it
does not encourage inappropriate risk-taking.
|
|
No Compensation Guarantees
|
|
Our NEO employment agreements
do not provide for guaranteed base salary increases, minimum bonuses or annual equity
awards.
|
|
No “Single Triggers”
|
|
Our CEO and other executive officers,
as defined under applicable Canadian securities laws, have employment agreements that
contain “double-trigger” change in control severance provisions.
|
|
No Dividends on Unvested
Equity Awards
|
|
We do not pay ordinary dividends
on unvested time-based equity awards. For our PSUs, dividend equivalents are paid in cash,
without interest, only when and to the extent the PSUs become vested.
|
|
No Discounting, Re-pricing
or Buyout Provisions
|
|
We expressly prohibit the discounting
of share options and the re-pricing or cash buyouts of underwater share options.
|
|
No Hedging or Pledging of
Securities
|
|
NEOs, other corporate officers
and directors are prohibited from engaging in transactions designed to hedge against the
economic risks associated with an investment in Common Shares or pledging Common Shares.
|
Pay for Performance Compensation Mix
The Company’s executive compensation program is designed
to reward the NEOs and other corporate officers for achieving strong operational performance and delivering on the Company’s
strategic initiatives, both of which are important to the long-term success of the Company. Based on the Company’s long
term and consistent record of strong financial performance and superior shareholder returns, the Company’s compensation
program has remained relatively unchanged over the years.
The Compensation Committee believes that a significant portion
of the compensation of our NEOs should be aligned with our shareholders’ interests and directly linked to measurable performance.
To evaluate the proportion of performance-based compensation for our NEOs, the Compensation Committee looks at recurring compensation
by examining the TDC earned by our NEOs. TDC is calculated by adding base salary, actual cash annual incentives paid and the grant
date fair value of share awards, each as reported in our Summary Compensation Table. It excludes indirect compensation reported
under the “All Other Compensation” column of our Summary Compensation Table.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 26
As illustrated below, At-Risk Compensation, comprised of
cash annual incentives and equity-based compensation, made up approximately 82% of the TDC of our CEO, and 74% of the combined
TDC of our other NEOs in 2020.
“Say on Pay” Proposal
The Company provides its shareholders with an opportunity
to cast an annual advisory vote with respect to its NEO compensation, as disclosed herein, referred to as the “Say on Pay”
proposal (“Say on Pay”). In 2020, more than 97.5% of the Common Shares voted approved of our NEO compensation program.
The Compensation Committee and the Company viewed these results as a strong indication that the Company’s shareholders support
the executive compensation policies and practices of the Company.
2020 Compensation Highlights
Waste Connections delivered another year of strong operating
and financial performance in 2020 in spite of the impacts from the COVID-19 pandemic. More importantly, we maintained a strong
financial position and provided a differentiated level of support to address the unprecedented health, economic and social challenges
resulting from the COVID-19 pandemic, including the following:
|
■
|
Providing over $35 million of discretionary
frontline employee support primarily for supplemental wages to all of our frontline employees, whether union or non-union,
remote or in person, and including temporary employees, as well as a “Thank You” bonus late in the year;
|
|
■
|
Raising our targeted minimum wage to $15 per
hour, above many state and provincial requirements, to further support approximately 4% of our employees below that level;
|
|
■
|
Expanding and extending access to medical benefits
and covered COVID-19-related testing and medical costs;
|
|
■
|
Expanding our Employee Relief Fund for
those experiencing financial hardship;
|
|
■
|
Launching the Waste Connections Scholarship
Program to assist our employees’ children in pursuing their educational goals;
|
|
■
|
Expanding community support to assist food
banks, families at risk, and organizations with a focus on addressing racial inequities at a local or national level;
|
|
■
|
Ending 2020 with over $1.8 billion in liquidity,
including more than $600 million of cash and equivalents; and
|
|
■
|
Ultimately funding the Company-wide annual
incentive program to pay at target levels.
|
For highlights of the Company’s fiscal year 2020 operating
and financial performance and response to the COVID-19 pandemic, see the Summary section of this Proxy Statement. A more detailed
description of the Company’s fiscal year 2020 operating and financial performance, including a graphical representation
of TSR performance for the S&P 500, TSX 60 and the DJ Waste Index, can be found on pages 45-147 and pages 43-44, respectively,
of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC and the securities commissions
or similar regulatory authorities in Canada on February 18, 2021.
Assessing COVID-19 Impact to Performance and Incentive
Compensation Program
Beginning in April and continuing throughout 2020, the Compensation
Committee assessed impacts from the COVID-19 pandemic on the Company’s 2020 financial results and incentive compensation
program, given the extraordinary nature of the pandemic and the resulting shutdowns affecting operations and results. The Company’s
annual incentive program, pursuant to which our NEOs receive annual cash incentive bonus awards only if cash incentive bonus awards
payable to other employees have been made, is based upon an operating budget adopted by our Board of Directors that is a compilation
of stretch goals set for each operating location. Given the stretch goals, it was likely that the pandemic’s impacts would
result in financial targets not being met.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 27
When assessing performance for 2020, the Compensation Committee
considered the following factors in its review: (i) the Company’s differentiated response to the COVID-19 pandemic and related
employee support; (ii) prior to the onset of the COVID-19 pandemic, financial results were trending above budget, with the outlook
improving; (iii) incentive compensation targets for 2020 were established in February, just one month prior to COVID-19-related
impacts to the business; (iv) strong operating and financial performance, liquidity and capital position highlighted in the Summary
section of this Proxy Statement; (v) further improvements in safety, employee engagement and voluntary turnover; (vi) establishment
of long-term, aspirational ESG targets; and (vi) sector-leading TSR among large cap peers.
The Compensation Committee recognized the extraordinary
efforts of our employees (essential service providers) during the pandemic and resulting achievements. With the considerations
noted above and input from its independent compensation consultant, the Compensation Committee made the determination that the
2020 results would be adjusted to reflect the COVID-19-related impacts to financial results by using the 2020 Budget, as adjusted,
as an approximation for the results that would have otherwise been obtained (the “Adjusted Results”). Ultimately,
the Compensation Committee determined to fund the Company-wide annual incentive program at target, utilize any COVID-19-related
performance adjustments for 2020 to calculate performance under the 2018 PSUs, and leave the metrics of other outstanding PSUs
granted in 2019 and 2020 unchanged and without future positive discretion in spite of the likely material negative impact to those
performance-based grants, including an expected zero vesting value for the 2019 PSU grants in February 2022.
Incorporating ESG Targets into Long-Term Compensation
In October 2020, the Company adopted long-term, aspirational
sustainability targets and committed over $500 million for investments to meet or exceed such targets. These targets primarily
focus on reducing emissions, increasing resource recovery of both recyclable commodities and clean energy fuels, reducing reliance
on off-site disposal for landfill leachate, increasing employee engagement, and further improving our industry-leading safety
performance. The Company views its ESG/sustainability initiatives to be consistent with its objective of long-term value creation.
As such, the Compensation Committee introduced continuous improvement towards the Company’s sustainability targets as an
additional performance measure of our PSU grants, accounting for 15% of target achievement, beginning February 2021.
Our Compensation Philosophy and Objectives
The Compensation Committee’s philosophy with respect
to the compensation of the NEOs does not differ materially from its philosophy regarding other executive and corporate officers.
The Compensation Committee believes that compensation paid to NEOs should closely align with our performance on both a short-term
and long-term basis, be linked to specific, measurable results intended to create value for shareholders and assist us in attracting
and retaining key officers critical to our long-term success.
In establishing compensation for NEOs, the Compensation
Committee’s objectives are to:
|
■
|
Attract and retain individuals with
superior leadership ability and managerial talent by providing competitive compensation and rewarding outstanding performance;
|
|
■
|
Ensure that NEO compensation is aligned with our
corporate strategies, business objectives and the long-term interests of our shareholders;
|
|
■
|
Provide an incentive to achieve key strategic
and financial performance measures by linking incentive award opportunities to the achievement of performance measures in
these areas;
|
|
■
|
Create an incentive for sustained growth; and
|
|
■
|
Provide a balanced approach to compensation policies
and practices, which does not promote excessive risk-taking.
|
Our overall executive compensation program is structured
to attract and retain highly qualified executive and corporate officers by paying them competitively and consistent with our success.
We believe that the compensation structure should ensure that a significant portion of pay directly relates to the performance
of our Common Shares and other factors that directly and indirectly influence shareholder value. Accordingly, our approach to
compensation is to provide base salary, an annual performance-based incentive opportunity tied to goals that link NEO compensation
to our annual operating and financial performance, and long-term equity grants intended to align NEO compensation with shareholder
returns and financial performance over a longer period and to aid in retention. Each year, the Compensation Committee allocates
total compensation for the Company’s NEOs between cash and equity based on comparisons with other companies and the Compensation
Committee’s judgment.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 28
Approach to Compensation; Role of the Compensation Committee
The Compensation Committee has the primary authority for
the consideration and determination of the cash and equity compensation we pay to our executive and corporate officers. The Compensation
Committee also makes recommendations to the Board of Directors concerning cash and equity-based compensation and benefits for
non-employee directors. To aid the Compensation Committee, the CEO meets with the Compensation Committee and provides recommendations
annually to the Compensation Committee regarding the compensation of the NEOs and other corporate officers, other than himself.
However, the Compensation Committee is not bound to follow the CEO’s recommendations. Pursuant to its charter, the Compensation
Committee has the authority to engage its own independent advisors to assist it in carrying out its duties. The Compensation Committee
holds executive sessions not attended by any members of management or non-independent directors.
The Compensation Committee meets in the first quarter of
each fiscal year to review and approve:
|
■
|
The achievement of financial performance
goals for the prior fiscal year and, if applicable, a multi-year period;
|
|
■
|
Performance-based compensation, if earned, based
on such achievement for the prior fiscal year and, if applicable, a multi-year period;
|
|
■
|
Annual equity-based compensation grants;
|
|
■
|
Financial goals for performance-based awards;
and
|
|
■
|
The level and mix of NEO compensation for the
current fiscal year.
|
In determining the base salary, performance-based compensation
and long-term equity-based compensation levels for the NEOs, the Compensation Committee considers: (i) the compensation structure
and practices of a comparator group of companies that it believes are the Company’s leading competitors in the solid waste
industry; (ii) a comparator group of companies, most of which operate outside the solid waste industry, with comparable financial
profiles; and (iii) its own judgment as to an appropriate level of compensation for a company of our size and financial performance.
From time to time, the Compensation Committee uses compensation consultants and comparator group analyses from third parties to
assess our compensation components. For 2020, the Compensation Committee maintained the percentage of PSU awards as a proportion
of total equity compensation at 50%. The Compensation Committee believes that achieving a +/- 10% range, over time, of median
market Comparator Group target TDC for our existing NEOs is appropriate given their extensive experience, knowledge and their
impact on the long-term success of the Company.
For 2020 the Compensation Committee considered a tally sheet
that included, for each NEO and other corporate officer, current base salary, salary paid in 2019, bonus percentage, cash bonus
paid for 2019, RSUs and PSUs granted in 2019, the dollar amount of 401(k) and Nonqualified Deferred Compensation Plan matches
in 2019, payments and reimbursements for various expenses that could be considered perquisites, and the value of unvested RSUs
and PSUs as of the end of the year. In determining the amount of compensation for the NEOs, the Compensation Committee does not
take into account amounts realized from prior equity-based compensation grants because the Compensation Committee seeks to provide
compensation that takes into account the cost of replacing the NEOs on a market competitive basis and what is equitable based
on our performance. We believe that, to some extent, appreciation reflected in the amounts realized from prior equity-based compensation
grants confirms the Compensation Committee’s success in aligning compensation with our shareholders’ interests, thus
validating our compensation philosophy.
Role of Independent Compensation Consultant; Comparator
Group Compensation Data
The Compensation Committee periodically retains Pearl Meyer
& Partners, LLC (“Pearl Meyer”) to provide it with market data and information regarding market practices and
trends, assess the competitiveness of our executive compensation program, compare our performance relative to a Comparator Group,
assist with the development of the Compensation Discussion and Analysis in this Proxy Statement, and provide analysis on our non-employee
director compensation. The Compensation Committee retains Pearl Meyer directly, supervises all work assignments performed by the
firm, and reviews and approves all work invoices received for payment. As required under Item 407(e)(3) of Regulation S-K, the
Compensation Committee annually assesses whether the work of Pearl Meyer raises any conflict of interest. No conflict of interest
was determined to exist with respect to Pearl Meyer’s services as a compensation consultant during the last fiscal year.
The Compensation Committee periodically analyzes the compensation
practices of a Comparator Group to assess our competitiveness with the market. In doing so, it takes into account factors such
as the relative size and financial performance of those companies and factors that differentiate us from them. Criteria used for
establishing the Comparator Group include (i) organization size, with financial characteristics such as revenue, free cash flow,
capital expenditures, EBITDA, market capitalization or enterprise value similar to those of the Company, (ii) country of domicile,
including Canada and the United States, and (iii) industry, including companies in the environmental, facilities and diversified
support services, transportation, oil and gas equipment and services, distribution and construction materials industries. Due
to limited peers in Canada, the industry criteria was broader for Canadian companies.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 29
The Compensation Committee independently retained Pearl
Meyer in early 2020 to review the compensation of the Company’s NEOs against the Comparator Group and survey information
of similarly sized organizations. As part of that review, the Compensation Committee maintained the composition of the Comparator
Group, which had been reviewed and updated in 2019, as follows:
|
Air Products
and Chemicals, Inc.
|
Fastenal
Company
|
Martin Marietta
Materials, Inc.
|
United Rentals,
Inc.
|
|
Canadian
Pacific Railway Limited
|
Fortis Inc.
|
Old Dominion
Freight Line, Inc.
|
Vulcan Materials
Company
|
|
Cintas Corporation
|
Iron Mountain
Incorporated
|
Republic
Services, Inc.
|
Waste Management,
Inc.
|
|
J.B.
Hunt Transport Services, Inc.
|
W.W.
Grainger, Inc.
|
|
|
Pearl Meyer concluded that, in aggregate, the Company’s
targeted TDC for the NEOs was aligned with the 25th percentile of market comparables. It was also noted that the Company’s
annualized TSR was above the 75th percentile for all measurement periods between three and ten year periods ending
December 31, 2019, when compared to the Comparator Group.
Elements of Compensation
The Compensation Committee believes that a significant portion
of the compensation of our NEOs should align with our shareholders’ interests and be directly linked to performance. While
the exact pay mix of our NEOs’ total compensation (base salary, annual incentives, and equity-based compensation) is not
specifically determined, the Compensation Committee generally targets annual incentives and equity-based compensation for our
NEOs to constitute between 70% and 80% of TDC assuming target level payouts are achieved; this is below the approximate 86% market
consensus data for the Comparator Group provided by Pearl Meyer in 2020, primarily due the Company’s overall alignment with
the 25th percentile of the Comparator Group. In aggregate for the NEOs, base salaries and target total cash compensation
(base salaries plus annual incentives) were at or slightly above the 25th percentile of the levels of compensation
among Comparator Group executives, and TDC was aligned slightly below the market 25th percentile. The Compensation
Committee has complete discretion to determine compensation levels.
Base Salary
Our compensation program includes base salaries to compensate
the NEOs and other corporate officers for services rendered each year. Base salaries provide a secure base of compensation that
is not dependent on our performance and is an amount that recognizes the role and responsibility of each NEO and other corporate
officer, as well as such officer’s experience, performance and contributions. We also believe this element is beneficial
in attracting and retaining high-performing and experienced corporate officers.
The Compensation Committee considers base salary increases
for certain NEOs and other corporate officers annually. Base salary decisions generally reflect the Compensation Committee’s
consideration of our Comparator Group data and subjective factors including an officer’s experience and past performance.
For 2020, the Compensation Committee approved the following annualized base salaries for our NEOs:
|
Name
|
2019
Base Salary
($)
|
|
2020
Base Salary
($)
|
%
Increase/
Decrease
|
|
Worthing
F. Jackman
|
800,000
|
|
900,000
|
12.5%
|
|
Mary
Anne Whitney
|
440,000
|
|
500,000
|
13.6%
|
|
Darrell
W. Chambliss
|
527,875
|
|
541,072
|
2.5%
|
|
Patrick
J. Shea
|
430,500
|
|
441,263
|
2.5%
|
|
James
M. Little
|
425,375
|
|
436,009
|
2.5%
|
In determining 2021 base salaries for our NEOs, the Compensation
Committee increased Messrs. Chambliss and Little’s base salaries 2.5%, and Mr. Shea’s base salary 4.0%, effective
February 1, 2021. The base salary for Ms. Whitney increased 10.0% on February 1, 2021. The 2020 increases for Mr. Jackman and
Ms. Whitney, and 2021 increase for Ms. Whitney, were part of a multi-year approach to increase their targeted direct compensation
towards or within a +/- 10% range of the median market Comparator Group. Mr. Jackman’s base salary did not increase in 2021.
Annual Incentives: Management Incentive Compensation
Program
Our compensation program includes an annual cash incentive
award to reward NEOs and other corporate officers based on our performance and the individual executive’s contribution to
that performance. Under our Management Incentive Compensation Program (the “MICP”), which is administered pursuant
to our 2016 Incentive Award Plan (the “2016 Plan”), a summary of which is attached as Appendix B, each participant
has an opportunity to earn an annual incentive based on a targeted percentage of the participant’s annual base salary for
the year. The objective of the annual incentive is to encourage participants to manage the Company to achieve financial performance
targets based on budgeted revenue.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 30
Under the MICP, the NEOs and other corporate officers of
the Company are eligible to receive annual incentives. For 2020, the target annual incentives as a percentage of salary for the
NEOs were as follows:
|
Name
|
Target
Incentive
(as a % of Base Salary)
|
|
Worthing
F. Jackman
|
125%
|
|
Mary
Anne Whitney
|
85%
|
|
Darrell
W. Chambliss
|
85%
|
|
Patrick
J. Shea
|
85%
|
|
James
M. Little
|
85%
|
In 2020, each NEO had the opportunity to earn up to 200%
of such person’s target annual incentive based on our achievement of certain targeted levels of financial performance established
by the Compensation Committee and (other than with respect to Mr. Jackman) based on the recommendations of the CEO.
The Compensation Committee adopted the performance targets
for the fiscal year in February 2020. Our performance was compared to target levels of: (1) EBITDA, weighted at 20%; (2) operating
income, or EBIT, weighted at 20%; (3) operating income as a percentage of revenue, or EBIT Margin, weighted at 30%; and (4) net
cash provided by operating activities as a percentage of revenue, or CFFO Margin, weighted at 30%. Payouts are determined based
on our weighted average achievement relative to each metric (the “multiplier”). Because the Compensation Committee
believes the operating budget adopted by our Board of Directors is a compilation of stretch goals set for each operating location,
the targeted performance goals reflect a percentage or factor of the final budget, consistent with the prior year, as set forth
below.
|
|
|
Original 2020
Budget
|
|
|
2020
Factor
|
|
2020 Targeted
Performance Goal
|
|
|
Weight
|
|
EBITDA
|
|
$
|
1,801.3M
|
|
|
96.5%
|
|
$
|
1,738.3M
|
|
|
20%
|
|
EBIT
|
|
$
|
1,015.4M
|
|
|
96.5%
|
|
$
|
979.8M
|
|
|
20%
|
|
EBIT Margin
|
|
|
17.6%
|
|
|
N/A
|
|
|
17.0%
|
|
|
30%
|
|
CFFO Margin
|
|
|
27.9%
|
|
|
97.5%
|
|
|
27.2%
|
|
|
30%
|
Under the terms of the MICP, the Compensation Committee,
in its complete and sole discretion, may adjust the targeted performance goals if an acquisition, significant new contract or
extraordinary event results in a significant impact to the goals. For these purposes, the Compensation Committee determines operating
income, or EBIT, primarily by adjusting for any gains or losses on disposal of assets, and determines EBITDA by adding depreciation,
amortization and closure/post-closure accretion to operating income, both generally consistent with the Company’s approach
to reporting non-GAAP measures in its earnings releases and filings with the SEC and applicable securities commissions or similar
regulatory authorities in Canada. The Compensation Committee chose these measures of performance because they are widely used
by investors as valuation measures in the solid waste industry and because the targeted goals encourage improving free cash flow
and returns on invested capital.
The Company’s cumulative performance relative to target
is calculated as a weighted average and treated as a multiplier. The multiplier is applied to the target payout so that if the
Company achieved 100% of its targets, the participants would receive 100% of their annual incentives. Participants may earn from
0% up to a maximum of 200% of their targeted annual incentives, based on their position, in accordance with the following sliding
scale, which illustrates the interpolation of payouts within the ranges:
%
Target
Achievement
|
Target
%
Multiplier
|
|
105%
or Higher
|
200%
|
|
104%
|
180%
|
|
103%
|
160%
|
|
102%
|
140%
|
|
101%
|
120%
|
|
100%
|
100%
|
|
99%
|
80%
|
|
98%
|
60%
|
|
97%
|
40%
|
|
96%
|
20%
|
|
95%
|
0%
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 31
Payments under this program are contingent on continued
employment at the time of payout, subject to the terms of any applicable employment agreements.
2020 Adjusted Target Goals and Results
As previously discussed, the Compensation Committee made
the determination in February 2021 to utilize the 2020 Budget to calculate COVID-19-adjusted performance for 2020 (the “Adjusted
Results”). The Compensation Committee noted further that the calculated payout based on Adjusted Results would exceed
100%, consistent with the strong start to the year. Adjusted targeted performance goals and results, and the corresponding target
achievement percentages for 2020, are shown below.
|
|
|
Adjusted
Target(1)
|
|
|
Adjusted
Results(1)
|
|
|
Actual
Results as %
of Target
|
|
Weighting
|
|
Target
Achievement
|
|
EBITDA
|
|
$
|
1,747.4M
|
|
|
$
|
1,810.8M
|
|
|
103.6%
|
|
20%
|
|
20.7%
|
|
EBIT
|
|
$
|
988.3M
|
|
|
$
|
1,024.2M
|
|
|
103.6%
|
|
20%
|
|
20.7%
|
|
EBIT Margin
|
|
|
17.0%
|
|
|
|
17.6%
|
|
|
103.6%
|
|
30%
|
|
31.1%
|
|
CFFO Margin
|
|
|
27.1%
|
|
|
|
27.8%
|
|
|
102.6%
|
|
30%
|
|
30.8%
|
|
OVERALL ACHIEVEMENT
|
|
|
|
|
|
|
|
|
|
|
|
|
|
103.3%
|
|
(1)
|
The Compensation Committee
adjusted the targets and results for 2020 to reflect the impact of certain acquisition and divestiture-related items, impairments
and other items and proceeds from disposal of assets.
|
Annual incentives earned for each participant were calculated
pursuant to the interpolated sliding scale shown above. Based on the calculations, the Company achieved a weighted-average of
103.3% of our NEOs’ targeted performance goals in 2020, which would have resulted in payouts of 166.6% of eligible targets.
Consistent with the Company’s focus on discretionary frontline employee support throughout the pandemic and to fund the
Company-wide annual incentive program at target, the Compensation Committee determined that it would reduce the payout from the
calculated Target Achievement of 103.3% based on Adjusted Results to a payout of 100%, which reflects an aggregate reduction of
approximately 40%, or $3.9 million, from corporate officers to help fund a portion of frontline employee support efforts.
Annual incentives earned and paid as a percentage of each
participant’s eligible base salary, as well as incentives paid as a percentage of incentives earned, are shown below.
|
Name
|
Earned
Incentive %
of Eligible Base
Salary(1)
|
Paid
Incentive %
of Eligible Base
Salary(1)
|
Incentive
Paid as
% Earned
|
|
Worthing
F. Jackman
|
208%
|
125%
|
60%
|
|
Mary
Anne Whitney
|
142%
|
85%
|
60%
|
|
Darrell
W. Chambliss
|
142%
|
85%
|
60%
|
|
Patrick
J. Shea
|
142%
|
85%
|
60%
|
|
James
M. Little
|
142%
|
85%
|
60%
|
|
(1)
|
Calculated based on the
NEOs base salary in effect on February 1, 2021.
|
Further disclosure regarding the actual annual incentive
amounts earned by the NEOs for 2020 under the MICP is located in the “Non-Equity Incentive Plan Compensation” column
of the Summary Compensation Table.
In lieu of paying an annual incentive in cash, the Compensation
Committee, in its complete and sole discretion, may choose to pay the annual incentive in RSUs issued under the 2016 Plan or any
succeeding plan we adopt. All 2020 annual incentives paid pursuant to the MICP were paid in cash.
On February 9, 2021, the Compensation Committee certified
the 2020 results for the MICP and the one-year RSU performance hurdle described below, and approved our 2021 MICP under the 2016
Plan.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 32
Long-Term Incentives: Equity-Based Compensation
We believe that equity ownership in the Company ties executive
compensation to the performance of Common Shares and creates an incentive for sustained growth, superior shareholder returns and
employee retention. This investment provided to NEOs and other corporate officers coupled with multi-year vesting periods or performance-based
metrics serves to enhance retention and corporate culture, both of which are instrumental to the future success of the Company
and the long-term interests of our shareholders.
Each year, the Compensation Committee, after consultation
with the CEO, assesses our performance and the performance of each of the NEOs and other corporate officers during the most recently
completed fiscal year. Based on the Compensation Committee’s subjective review of the prior year’s performance and
with a focus on maintaining a competitive market level of compensation, each NEO and other corporate officer receives a grant
of RSUs and PSUs under the 2016 Plan.
Restricted Share Units
The Compensation Committee believes that the use of RSU
awards reduces the overall compensation cost to us compared to the cost of granting share options at levels intended to convey
similar value, and offers our NEOs a competitive and more stable equity-based compensation. RSU awards provide our NEOs and other
corporate officers with the opportunity to share in the success of the Company. RSU awards vest in equal increments annually over
four years and three years for U.S. and Canadian employees, respectively. Upon vesting of the RSU awards, the participant receives
Common Shares equal to the number of RSUs that vested (or, in our discretion, the cash equivalent), less any shares (or cash,
if applicable) withheld and used to pay withholding taxes and other source deduction amounts. There are no dividend equivalents
paid on outstanding RSUs during the vesting period, and RSUs do not carry voting rights or any other rights of a shareholder.
Performance Share Units
In 2014, the Compensation Committee introduced performance-based
restricted share units, or PSUs, which are awards subject to three-year performance hurdles to further enhance the link between
executive compensation and our performance. Performance goals for the three-year performance period are recommended by management
based on our historical performance, current projections and trends, and are established during the first quarter of the performance
period. The Compensation Committee reviews management’s recommendations (including a discussion of associated risks), determines
appropriate revisions, and once satisfied with the degree of difficulty associated with goal achievement, approves the goals for
each performance period. The Compensation Committee seeks to establish goals for which the likelihood of missing the target goal
is at least as high as the likelihood of achieving the target goal based on reasonable assumptions and projections at the time
of grant.
For the annual award in February 2020, the amount of PSUs
at target as a percentage of the total long-term incentives awarded to each participant equalled 50%. For the 2020-2022 performance
period, each participant may earn between 25% and 200% of the target number of PSUs based on achievement of two metrics: a return
on invested capital, or ROIC, improvement goal and a free cash flow per share growth goal, each weighted 50%. The Compensation
Committee selected these metrics because it believes they are critical drivers of sustained value creation over the longer term
and align with the interests of shareholders.
The table below shows the required achievement of ROIC improvement
and free cash flow per share growth performance measures and the corresponding potential payouts under our PSUs granted in 2020.
|
|
3-Year
ROIC
Improvement
|
3-Year
Free Cash
Flow/Share CAGR
|
|
Threshold
(0% payout)
|
75
basis points
|
4.0%
|
|
Target
(100% payout)
|
125
basis points
|
6.0%
|
|
Maximum
(200% payout)
|
175
basis points
|
10.0%
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 33
In addition, a relative performance metric affects the number
of PSU awards earned. Performance with respect to the TSR modifier is calculated based on the Company’s performance relative
to the S&P 500 Index for each of the twelve quarters during the 3-year performance period. The Compensation Committee believes
this calculation of TSR prevents the overweighting of anomalous events at the beginning or end of a multi-year measurement period.
Moreover, any incremental payout associated with this modifier begins to accrue only if the Company’s average relative TSR
is above the 50th percentile of the peer group, as described below.
Each participant can earn 112.5% of the achieved amount
if the Company’s relative TSR measured against the S&P 500 companies is between the 50th and 75th percentile
and 125% of the achieved amount if the Company’s relative TSR measured against the S&P 500 companies is above the 75th
percentile.
At the end of a three-year performance period, the Compensation
Committee will certify the performance results and percentage payout, as well as the resulting final number of PSUs earned by
each participant, if any. There are no dividends paid on outstanding PSUs during the vesting period, but dividend equivalents
on the number of PSUs that ultimately vest will accumulate and a dividend equivalent payment will be payable to each participant
on the settlement date without interest. Upon vesting of the PSUs, in addition to receiving the number of Common Shares determined
in accordance with the payout calculation, the participant will receive a cash payment equal in value to the total dividends that
would have been paid on the number of Common Shares that vest. PSUs do not carry voting rights or any other rights of a shareholder.
While staying competitive with the market is an overall
guideline, individual target opportunities may vary based on the Compensation Committee’s consideration of other factors,
as discussed above. The equity-based compensation targets in 2020 were 300% of eligible base salary for Mr. Jackman, 187.5% for
Messrs. Chambliss, Shea and Little, and 158.75% of eligible base salary for Ms. Whitney. For 2020, the actual equity grants for
the NEOs were consistent with these targets, with RSUs constituting 50% of the total annual long-term incentives awarded, and
PSUs the remaining 50% of such awards. See the “Grant of Plan Based Awards in Fiscal Year 2020” table for additional
detail regarding equity awards granted to each of the NEOs in 2020.
For 2021, the total equity-based compensation targets were
set as follows: for Mr. Jackman, 300% of his base salary; and 187.5% for the other NEOs. RSUs constituted 50% of the total equity
grant awarded, and PSUs constituted the remaining 50%.
Payout for the 3-Year Performance Period Ended December
31, 2020
In February 2021, the Compensation Committee certified the
results of the 2018-2020 PSUs granted under our 2016 Plan (the “2018 PSUs”). The 2018 PSUs were subject to a 3-year
performance period that ended December 31, 2020, and the number of Common Shares that could have become earned and vested ranged
from 0% to a maximum of 200% of the number of performance units granted in 2018, subject to a potential TSR modifier. Performance
measures for the 2018 PSUs included: (i) the compound annual growth rate of adjusted free cash flow per share, and (ii) absolute
improvement in ROIC. Each goal was judged on a 0% to 200% performance scale and was equally weighted when calculating overall
Company performance for purposes of determining the number of earned Common Shares. The adjusted free cash flow measure set a
target compound annual growth rate for the Company to achieve over the 3-year performance period. Adjusted free cash flow per
share was calculated for each year using adjusted free cash flow divided by the number of shares outstanding, with the calculation
of adjusted free cash flow consistent with the Company’s approach to reporting non-GAAP measures in its earnings releases
and filings with the SEC and applicable securities commissions or similar regulatory authorities in Canada. The ROIC improvement
measure set a target increase in ROIC for the Company to achieve over the 3-year performance period. ROIC for each year was then
calculated using after tax net operating profit before amortization of intangibles, divided by average invested capital (generally
determined by taking the average of invested capital at the end of the year and invested capital at the end of the prior year).
The Compensation Committee used the Adjusted Results described
above as the basis for the calculations for the 2018 PSU performance measures. As such, the Compensation Committee determined
that compounded adjusted free cash flow per share growth during the 3-year performance period ended December 31, 2020 was approximately
9.22%, as compared to a 100% threshold of 10.0%, resulting in an achievement percentage of 81%. The Compensation Committee also
determined that the absolute increase in ROIC over the 3-year performance period ended December 31, 2020 was 142 basis points,
as compared to a 100% threshold of 150 basis points, resulting in an achievement percentage of 84%. In addition, the TSR modifier
applied was 112.5% based on the Company’s 3-year cumulative TSR of 48% during the period; this performance equates to the
63rd percentile versus the S&P 500. The resulting combined weighted average achievement, further adjusted for the
TSR modifier, was 93% of the target grant amount. Please refer to the CD&A Appendix at the end of this CD&A beginning
on page 38 for details regarding the calculation of our results, as adjusted, for 2017 and 2020 for the adjusted free cash flow
measure and the ROIC improvement measure.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 34
The target amount of 2018 PSUs for each participant and
number of Common Shares earned for the 2018-2020 performance period are shown below.
|
Name
|
Target
Amount of
PSUs
|
Common
Shares
Earned
|
Common
Shares
Earned as % Target
|
|
Worthing
F. Jackman
|
5,228
|
4,862
|
93%
|
|
Mary
Anne Whitney
|
2,182
|
2,029
|
93%
|
|
Darrell
W. Chambliss
|
4,491
|
4,177
|
93%
|
|
Patrick
J. Shea
|
3,055
|
2,841
|
93%
|
|
James
M. Little
|
3,018
|
2,807
|
93%
|
Exercise of Discretion in Executive Compensation Decisions
As a risk mitigation provision, the Compensation Committee
has complete discretion to withhold payment pursuant to any of our incentive compensation plans irrespective of whether we or
the NEOs have successfully met the goals set under those plans.
Share Ownership Guidelines
To further align management incentives and shareholder interests
and discourage inappropriate or excessive risk-taking, our Board of Directors has established share ownership guidelines for our
NEOs and other corporate officers. The current minimum ownership thresholds are as follows:
|
■
|
For the Chief Executive Officer, five
times such individual’s base salary;
|
|
■
|
For Executive Vice Presidents, three times
each such individual’s base salary;
|
|
■
|
For Senior Vice Presidents, two times each
such individual’s base salary; and
|
|
■
|
For Vice Presidents, one times each such
individual’s base salary.
|
Once a corporate officer has acquired a number of Common
Shares that satisfies the ownership multiple then applicable to him or her, such number of shares then becomes his or her minimum
ownership requirement (even if the officer’s salary increases or the fair market value of such Common Shares subsequently
changes) until he or she is promoted to a higher level.
Each corporate officer is expected to attain the applicable
share ownership threshold under the guidelines within five years following the later of (i) the first annual assessment with respect
to such individual or (ii) the first annual assessment at which a higher share ownership multiple becomes applicable to such individual
(due to a promotion or otherwise). The five-year phase-in period is intended to permit gradual accumulation of the incremental
ownership associated with a new or higher multiple. For purposes of the calculation, Common Shares deemed “beneficially
owned” by the corporate officer within the meaning of the rules of the SEC, as well as RSUs subject to time-based vesting
held by a corporate officer, and vested or time-based unvested RSUs or resulting shares deposited into a deferred compensation
plan or arrangement, are included in the calculation of the amount of such individual’s ownership.
As of the date of this Proxy Statement, all of our corporate
officers exceed their current ownership requirement.
Timing of Equity Awards
The Compensation Committee generally makes annual grants
of equity-based compensation to our executive and non-executive officers and other employees in February following the public
release of year-end financial results and outlook for the upcoming year. This timing is optimal from the Compensation Committee’s
standpoint for two reasons: first, the Compensation Committee has the financial results from the previous year; and second, management
may notify employees of the annual grant award at or around the same time they typically notify employees of their cash annual
incentive with respect to the previous year, which we typically pay in February.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 35
Other Benefits
We provide certain limited benefits to our employees, including
the NEOs, to fulfill particular business purposes. In general, these benefits make up a very small percentage of total compensation
for the NEOs.
401(K) Plan
The NEOs are entitled to participate in a Company-sponsored
401(k) profit sharing plan on the same terms as all of our U.S. employees. We make matching contributions of 100% of every dollar
of a participating employee’s pre-tax and Roth contributions until the employee’s contributions equal five percent
of the employee’s eligible compensation, subject to certain limitations imposed by the Internal Revenue Code, or the IRC.
However, in 2020, the Company temporarily suspended matching contributions from June 1, 2020 through December 31, 2020, thereby
enabling the Company to redirect such amounts to help fund a portion of employee support efforts during the COVID-19 pandemic.
Employees are eligible to participate in the 401(k) plan beginning on the first day of the month following the completion of sixty
days of employment. Matching contributions are subject to certain deferral limitations imposed by the IRC on 401(k) plans and,
when made, are 100% vested.
Deferred Compensation Plan
We provide NEOs and certain other highly compensated employees
the opportunity to defer receiving income until a scheduled in-service date or after they terminate their employment. This offers
tax advantages by deferring taxation on the deferred compensation until the distribution date. We make a matching contribution
of 100% of every dollar of a participating employee’s pre-tax eligible contributions until the employee’s contributions
equal five percent of the employee’s eligible compensation, less the amount of any match we make on behalf of the employee
under the Company-sponsored 401(k) plan. However, in 2020, the Company temporarily suspended matching contributions from June
1, 2020 through December 31, 2020, thereby enabling the Company to redirect such amounts to help fund a portion of employee support
efforts during the COVID-19 pandemic. Matching contributions are subject to certain deferral limitations imposed by the IRC on
401(k) plans and, when made, are 100% vested. The deferred compensation plan is described under the heading “Nonqualified
Deferred Compensation in Fiscal Year 2020.”
Employee Share Purchase Plan
On February 11, 2020, the Board of Directors adopted the
2020 Employee Share Purchase Plan (the “ESPP”), which was approved by the Company’s shareholders on May 15,
2020. Under the ESPP, qualified employees (including NEOs) may elect to have payroll deductions withheld from their eligible compensation
on each payroll date in amounts equal to or greater than one percent (1%) but not in excess of ten percent (10%) of eligible compensation
in order to purchase Common Shares under certain terms and subject to certain restrictions set forth in the ESPP. The exercise
price is equal to 95% of the closing price of the Company’s common shares on the last day of the relevant offering period,
subject to certain restrictions. The maximum number of Common Shares that may be issued under the ESPP is 1,000,000, subject to
adjustment in accordance with the terms of the ESPP. Common Shares issued or delivered under the ESPP may be Common Shares that
are authorized and unissued or Common Shares that were reacquired by the Company, including Common Shares purchased in the open
market on behalf of the applicable participant. If Common Shares are acquired on the open market, the Company is responsible for
funding the difference between the acquisition cost of such Common Shares and the option price payable from the participant’s
contributions.
Other
We also offer a number of benefits to the NEOs pursuant
to benefit programs that provide for broad-based employee participation. In addition to the 401(k) plan and the ESPP described
above, the benefits include medical, prescription drugs, dental and vision insurance, short-term and long-term disability insurance,
life and accidental death and dismemberment insurance, health and dependent flexible spending accounts, health savings accounts,
and employee assistance benefits. These generally available benefits do not specifically factor into decisions regarding an individual
executive’s total compensation or equity-based compensation package. These benefits are designed to help us attract and
retain employees as we compete for talented individuals in the marketplace, where such benefits are commonly offered. We also
offer limited additional benefits to select employees, such as payment for annual physical examinations, reimbursement of certain
club dues and financial planning services, and personal use at times of a private aircraft if approved by the President and Chief
Executive Officer.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 36
Anti-Hedging/Pledging Policy
We have adopted a policy prohibiting executive officers
and directors from engaging in transactions designed to hedge against the economic risks associated with an investment in Common
Shares or pledging Common Shares. These individuals may not engage in the purchase or sale of put and call options, short sales
and other hedging transactions designed to minimize the risk of owning Common Shares. In addition, these individuals may not pledge
Common Shares as collateral unless pre-authorized to do so in certain limited situations.
Clawback Provisions
Our Board of Directors has adopted a Compensation Recoupment
Policy (the “Clawback Policy”) to maintain and enhance a culture that emphasizes integrity and accountability and
that reinforces the Company’s pay-for-performance compensation philosophy. As more fully described in the Clawback Policy,
which was filed as an exhibit to the Form 10-K we filed with the SEC and the securities commissions and similar regulatory authorities
in Canada on February 18, 2021, the policy provides that if an accounting restatement occurs, the Board of Directors shall seek
to require the forfeiture or repayment of incentive compensation paid to an NEO or other corporate officer during the three completed
fiscal years preceding the date of the restatement that is in excess of the amount that would have been awarded to, vested and/or
paid to the NEO or other corporate officer under the restatement if (i) the NEO or other corporate officer engaged in fraud or
intentional misconduct that materially contributed to the need for the restatement, or (ii) a clawback is otherwise required by
the applicable rules and regulations of the SEC or any national securities exchange on which the Company’s shares are listed.
Although we may need to revise our Clawback Policy depending on the final recoupment rules under the Dodd-Frank Wall Street Reform
and Consumer Protection Act (the “Dodd-Frank Act”), we believe this policy is a good governance practice that is beneficial
for the Company even ahead of the final rules.
We also maintain numerous risk mitigating provisions in
our compensation arrangements for the NEOs, which are described under the heading “Compensation Risk Assessment.”
Examples include the Compensation Committee’s ability to exercise negative discretion to reduce annual incentive awards
to zero, PSU grants which require achievement of multiple pre-determined goals over a three-year period before vesting, anti-hedging/anti-pledging
policies, and share ownership requirements.
Tax Deductibility Considerations
Section 162(m) of the IRC generally disallows an income
tax deduction to publicly-traded corporations for compensation in excess of $1,000,000 paid for any fiscal year to the Company’s
“covered employees,” defined in Section 162(m) as the CEO, the Chief Financial Officer and the three other most highly
compensated executive officers, other than the CEO and Chief Financial Officer. For fiscal years beginning on or before December
31, 2017, Section 162(m) exempts qualifying performance-based compensation from the deduction limit if certain requirements are
met. Pursuant to the 2017 Tax Cuts and Jobs Act, signed into law on December 22, 2017 (the “Tax Act”), subject to
certain transition rules, for fiscal years beginning after December 31, 2017, the performance-based compensation exception to
the deduction limitations under Section 162(m) is no longer available. As a result, for fiscal years beginning after December
31, 2017, any compensation in excess of $1,000,000 paid to our executive officers, other than payments or benefits that are excludible
from gross income under Section 162(m), may not be deductible. The Compensation Committee believes that the potential deductibility
of the compensation payable under its incentive compensation plans and arrangements should be only one of a number of relevant
factors taken into consideration in establishing those plans and arrangements for our executive officers and not the sole governing
factor. For that reason, the Compensation Committee intends to structure its incentive compensation plans and arrangements in
a manner similar to prior years, acknowledging that a portion of those compensation payments may not be deductible under Section
162(m), in order to assure appropriate levels of total compensation for our executive officers based on and aligned with the Company’s
performance.
Severance and Change in Control Arrangements
The Compensation Committee believes that the Company’s
current and historic successes are due in large part to the leadership, skills and performance of the NEOs, and that it is critical
to maintain the stability of the Company by providing severance and change in control benefits in order to encourage NEO retention
through a change in control. On February 13, 2012, a subsidiary of the Company implemented a Separation Benefits Plan, which has
been most recently restated on July 24, 2018 as discussed below, under which eligible officers of the Company, including our NEOs,
may receive certain severance and change in control benefits (the “Separation Benefits Plan”).
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 37
CD&A Appendix – Calculation of Actual Results
for 2018 PSU Performance Measures(1)
As discussed above, the 2018 PSUs were subject to a three-year
performance period that ended December 31, 2020, and the performance measures for the 2018 PSUs included: (i) the compound annual
growth rate of adjusted free cash flow per share, and (ii) absolute improvement in ROIC. The calculation of our results for 2017
and 2020 for the adjusted free cash flow measure and the ROIC improvement measure are described below.
ADJUSTED FREE CASH FLOW PER SHARE MEASURE (IN MILLIONS,
EXCEPT PER SHARE AMOUNTS)
|
|
|
2017
|
|
|
2020
|
|
|
Adjusted Free Cash Flow*
|
|
$
|
763.9
|
|
|
$
|
992.7
|
|
|
Diluted shares outstanding as of year-end
|
|
|
264.3
|
|
|
|
263.6
|
|
|
Adjusted free cash flow per share
|
|
$
|
2.89
|
|
|
$
|
3.77
|
|
RETURN ON INVESTED CAPITAL MEASURE (IN MILLIONS, EXCEPT
AS NOTED)
|
|
|
2017
|
|
|
2020
|
|
|
Adjusted EBITDA*
|
|
$
|
1,460.5
|
|
|
$
|
1,810.8
|
|
|
Less: depreciation
|
|
|
(530.2
|
)
|
|
|
(640.8
|
)
|
|
Less: taxes(2)
|
|
|
(260.5
|
)
|
|
|
(230.5
|
)
|
|
Tax-effected EBITA
|
|
|
669.8
|
|
|
|
939.4
|
|
|
Average total capital(3)
|
|
$
|
9,435.2
|
|
|
$
|
11,028.2
|
|
|
Return on Invested capital
|
|
|
7.10%
|
|
|
|
8.52%
|
|
|
*
|
Non-GAAP measures for 2017,
as reconciled in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, and the Adjusted Results for
2020.
|
|
(1)
|
Adjusted free cash flow per share measure
defined as compound annual growth rate of adjusted free cash flow divided by total diluted shares outstanding during the three-year
period ended December 31, 2020, as adjusted; and ROIC measure defined as absolute increase in ROIC during the three-year period
ended December 31, 2020, as adjusted.
|
|
(2)
|
2017 and 2020 taxes based on effective
tax rates for the full years 2017 and 2020, respectively.
|
|
(3)
|
Average total capital defined during each
period as the average outstanding debt less cash plus equity, adjusted to reflect the timing of incremental debt associated
with acquisitions late in the year. Outstanding debt includes long-term debt and current year debt, and cash includes restricted
cash.
|
Compensation Committee Report
The Compensation Committee of the Board of Directors has
reviewed and discussed with management the “Compensation Discussion and Analysis” required by Item 402(b) of Regulation
S-K. Based on the review and discussions referred to above, the Compensation Committee recommended to the Board of Directors that
the “Compensation Discussion and Analysis” be incorporated into both our Annual Report on Form 10-K for the fiscal
year ended December 31, 2020, and this Proxy Statement.
This report is submitted on behalf of the Compensation Committee.
William J. Razzouk, Chairman
Edward E. “Ned” Guillet
Susan “Sue” Lee
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 38
Compensation Risk Assessment
We believe our compensation policies and practices do not
present any risk that is reasonably likely to have a material adverse effect on the Company. We believe our approach to setting
performance targets, evaluating performance, and establishing payouts does not promote excessive risk-taking. We believe that
the components of our pay mix—base salary, annual cash incentive bonuses, and long-term equity grants—appropriately
balance near-term performance improvement with sustainable long-term value creation.
We considered the following elements of our compensation
policies and practices when evaluating whether such policies and practices encourage our employees to take unreasonable risks:
|
■
|
Annual performance targets are established
by each operating location and region and on a Company-wide basis to encourage decision-making that is in the best long-term
interests of both the Company and our shareholders;
|
|
■
|
We adjust performance targets to exclude the benefit
or detriment of extraordinary events to ensure our employees are compensated on results within their control or influence;
|
|
■
|
We adjust performance targets to include certain
acquisitions and new contracts not reflected in the originally approved operating budget in order to achieve targeted returns
on deployed capital;
|
|
■
|
The use of four performance metrics in our annual
cash incentive plan mitigates the incentive to overperform with respect to any particular financial metric at the expense
of other financial metrics;
|
|
■
|
We set annual performance goals to avoid targets
that, if not achieved, result in a large percentage loss of compensation;
|
|
■
|
Payouts under our performance-based plans remain
at the discretion of our Board of Directors and may be reduced even if targeted performance levels are achieved;
|
|
■
|
Payouts under our performance-based plans can
result in some compensation at levels below full target achievement, rather than an “all-or-nothing” approach;
|
|
■
|
Our NEOs receive annual cash incentive bonus awards
only if cash incentive bonus awards payable to other employees have been made;
|
|
■
|
We have adopted a clawback policy which allows
us to seek recovery of certain incentive cash and equity compensation if it is earned based on inaccurate financial statements;
|
|
■
|
We use RSUs rather than share options for equity
awards because RSUs retain value even in a depressed market so that recipient employees are less likely to take unreasonable
risks to get, or keep, share options “in-the-money”;
|
|
■
|
Equity-based compensation with time-based vesting
over a multi-year schedule accounts for a time horizon of risk and ensures that participating employee interests are aligned
with the long-term interests of our shareholders;
|
|
■
|
Share ownership guidelines require members of
our Board of Directors and our NEOs and other corporate officers to maintain certain ownership levels in Common Shares, which
aligns a portion of their personal wealth to the long-term performance of the Company;
|
|
■
|
We have adopted a policy that prohibits members
of our Board of Directors and our NEOs and other corporate officers from engaging in transactions designed to hedge against
the economic risks associated with an investment in Common Shares or pledging Common Shares; and
|
|
■
|
Our Compensation Committee periodically utilizes
an independent compensation consultant that performs no other services for the Company.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 39
EXECUTIVE COMPENSATION TABLES
Summary Compensation Table
The following table summarizes
the total compensation earned by each of our NEOs in 2020, 2019 and 2018.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share
|
|
Option
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Based
|
|
Based
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
|
Name and
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
|
Principal Position
|
|
Year
|
|
($)(1)
|
|
($)
|
|
($)(2)
|
|
($)
|
|
($)
|
|
($)
|
|
($)(3)
|
|
($)
|
|
Worthing F. Jackman
President and Chief Executive Officer
|
|
2020
|
|
888,462
|
|
—
|
|
2,953,395
|
|
—
|
|
1,125,000
|
|
—
|
|
72,464
|
|
5,039,321
|
|
|
2019
|
|
716,792
|
|
—
|
|
1,559,501
|
|
—
|
|
1,102,500
|
|
—
|
|
29,581
|
|
3,408,374
|
|
|
2018
|
|
611,808
|
|
—
|
|
1,052,540
|
|
—
|
|
680,000
|
|
—
|
|
22,026
|
|
2,366,374
|
|
Mary Anne Whitney
Executive Vice President and Chief Financial Officer
|
|
2020
|
|
493,077
|
|
—
|
|
872,004
|
|
—
|
|
468,000
|
|
—
|
|
46,427
|
|
1,879,508
|
|
|
2019
|
|
425,692
|
|
—
|
|
581,728
|
|
—
|
|
343,000
|
|
—
|
|
26,723
|
|
1,377,143
|
|
|
2018
|
|
338,000
|
|
—
|
|
439,310
|
|
—
|
|
300,000
|
|
—
|
|
13,625
|
|
1,090,935
|
|
Darrell W. Chambliss
Executive Vice President and Chief Operating Officer
|
|
2020
|
|
540,370
|
|
—
|
|
1,110,767
|
|
—
|
|
472,000
|
|
—
|
|
42,441
|
|
2,165,578
|
|
|
2019
|
|
514,356
|
|
—
|
|
900,916
|
|
—
|
|
451,000
|
|
—
|
|
26,238
|
|
1,892,510
|
|
|
2018
|
|
501,615
|
|
—
|
|
904,271
|
|
—
|
|
500,000
|
|
—
|
|
16,408
|
|
1,922,294
|
|
Patrick J. Shea
Executive Vice President, General Counsel and
Secretary
|
|
2020
|
|
440,673
|
|
—
|
|
905,846
|
|
—
|
|
390,000
|
|
—
|
|
39,768
|
|
1,776,287
|
|
|
2019
|
|
419,475
|
|
—
|
|
614,193
|
|
—
|
|
368,000
|
|
—
|
|
30,889
|
|
1,432,557
|
|
|
2018
|
|
408,807
|
|
—
|
|
615,062
|
|
—
|
|
300,000
|
|
—
|
|
22,642
|
|
1,346,511
|
|
James M. Little
Executive Vice President
– Engineering and Disposal
|
|
2020
|
|
434,774
|
|
—
|
|
892,766
|
|
—
|
|
380,000
|
|
—
|
|
38,872
|
|
1,746,412
|
|
|
2019
|
(4)
|
414,481
|
|
—
|
|
606,077
|
|
—
|
|
363,000
|
|
—
|
|
27,154
|
|
1,410,712
|
|
(1)
|
Amounts shown reflect salary earned by the NEOs for each year indicated and reflect increases that Ms. Whitney and Messrs. Jackman, Chambliss, Shea and Little received on February 1, 2020. The increases that Mr. Jackman and Ms. Whitney received are part of a multi-year approach to increase targeted direct compensation towards or within a +/- 10% range of the median market Comparator Group.
|
|
(2)
|
Share based awards consist of (i) RSUs granted under the 2016 Plan, and (ii) PSUs granted under the 2016 Plan. Amounts shown do not reflect compensation actually received by the NEO. Instead, the amounts shown are the grant date fair value of the awards computed in accordance with generally accepted accounting principles in the U.S., excluding estimates of forfeitures related to service-based vesting conditions. A discussion of the fair value of share awards is set forth under Note 1 of the Notes to Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC and the securities commissions or similar regulatory authorities in Canada on February 18, 2021. The table below sets forth the details of the components that make up the fiscal year 2020 share awards for our NEOs. If the first-year performance hurdle is satisfied, annual RSU awards vest in four substantially equal annual installments beginning on the first anniversary of the grant date.
|
|
|
Components of Annual Share Awards
|
|
|
|
|
Value of
|
|
|
Value of Annual
|
|
Performance-Based
|
|
|
Restricted Share
|
|
Restricted Share
|
|
|
Units
|
|
Units
|
|
Name
|
($)
|
|
($)
|
|
Worthing F. Jackman
|
1,476,697
|
|
1,476,697
|
|
Mary Anne Whitney
|
436,002
|
|
436,002
|
|
Darrell W. Chambliss
|
555,384
|
|
555,384
|
|
Patrick J. Shea
|
452,923
|
|
452,923
|
|
James M. Little
|
446,383
|
|
446,383
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 40
|
(3)
|
We make available for business use to our NEOs and other employees a private aircraft. Our general policy is not to permit employees, including the NEOs, to use the aircraft for purely personal use. Occasionally, employees or their relatives or spouses, including relatives or spouses of the NEOs, may derive personal benefit from travel on our aircraft incidental to a business function, such as when an NEO’s spouse accompanies the officer to the location of an event the officer is attending for business purposes. For purposes of our Summary Compensation Table, we value the compensatory benefit to the officer at the incremental cost to us of conferring the benefit, which consists of additional catering and fuel expenses. In the example given, the incremental cost would be nominal because the aircraft would have been used to travel to the event, and the basic costs of the trip would have been incurred, whether or not the NEO’s spouse accompanied the officer on the trip. However, in 2020, we made the aircraft available for limited, purely personal use as a result of commercial air travel disruptions and to reduce possible health concerns related to traveling during the COVID-19 pandemic. On the rare occasions when we permit an employee to use the aircraft for purely personal use, we value the compensation benefit to such employee (including NEOs) at the incremental cost to us of conferring the benefit, which consists of the average weighted fuel expenses, catering expenses, trip-related crew expenses, landing fees and trip-related hangar/parking costs. Since our aircraft is used primarily for business travel, the valuation excludes the fixed costs that do not change based on usage, such as pilots’ compensation, the lease expense of the aircraft and the cost of maintenance. Our valuation of personal use of aircraft as set forth in this Proxy Statement is calculated in accordance with SEC guidance, which may not be the same as valuation under applicable tax regulations.
|
|
|
In 2020, All Other Compensation paid to our NEOs consisted of the following amounts:
|
|
|
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contributions
|
|
|
|
|
|
|
|
|
|
Personal Use
|
|
|
|
|
|
|
|
|
|
Under
|
|
Life
|
|
|
|
|
|
|
|
of Corporate
|
|
Purely
|
|
|
|
|
|
|
|
Nonqualified
|
|
Insurance
|
|
|
|
|
|
|
|
Aircraft
|
|
Personal
|
|
|
|
|
|
Matching
|
|
Deferred
|
|
Premiums
|
|
Professional
|
|
Tax
|
|
|
|
Incidental
|
|
Use of
|
|
Total All
|
|
|
|
Contributions
|
|
Compensation
|
|
Paid by
|
|
Association
|
|
Preparation
|
|
Club
|
|
to Business
|
|
Corporate
|
|
“Other”
|
|
|
|
to 401(k)
|
|
Plan
|
|
Company(a)
|
|
Dues
|
|
Expenses
|
|
Dues
|
|
Function
|
|
Aircraft
|
|
Compensation
|
|
Name
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
Worthing F. Jackman
|
|
—
|
|
14,250
|
|
3,738
|
|
—
|
|
3,763
|
|
16,238
|
|
110
|
|
34,365
|
|
72,464
|
|
Mary Anne Whitney
|
|
14,250
|
|
—
|
|
3,233
|
|
—
|
|
1,200
|
|
7,094
|
|
56
|
|
20,594
|
|
46,427
|
|
Darrell W. Chambliss
|
|
14,250
|
|
—
|
|
5,604
|
|
487
|
|
—
|
|
13,250
|
|
178
|
|
8,672
|
|
42,441
|
|
Patrick J. Shea
|
|
14,250
|
|
—
|
|
2,223
|
|
1,237
|
|
3,550
|
|
9,236
|
|
84
|
|
9,188
|
|
39,768
|
|
James M. Little
|
|
14,250
|
|
—
|
|
4,286
|
|
—
|
|
—
|
|
16,238
|
|
35
|
|
4,063
|
|
38,872
|
|
|
(a)
|
Amounts shown are paid by the Company in connection with life insurance policies made available to all participants in our Nonqualified Deferred Compensation Plan, including the NEOs.
|
|
(4)
|
2019 was the first year in which Mr. Little was a named executive officer.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 41
CEO Pay Ratio
As required by Section 953(b)
of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and Item 402(u) of Regulation S-K, we are providing the following
information about the ratio of the annual total compensation, calculated in accordance with the requirements of Item 402(c)(2)(x)
of Regulation S-K (the “Annual Total Compensation”) of our median employee and the Annual Total Compensation of our
CEO, Mr. Jackman.
For 2020, our last completed
fiscal year, Mr. Jackman’s 2020 Annual Total Compensation was $5,039,321, as reflected in the Summary Compensation Table
included in this Proxy Statement. Our median employee was determined in accordance with the methodology described below to be a
driver whose annual total compensation for 2020 was $58,559. The resulting ratio of our CEO’s pay to the pay of our median
employee is approximately 86.1 to 1.
We have elected to disclose
a supplemental ratio that includes the value of health and dental care benefits paid by the Company. Because these benefits are
provided on a broad, non-discretionary basis, the value is not required to be reported in the Summary Compensation Table. However,
if we were to add the value of these benefits, the total compensation of our CEO would increase by $18,576 and the total compensation
of our median employee would increase by $15,048, and the resulting ratio of our CEO’s annual total compensation to the annual
total compensation of our median employee would be approximately 68.7 to 1.
As of December 31, 2020,
our employee population consisted of 18,933 active employees, 9,788 of whom are commercial truck drivers and 1,610 of whom are
mechanics. There were 15,978 employees located in the United States and 2,955 employees located in Canada. We applied a Canadian
dollar to U.S. dollar exchange rate to the compensation paid in Canadian dollars based on the average exchange rate in 2020. We
determined our median employee by examining 2020 W-2 box 5 amounts and foreign equivalent taxable income amounts for all of our
full time and part time employees, excluding our CEO, who were employed by us on December 31, 2020. We did not include those employees
on leave as of December 31, 2020. In addition, we did not include temporary agency employees whose compensation is determined by
the agency and who are not considered our employees for purposes of the pay ratio calculation.
The pay ratios reported above
are reasonable estimates calculated in a manner consistent with SEC rules, based on our internal records and the methodology described
above. The SEC rules for identifying the median compensated employee allow companies to adopt a variety of methodologies, to apply
certain exclusions and to make reasonable estimates and assumptions that reflect their employee populations and compensation practices.
Accordingly, the pay ratio reported by other companies may not be comparable to the pay ratios reported above, as other companies
have different employee populations and compensation practices and may use different methodologies, exclusions, estimates and assumptions
in calculating their own pay ratios.
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 42
Grants of Plan Based Awards in Fiscal year 2020
The following table summarizes the amount of awards
under the MICP and equity awards granted to our NEOs by the Company in 2020.
|
|
|
|
|
|
|
Estimated Potential Payouts Under
|
|
Estimated Future Payouts Under
|
|
All Other Share
|
|
Grant Date
|
|
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards(2)
|
|
Equity Incentive Plan Awards
|
|
Awards: Number
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Common
|
|
of Share
|
|
|
|
|
Award
|
|
Grant
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Threshold
|
|
Target
|
|
Maximum
|
|
Shares or Units
|
|
Awards
|
|
|
Name
|
|
Type(1)
|
|
Date
|
|
($)
|
|
($)
|
|
($)
|
|
(#)
|
|
(#)
|
|
(#)
|
|
(#)(3)
|
|
($)(4)
|
|
|
Worthing F. Jackman
|
|
RSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
14,225
|
|
|
1,476,697
|
|
|
|
|
PSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
0
|
|
14,225
|
|
35,562
|
|
—
|
|
|
1,476,697
|
(5)
|
|
|
|
MICP
|
|
—
|
|
225,000
|
|
1,125,000
|
|
2,250,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Mary Anne Whitney
|
|
RSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,200
|
|
|
436,002
|
|
|
|
|
PSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
0
|
|
4,200
|
|
10,500
|
|
—
|
|
|
436,002
|
(5)
|
|
|
|
MICP
|
|
—
|
|
70,000
|
|
350,000
|
|
700,000
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Darrell W. Chambliss
|
|
RSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
5,350
|
|
|
555,384
|
|
|
|
|
PSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
0
|
|
5,350
|
|
13,375
|
|
—
|
|
|
555,384
|
(5)
|
|
|
|
MICP
|
|
—
|
|
91,982
|
|
459,911
|
|
919,822
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
Patrick J. Shea
|
|
RSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,363
|
|
|
452,923
|
|
|
|
|
PSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
0
|
|
4,363
|
|
10.907
|
|
—
|
|
|
452,923
|
(5)
|
|
|
|
MICP
|
|
—
|
|
75,015
|
|
375,074
|
|
750,147
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
James M. Little
|
|
RSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4,300
|
|
|
446,383
|
|
|
|
|
PSU
|
|
2/14/20
|
|
—
|
|
—
|
|
—
|
|
0
|
|
4,300
|
|
10,750
|
|
—
|
|
|
446,383
|
(5)
|
|
|
|
MICP
|
|
—
|
|
74,122
|
|
370,608
|
|
741,215
|
|
—
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
|
(1)
|
“RSU” refers to restricted share units granted under the 2016 Plan. “PSU” refers to performance-based restricted share units granted under the 2016 Plan. “MICP” refers to cash awards made pursuant to our Management Incentive Compensation Program, which is administered pursuant to the 2016 Plan.
|
|
(2)
|
In the case of the MICP, the target incentive amounts shown in this column reflect our annual incentive bonus plan awards under the MICP and represent the target awards pre-established as a percentage of salary. The maximum is the greatest payout which can be made if the pre-established maximum performance level is met or exceeded. Actual annual incentive bonus amounts earned by the NEOs for 2020 under the MICP are reflected in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table.
|
|
(3)
|
Share awards consist of RSUs granted under the 2016 Plan on February 14, 2020. Assuming that the first-year performance hurdle is satisfied, which in the case of these grants it was, the RSUs vest in equal, annual installments over the four-year period following the date of grant, beginning on the first anniversary of the date of grant. See “Compensation Discussion and Analysis – Equity-Based Compensation” for more information regarding RSU awards.
|
|
(4)
|
The value of a share award is based on the fair value as of the grant date of such award computed in accordance with generally accepted accounting principles in the U.S., excluding estimates of forfeitures related to service-based vesting conditions. A discussion of the fair value of share awards is set forth under Note 1 of the “Notes to Consolidated Financial Statements” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC and the securities commissions or similar regulatory authorities in Canada on February 18, 2021.
|
|
(5)
|
Represents the range of possible payouts of Common Shares upon the vesting of PSUs granted in fiscal year 2020 under the 2016 Plan. Awards are capped at the maximum, and no awards will vest unless the pre-established threshold performance level is met or exceeded. The “Grant Date Fair Value of Share Awards” represents the value of PSUs based on the expected outcome as of the date of grant. This result is based on (i) achieving the target level of a return on invested capital, or ROIC; and (ii) achieving the target level of a free cash flow/share CAGR goal, each of which is weighted 50%. See “Compensation Discussion and Analysis – Equity-Based Compensation” for more information regarding PSU awards.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 43
Outstanding Equity Awards at 2020 Fiscal Year
End
The following table summarizes RSUs and other
equity awards that have not vested and related information for each of our NEOs as of December 31, 2020.
|
|
|
|
|
|
|
Share Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive Plan
|
|
Equity Incentive Plan
|
|
|
|
|
|
|
|
Number of
|
|
|
Market Value of
|
|
Awards: Number of
|
|
Awards: Market or Payout
|
|
|
|
|
|
|
|
Shares or Units
|
|
|
Shares or Units
|
|
Unearned Shares, Units
|
|
Value of Unearned Shares,
|
|
|
|
|
|
|
|
That Have Not
|
|
|
That Have Not
|
|
or Other Rights That
|
|
Units or Other Rights That
|
|
|
|
Award
|
|
Grant
|
|
Vested
|
|
|
Vested
|
|
Have Not Vested
|
|
Have Not Vested
|
|
Name
|
|
Type(1)
|
|
Date
|
|
(#)
|
|
|
($)(6)
|
|
(#)
|
|
($)(7)
|
|
Worthing F. Jackman
|
|
RSU
|
|
02/24/17
|
|
|
2,773
|
(2)
|
|
284,427
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/20/18
|
|
|
4,854
|
(3)
|
|
497,875
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/15/19
|
|
|
7,061
|
(4)
|
|
724,247
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/14/20
|
|
|
14,225
|
(5)
|
|
1,459,058
|
|
—
|
|
—
|
|
|
|
PSU
|
|
02/20/18
|
|
|
—
|
|
|
—
|
|
5,228
|
|
536,236
|
|
|
|
PSU
|
|
02/15/19
|
|
|
—
|
|
|
—
|
|
9,415
|
|
965,697
|
|
|
|
PSU
|
|
02/14/20
|
|
|
—
|
|
|
—
|
|
14,225
|
|
1,459,058
|
|
Mary Anne Whitney
|
|
RSU
|
|
02/24/17
|
|
|
898
|
(2)
|
|
92,108
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/20/18
|
|
|
2,026
|
(3)
|
|
207,807
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/15/19
|
|
|
2,634
|
(4)
|
|
270,169
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/14/20
|
|
|
4,200
|
(5)
|
|
430,794
|
|
—
|
|
—
|
|
|
|
PSU
|
|
02/20/18
|
|
|
—
|
|
|
—
|
|
2,182
|
|
223,808
|
|
|
|
PSU
|
|
02/15/19
|
|
|
—
|
|
|
—
|
|
3,512
|
|
360,226
|
|
|
|
PSU
|
|
02/14/20
|
|
|
—
|
|
|
—
|
|
4,200
|
|
430,794
|
|
Darrell W. Chambliss
|
|
RSU
|
|
02/24/17
|
|
|
2,413
|
(2)
|
|
247,501
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/20/18
|
|
|
4,171
|
(3)
|
|
427,819
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/15/19
|
|
|
4,079
|
(4)
|
|
418,383
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/14/20
|
|
|
5,350
|
(5)
|
|
548,750
|
|
—
|
|
—
|
|
|
|
PSU
|
|
02/20/18
|
|
|
—
|
|
|
—
|
|
4,491
|
|
460,642
|
|
|
|
PSU
|
|
02/15/19
|
|
|
—
|
|
|
—
|
|
5,439
|
|
557,878
|
|
|
|
PSU
|
|
02/14/20
|
|
|
—
|
|
|
—
|
|
5,350
|
|
548,750
|
|
Patrick J. Shea
|
|
RSU
|
|
02/24/17
|
|
|
1,626
|
(2)
|
|
166,779
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/20/18
|
|
|
2,837
|
(3)
|
|
290,991
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/15/19
|
|
|
2,781
|
(4)
|
|
285,247
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/14/20
|
|
|
4,363
|
(5)
|
|
447,513
|
|
—
|
|
—
|
|
|
|
PSU
|
|
02/20/18
|
|
|
—
|
|
|
—
|
|
3,055
|
|
313,351
|
|
|
|
PSU
|
|
02/15/19
|
|
|
—
|
|
|
—
|
|
3,708
|
|
380,330
|
|
|
|
PSU
|
|
02/14/20
|
|
|
—
|
|
|
—
|
|
4,363
|
|
447,513
|
|
James M. Little
|
|
RSU
|
|
02/24/17
|
|
|
1,605
|
(2)
|
|
164,625
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/20/18
|
|
|
2,803
|
(3)
|
|
287,504
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/15/19
|
|
|
2,744
|
(4)
|
|
281,452
|
|
—
|
|
—
|
|
|
|
RSU
|
|
02/14/20
|
|
|
4,300
|
(5)
|
|
441,051
|
|
—
|
|
—
|
|
|
|
PSU
|
|
02/20/18
|
|
|
—
|
|
|
—
|
|
3,018
|
|
309,556
|
|
|
|
PSU
|
|
02/15/19
|
|
|
—
|
|
|
—
|
|
3,659
|
|
375,304
|
|
|
|
PSU
|
|
02/14/20
|
|
|
—
|
|
|
—
|
|
4,300
|
|
441,051
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 44
|
(1)
|
“RSU” refers to restricted share units granted under the 2016 Plan. “PSU” refers to performance-based restricted share units granted under the 2016 Plan.
|
|
(2)
|
Assuming that the first-year performance hurdle is satisfied, which in the case of these grants it was, the RSUs vest in equal installments on each of the first four anniversaries of the grant date of February 24, 2017.
|
|
(3)
|
Assuming that the first-year performance hurdle is satisfied, which in the case of these grants it was, the RSUs vest in equal installments on each of the first four anniversaries of the grant date of February 20, 2018.
|
|
(4)
|
Assuming that the first-year performance hurdle is satisfied, which in the case of these grants it was, the RSUs vest in equal installments on each of the first four anniversaries of the grant date of February 15, 2019.
|
|
(5)
|
Assuming that the first-year performance hurdle is satisfied, which in the case of these grants it was, the RSUs vest in equal installments on each of the first four anniversaries of the grant date of February 14, 2020.
|
|
(6)
|
Based on the closing price of Common Shares of $102.57 on the NYSE on December 31, 2020, the last trading day of the 2020 fiscal year.
|
|
(7)
|
Represents unearned Common Shares under the PSU awards granted in February 2018, February 2019 and February 2020. Based on guidance provided by the SEC, the targeted potential number of Common Shares for such grants has been assumed. The amounts shown include the full award for the performance periods ending on December 31, 2020, December 31, 2021 and December 31, 2022. The PSUs will vest, if at all, within 15 business days following the date on which the determination by the Compensation Committee is made with respect to the achievement of the performance goals, but in no event shall the vesting be later than March 15, 2021, March 15, 2022 and March 15, 2023, respectively.
|
Shares Vested in Fiscal year 2020
The following table summarizes
each vesting of RSUs, PSUs and related information for each of our NEOs on an aggregated basis during 2020.
|
|
|
Share Awards
|
|
|
|
Number of Shares
|
|
Value Realized
|
|
|
|
Acquired on Vesting
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
($)
|
|
Worthing F. Jackman
|
|
23,587
|
|
2,398,695
|
|
Mary Anne Whitney
|
|
8,049
|
|
818,864
|
|
Darrell W. Chambliss
|
|
19,711
|
|
2,003,250
|
|
Patrick J. Shea
|
|
13,291
|
|
1,350,826
|
|
James M. Little
|
|
13,261
|
|
1,347,514
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 45
Pension Benefits in Fiscal year 2020
We do not sponsor any qualified
or non-qualified defined benefit plans for any of our executive officers, including the NEOs.
Nonqualified Deferred Compensation in Fiscal
year 2020
The following table summarizes
the participation of our NEOs during 2020 in our Nonqualified Deferred Compensation Plan, which is our only plan that provides
for the deferral of compensation on a basis that is not tax-qualified.
|
|
|
Executive
|
|
Registrant
|
|
|
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
Contributions
|
|
Aggregate
|
|
Aggregate
|
|
Balance at
|
|
|
|
in Last
|
|
in Last
|
|
Earnings in Last
|
|
Withdrawals/
|
|
Last Fiscal
|
|
|
|
Fiscal Year
|
|
Fiscal Year
|
|
Fiscal Year
|
|
Distributions
|
|
Year End
|
|
Name
|
|
($)(1)
|
|
($)(1)
|
|
($)(2)
|
|
($)
|
|
($)(3)
|
|
Worthing
F. Jackman
|
|
39,000
|
|
14,000
|
|
25,682
|
|
(57,598)
|
|
216,340
|
|
Mary
Anne Whitney
|
|
197,500
|
|
—
|
|
198,327
|
|
(179,884)
|
|
1,346,147
|
|
Darrell
W. Chambliss
|
|
25,198
|
|
198
|
|
658,585
|
|
(286,597)
|
|
5,849,764
|
|
Patrick
J. Shea
|
|
45,937
|
|
323
|
|
85,094
|
|
—
|
|
726,385
|
|
James
M. Little
|
|
—
|
|
—
|
|
95,860
|
|
(30,064)
|
|
723,577
|
|
(1)
|
Amounts in these columns represent base salary and cash annual incentive each NEO elected to defer and our annual matching contributions in lieu of matching contributions under our 401(k) plan. Contributions by an NEO are reported in the Summary Compensation Table under “Salary”, “Bonus” and/ or “Non-Equity Incentive Plan Compensation” and matching contributions we make to an NEO’s account are reported in the Summary Compensation Table under “All Other Compensation.” The Company does not make matching contributions on RSUs that were previously deferred into our Nonqualified Deferred Compensation Plan.
|
|
(2)
|
Amounts in this column are not included in any other amounts disclosed in this Proxy Statement, as the amounts are not preferential earnings. Instead, earnings disclosed are determined by reference to the returns on one or more select mutual funds, as determined by the participant, that are also available for investment by the general public, or with regard to RSUs deferred into the Company’s Nonqualified Deferred Compensation Plan in years prior to 2015, Common Shares. Beginning in 2015, participating employees were no longer permitted to defer RSU grants.
|
|
(3)
|
Amounts shown in this column include amounts reported as compensation to the NEO in the Summary Compensation Table in our previous proxy statements or annual reports on Form 10-K.
|
The NEOs and certain other
highly compensated employees are entitled to participate in the Nonqualified Deferred Compensation Plan, which we put in place
to mitigate the impact of our officers and other highly compensated employees being unable to make the maximum contribution permitted
under the 401(k) plan due to certain limitations imposed by the IRC. The Nonqualified Deferred Compensation Plan allows an eligible
employee to voluntarily defer receipt of up to 80% of the employee’s base salary, and up to 100% of bonuses and commissions
and, prior to 2015, RSU grants made by the Company. Beginning in 2015, participating employees were no longer permitted to defer
receipt of RSU grants. We make a matching contribution of 100% of every dollar of a participating employee’s pre-tax eligible
contributions until the employee’s contributions equal five percent of the employee’s eligible compensation, less the
amount of any match we make on behalf of the employee under the Company-sponsored 401(k) plan, and subject to certain deferral
limitations imposed by the IRC on 401(k) plans. Our matching contributions are 100% vested when made. Except for RSUs that were
previously deferred, the Company also credits an amount reflecting a deemed return to each participant’s deferred compensation
account periodically, based on the returns of various mutual funds or measurement funds selected by the participant. RSUs that
were previously deferred are credited as Common Shares, which had a 2020 annual rate of return of approximately 13.9%. The earnings
on an employee’s deferred compensation may exceed or fall short of market rate returns, depending on the performance of the
funds selected compared to the markets in general.
In addition, during 2017,
the Company amended the Nonqualified Deferred Compensation Plan to allow any participant who has attained age 55, previously elected
to defer RSUs, and also elected to have his or her deferred RSUs distributed as a series of installment payments, to elect to have
some or all of the portion of the participant’s account credited with RSUs instead credited with an investment in one or
more of the measurement funds provided under the plan’s terms. The Company made this amendment to enable participants with
deferred RSUs and who were approaching retirement age to diversify their investments within the plan.
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 46
The investment options offered
by our plan administrator and their annual rates of return for the calendar year ended December 31, 2020, are set forth in the
following table.
|
|
Rate of Return
|
|
Name of Investment Option
|
in 2020
|
|
American Century VP Mid Cap Value I
|
1.21%
|
|
American Funds IS International 2
|
13.97%
|
|
Legg Mason Partners Clearbridge Small Cap Growth
|
43.26%
|
|
BNY Mellon IP Small Cap Stock Index Svc
|
22.21%
|
|
Franklin Rising Dividends VIP 2
|
15.97%
|
|
Franklin Small Cap Value VIP 2
|
5.19%
|
|
Ivy VIP High Income II
|
6.03%
|
|
Janus Henderson VIT Balanced Svc
|
14.03%
|
|
Janus Henderson VIT Enterprise Svc
|
19.18%
|
|
MFS International Growth
|
15.50%
|
|
MFS VIT II International Intrinsic Value
|
20.21%
|
|
MFS VIT Value Svc
|
3.22%
|
|
NVIT Mid Cap Index I
|
13.11%
|
|
PIMCO VIT Real return Admin
|
8.64%
|
|
Pioneer Bond VCT I
|
8.70%
|
|
T. Rowe Price Limited-Term Bond
|
4.70%
|
|
VanEck VIP Emerging Markets Initial
|
17.25%
|
|
VanEck VIP Global Hard Assets Initial
|
19.11%
|
|
Vanguard VIF Capital Growth
|
17.47%
|
|
Vanguard VIF Money Market
|
0.52%
|
|
Vanguard VIF REIT Index
|
(4.85%)
|
Distributions from the Nonqualified
Deferred Compensation Plan are triggered by the occurrence of certain events, including termination of employment and scheduled
in-service distributions as allowed by the Internal Revenue Service. Upon termination of employment or the scheduled in-service
date, as applicable, a participant will receive a distribution from the plan in the form he or she previously selected—either
in a lump sum or in annual installments over any period selected, up to fifteen years. Payments will commence within 60 days after
the last day of the six-month period immediately following the termination date or the scheduled in-service date, as applicable.
If a participant becomes disabled, he or she will receive his or her entire account balance in a lump sum within 60 days of the
date on which he or she became disabled. Upon the death of a participant during employment or while receiving his or her benefits
under the plan following termination of employment, his or her unpaid account balance will be paid to his or her beneficiary in
a lump sum within 60 days of the date the plan committee is notified of his or her death.
Participants also elect whether
to receive a distribution of their entire account balance in a lump sum upon a change in control of the Company, as defined in
the plan, or whether to have their account balance remain in the plan after a change in control. In the absence of such an election,
a participant will receive a distribution after a change in control occurs. Participants may also choose to receive lump sum distributions
of all or a portion of their account balances upon optional, scheduled distribution dates or upon an unforeseeable financial emergency.
Optional distribution dates must be a January 1 (March 1 for deferred RSUs) that is at least three years after the end of the plan
year in which the deferral election is made. Optional distributions may be postponed, subject to certain conditions specified in
the plan. Distributions upon an unforeseeable financial emergency are also subject to certain restrictions specified in the plan.
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 47
Equity Compensation Plan Information
The following is a summary
of all of our equity compensation plans and individual arrangements that provide for the issuance of equity securities as compensation,
as of December 31, 2020.
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
|
|
|
|
|
|
|
Number of securities
|
|
|
|
|
|
|
|
|
|
|
remaining available for
|
|
|
|
|
|
|
|
|
|
|
future issuance under
|
|
|
|
|
Number of securities to
|
|
|
Weighted-average
|
|
|
equity compensation
|
|
|
|
|
be issued upon exercise
|
|
|
exercise price of
|
|
|
plans (excluding
|
|
|
|
|
of outstanding warrants
|
|
|
outstanding warrants
|
|
|
securities reflected in
|
|
|
Equity Compensation Plan Category
|
|
and rights
|
|
|
and rights
|
|
|
column (a))
|
|
|
Approved by shareholders(1)
|
|
|
1,874,691
|
(2)
|
|
$
|
86.41
|
(3)
|
|
|
4,831,779
|
(4)
|
|
Not approved by shareholders
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
TOTAL
|
|
|
1,874,691
|
|
|
$
|
86.41
|
(3)
|
|
|
4,831,779
|
|
|
(1)
|
Consists of the following plans approved by the Company’s and Progressive Waste’s shareholders, as applicable, including the assumptions thereof by the Company on June 1, 2016: (a) the 2016 Plan; (b) the 2014 Incentive Award Plan; (c) the Third Amended and Restated 2004 Equity Incentive Plan; and (d) the Amended and Restated Share Option Plan adopted by Progressive Waste on July 22, 2009.
|
|
(2)
|
Includes an aggregate of 950,385 RSUs, 434,558 PSUs, and 489,748 warrants.
|
|
(3)
|
Excludes RSUs, PSUs and DSUs.
|
|
(4)
|
The remaining 4,831,779 Common Shares reserved for issuance under the 2016 Plan will be issuable upon the exercise of future warrants or share option grants or pursuant to future restricted share, RSU or performance awards that vest upon the attainment of prescribed performance milestones or the completion of designated service periods. The Board of Directors unanimously adopted resolutions in 2014 approving the reduction of the shares available for future issuance under the Third Amended and Restated 2004 Equity Incentive Plan to zero, and the Board of Directors and the Executive Committee of the Company unanimously adopted resolutions in 2016 and 2017 approving the reduction of shares available for future issuance under each of the 2014 Incentive Award Plan and the Amended and Restated Share Option Plan to zero, and as a result no further awards will be granted under the Third Amended and Restated 2004 Equity Incentive Plan, the 2014 Incentive Award Plan or the Amended and Restated Share Option Plan.
|
On June 1, 2016, the Board
of Directors adopted the 2016 Plan, which was approved by Progressive Waste’s shareholders on May 26, 2016. On July 24, 2017,
the Board of Directors approved certain housekeeping amendments to the 2016 Plan. On July 24, 2018, the Board of Directors approved
certain additional housekeeping amendments to the 2016 Plan. None of the housekeeping amendments to the 2016 Plan required approval
of the Company’s shareholders. A summary of the 2016 Plan is attached as Appendix B. The 2016 Plan, as amended, is
administered by the Compensation Committee and provides that the aggregate number of Common Shares which may be issued from treasury
pursuant to awards made under the 2016 Plan is 7,500,000 Common Shares, representing 2.86%(1) of our issued and outstanding
Common Shares. Awards under the 2016 Plan may be made to employees, consultants and non-employee directors and may be made in the
form of share options, warrants, restricted shares, RSUs, performance awards (which may be paid in cash, Common Shares, or a combination
thereof), dividend equivalent awards (representing a right of the holder thereof to receive the equivalent value (which may be
paid in cash or Common Shares) of dividends paid on Common Shares), and share payments (a payment in the form of Common Shares
or a share option or other right to purchase Common Shares as part of a bonus, defined compensation or other arrangement). The
2016 Plan also provides for awards to non-employee directors in the form of DSUs, which represent the right to receive a cash payment
or its equivalent in Common Shares (or a combination of cash and Common Shares), or which may at the time of grant be expressly
limited to settlement only in cash and not in Common Shares.
As of December 31, 2020,
DSUs, RSUs, PSUs and Warrants were the only forms of awards granted under the 2016 Plan. As of December 31, 2020, under the 2016
Plan, there were 13,956 DSUs outstanding, representing 0.005% of our Common Shares then issued and outstanding, 772,625 RSUs outstanding,
representing 0.294% of our Common Shares then issued and outstanding, 434,558 PSUs outstanding, representing 0.165% of our Common
Shares then issued and outstanding, 483,663 Warrants outstanding, representing 0.184% of our Common Shares then issued and outstanding,
and 4,831,779 awards remained available for grant, representing 1.838% of our Common Shares then issued and outstanding.
The annual burn rate under
the 2016 Plan for the fiscal years ended 2018, 2019 and 2020 was 0.320%, 0.248% and 0.244%, respectively. The annual burn rate
is calculated as (x) the number of securities (i.e., DSUs, RSUs, PSUs and Warrants) granted thereunder during the applicable fiscal
year, divided by (y) the weighted average number of shares outstanding in 2020, calculated in accordance with the CPA Canada Handbook.
|
(1)
|
Based on 262,564,306 Common Shares outstanding as of the Record Date.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 48
Potential Payments upon Termination or Change
in Control
Severance Arrangements in Effect in 2020
During 2020,
our NEOs were eligible to receive separation benefits and change in control payments pursuant to the participation letter
agreements under the Separation Benefits Plan that were entered into on July 25, 2019 for Messrs.
Jackman, Chambliss, Shea and Little, and October 19, 2018 for Ms. Whitney. On February 1,
2021, in connection with Ms. Whitney’s promotion to Executive Vice President and Chief
Financial Officer, a subsidiary of the Company entered into a new participation letter agreement under the Separation Benefits
Plan with Ms. Whitney pursuant to which Ms. Whitney is eligible to receive separation benefits and change in control payments
that are substantially similar to those of the other NEOs. The following discussion assumes
that a termination or resignation of employment occurred on December 31, 2020, as applicable,
and describes the terms of these payments and benefits and the circumstances in which they
will be paid or provided.
Under the
terms of the Separation Benefits Plan and their respective participation letter agreements, each of Messrs. Jackman, Chambliss,
Little and Shea is entitled to receive separation pay upon a termination by us without “cause” or resignation by such
NEO for “good reason” prior to a change in control. The amount payable to Messrs.
Jackman, Chambliss, Shea and Little is: (i) a cash payment equal to 2.99x of his then-current
base salary; and (ii) an amount equal to the target bonus for the year in which the termination occurs, which
is 125% of Mr. Jackman’s base salary at the time of termination, and 85% of Messrs. Chambliss’, Shea’s and Little’s
base salary at the time of termination, payable in three equal installments over the two-year
period following termination. Under the terms of the Separation Benefits Plan and her participation
letter agreement, Ms. Whitney is entitled to receive separation pay upon a termination by us
without “cause” consisting of a cash payment equal to (i) her then-current base salary, and (ii) an amount equal to
the target bonus for the year in which the termination occurs, which is 70% of her base salary
at the time of termination, payable in installments over the 12-month period following termination.
In addition,
under the terms of the Separation Benefits Plan, if an NEO is entitled to receive separation pay in connection with his or
her termination of employment, then the NEO is entitled to (i) full accelerated vesting of his or
her outstanding but unvested time-based equity awards; (ii) the designated performance goals
of the applicable NEO’s performance-based equity awards shall be deemed to have been
satisfied (and, for any award with different levels of potential payment, such performance shall be deemed to be at the target
level), any remaining vesting conditions shall be deemed to be satisfied on the NEO’s
date of termination and such awards shall be settled as soon as administratively practicable
thereafter; and (iii) with respect to any outstanding share options held by the applicable NEO, an
extended post-termination exercise period through the earlier of the third anniversary of the termination date or the expiration
of the original term of such share options. The Company would also pay to each NEO who is
entitled to receive separation pay an amount equal to the Company’s portion (but not
the NEO’s portion) of the cost of medical, dental and other health plan insurance for the NEO (and,
except for Ms. Whitney, the NEO’s spouse and children) at the rate in effect on the date of termination for a period of
(i) for each of Messrs. Jackman, Chambliss, Shea and Little, two years from the date of termination;
and (ii) for Ms. Whitney, one year from the date of termination (the “NEO Health Insurance
Benefit”). Finally, the Company would pay as incurred Ms. Whitney’s expenses, up to $15,000,
associated with career counseling and resume development (the “Outplacement Benefit”). As a condition to an NEO’s
receipt of any severance benefits under the Separation Benefits Plan, the NEO is required
to release and waive (and not revoke) all claims against the WCI Group. The Separation Benefits
Plan defines “WCI Group” as the Company and each of its subsidiaries and affiliates.
Each NEO
is also entitled to the foregoing benefits if such NEO’s employment is terminated as a result of the NEO’s death or
disability, except that (i) in the event of death, the estate shall not receive the NEO Health
Insurance Benefit or the Outplacement Benefit, and (ii) in the event of disability, the NEO
shall not receive the Outplacement Benefit.
Upon a termination
by us without cause or resignation by the NEO for good reason within two years after a change in control, the NEOs are
each entitled to receive the benefits described above for a termination without cause, payable in a lump sum on or within 60 days
following the date of termination. Further, the Separation Benefits Plan includes a so-called “best pay” provision
where payments and benefits provided on account of a change in control shall be made to such
participating NEOs in full or in such lesser amount as would result in no portion of the payments
being subject to an excise tax under Section 280g and Section 4999 of the IRC, whichever of the foregoing
amounts is greater on an after-tax basis.
In consideration
of the above severance benefits, the NEOs must abide by certain restrictive covenants in the Separation Benefits Plan,
including a commitment by each NEO not to compete with the Company in a restricted territory and
not to solicit our customers or employees for 12 months following the date of such NEO’s
termination of employment.
For purposes
of the Separation Benefits Plan, “good reason” is generally defined as: (i) assignment to the NEO of duties inconsistent
with and resulting in a diminution of the NEO’s position (including status, offices, titles, responsibilities and reporting
requirements), authority, duties or responsibilities as they existed on the effective date
of the Separation Benefits Plan; or any other action by the Company which results in a diminution
in such position, authority, duties or responsibilities; a substantial alteration in the title(s) of the NEO
(so long as the existing corporate structure of the WCI Group is maintained); provided, however, that the NEO’s failure
to be in the same position (including status, offices, titles, responsibilities and reporting requirements) with the Company will
constitute “good
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 49
reason”; (ii) the relocation
of the NEO’s principal place of employment to a location more than fifty (50) miles from its present location without the
NEO’s prior approval; (iii) a material reduction by the Company in the NEO’s total annual cash compensation (base and
bonus) without the NEO’s prior approval; (iv) on or after a change in control, a material reduction by the Company in the
NEO’s total annual compensation (base, bonus, and equity opportunities) without the NEO’s prior approval; (v) a failure
by the WCI group to continue in effect, without substantial change, any benefit plan or arrangement in which the NEO was participating
or the taking of any action by the WCI group which would adversely affect the NEO’s participation in or materially reduce
the NEO’s benefits under any benefit plan (unless such changes apply equally to all other management employees of the Company);
(vi) any material breach by the Company of any provision of the Separation Benefits Plan without the NEO having committed any material
breach of the NEO’s obligations thereunder, which breach is not cured within twenty (20) days following written notice thereof
to the Company of such breach; or (vii) the failure of the Company to obtain the assumption of the plan by any successor entity
that causes the NEO to be employed by an entity that is not a member of the WCI Group.
For the purposes of the Separation
Benefits Plan, “cause” is defined as: (i) a material breach of any of the terms of the agreement or any other agreement
with the Company or any member of the WCI Group or any policy of the WCI group; (ii) a breach of any of the provisions of the confidentiality,
property, non-competition and non-solicitation provisions of the Separation Benefits Plan; (iii) gross negligence or willful misconduct
of a material nature in connection with the performance of the NEO’s duties; (iv) conviction of (or pleading guilty or no
contest or nolo contendere to) a felony; or (v) an intentional act of dishonesty or misappropriation (or attempted misappropriation)
of property belonging to the Company or any member of the WCI Group. Further, for the purposes of the Separation Benefits Plan,
a “change in control” is deemed to have occurred if:
|
■
|
there shall be consummated (a) any reorganization, liquidation or consolidation of the Company, or any merger or other business combination of the Company with any other corporation, other than any such merger or other business combination that would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented by the voting securities of the Company or such surviving entity outstanding immediately after such transaction; or (b) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company; or
|
|
|
|
|
■
|
any person (as defined in Section 13(d) and 14(d) of the Exchange Act), shall become the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the Company’s outstanding voting securities; or
|
|
|
|
|
■
|
during any period of two consecutive years, individuals who at the beginning of such period constituted the entire Board of Directors shall cease for any reason to constitute at least one-half of the membership thereof unless the election, or the nomination for election by the Company’s shareholders, of each new director was approved by a vote of at least one-half of the directors then still in office who were directors at the beginning of the period.
|
The NEOs’ participation
letter agreements under the Separation Benefits Plan further deem a “change in control” to have occurred if:
|
(i)
|
any “person”
(as defined in Section 13(d) and 14(d) of the Exchange Act), shall become the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% or more of the outstanding voting securities of a
subsidiary of the Company that owns all or substantially all of the WCI group’s United States operations;
|
|
|
|
|
(ii)
|
there is a reorganization,
merger or other business combination of a subsidiary of the Company that owns all or substantially all of the WCI group’s
United States operations with any other corporation, other than any such merger or other combination that would result in
the voting securities of the subsidiary outstanding immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving entity) at least 50% of the total voting power represented
by the voting securities of the subsidiary or such surviving entity outstanding immediately after such transaction; or
|
|
|
|
|
(iii)
|
there is a direct or
indirect sale, lease, exchange or other transfer (in one transaction or a series of related transactions) by the WCI group
of all, or substantially all, of its United States operations.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 50
Potential Payments Tables
The following tables estimate
the payments we would be obligated to make to each of our NEOs as a result of the NEO’s termination (including, in certain
cases, in connection with a change in control of the Company) or resignation, assuming such termination or resignation occurred
on December 31, 2020. We have calculated the estimated payments to meet SEC disclosure requirements. The estimated payments are
not necessarily indicative of the actual amounts any of our NEOs would receive in such circumstances.
For illustrative purposes
only, the tables assume that: (a) a termination or resignation of employment occurred on December 31, 2020, as applicable; and
(b) the price per share of the Common Shares is $102.57, the closing price on December 31, 2020, on the NYSE, the last trading
day of the 2020 fiscal year.
In addition to the amounts
reflected in the tables, on termination of employment, all vested deferred compensation and other retirement benefits payable to
the employee under benefit plans in which he or she then participated would be paid to the NEO in accordance with the provisions
of the respective plans. These plans include our voluntary 401(k) plan and our Nonqualified Deferred Compensation Plan.
WORTHING F. JACKMAN, PRESIDENT AND CHIEF EXECUTIVE
OFFICER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
by Employee
|
|
|
in Connection
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Employee For
|
|
|
Without Good
|
|
|
with Change
|
|
|
|
|
for Cause
|
|
|
Without Cause
|
|
|
on Disability
|
|
|
on Death
|
|
|
Good Reason
|
|
|
Reason
|
|
|
in Control
|
|
|
Base Salary
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
Bonus
|
|
|
—
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
(2)
|
|
|
—
|
|
|
Severance Payment
|
|
|
—
|
|
|
|
3,853,153
|
(4)
|
|
|
3,853,153
|
(4)
|
|
|
3,816,000
|
(5)
|
|
|
3,816,000
|
(4)
|
|
|
—
|
|
|
|
3,853,153
|
(4)
|
|
Unvested Share Options, Restricted Share Units and Other Equity in Company
|
|
|
—
|
(3)
|
|
|
5,926,597
|
(6)
|
|
|
5,926,597
|
(6)
|
|
|
5,926,597
|
(6)
|
|
|
5,926,597
|
(6)
|
|
|
—
|
(3)
|
|
|
5,926,597
|
(7)
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
9,779,750
|
|
|
$
|
9,779,750
|
|
|
$
|
9,742,597
|
|
|
$
|
9,742,597
|
|
|
$
|
—
|
|
|
$
|
9,779,750
|
|
|
(1)
|
Reflects the employee’s base salary to the date of termination, paid in a lump sum, which is assumed to have been paid in full.
|
|
(2)
|
Employee will forfeit his bonus for the year in which such a termination occurs.
|
|
(3)
|
All of employee’s unvested share options, RSUs, PSUs and other equity awards will be forfeited upon such a termination.
|
|
(4)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Jackman’s then-current base salary; (ii) Mr. Jackman’s target bonus for the year in which the termination occurs, which is 125% of his base salary at the time of termination; and (iii) the NEO Health Insurance Benefit.
|
|
(5)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Jackman’s then-current base salary; and (ii) Mr. Jackman’s target bonus for the year in which the termination occurs, which is 125% of his base salary at the time of termination.
|
|
(6)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Jackman does not currently hold any share options.
|
|
(7)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. Pursuant to the Separation Benefits Plan, in the event of a change in control followed by a termination of Mr. Jackman’s employment by the Company without cause or by Mr. Jackman for good reason, in each case within two years of the change in control, outstanding but unvested RSUs and PSUs shall automatically vest in full, and the shares subject to those vested RSUs and PSUs shall be issued. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Jackman does not currently hold any share options.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 51
MARY ANNE WHITNEY, EXECUTIVE VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
by Employee
|
|
|
in Connection
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Employee For
|
|
|
Without Good
|
|
|
with Change
|
|
|
|
|
for
Cause
|
|
|
Without
Cause
|
|
|
on
Disability
|
|
|
on
Death
|
|
|
Good
Reason
|
|
|
Reason
|
|
|
in
Control
|
|
|
Base Salary
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
Bonus
|
|
|
—
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
(2)
|
|
|
—
|
|
|
Severance Payment
|
|
|
—
|
|
|
|
869,937
|
(4)
|
|
|
854,937
|
(5)
|
|
|
850,000
|
(6)
|
|
|
869,937
|
(4)
|
|
|
—
|
|
|
|
869,937
|
(4)
|
|
Unvested Share Options, Restricted Share Units and Other Equity in Company
|
|
|
—
|
(3)
|
|
|
2,015,706
|
(6)
|
|
|
2,015,706
|
(6)
|
|
|
2,015,706
|
(6)
|
|
|
2,015,706
|
(6)
|
|
|
—
|
(3)
|
|
|
2,015,706
|
(8)
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
2,885,642
|
|
|
$
|
2,870,642
|
|
|
$
|
2,865,706
|
|
|
$
|
2,885,642
|
|
|
$
|
—
|
|
|
$
|
2,885,642
|
|
|
(1)
|
Reflects the employee’s base salary to the date of termination, paid in a lump sum, which is assumed to have been paid in full.
|
|
(2)
|
Employee will forfeit her bonus for the year in which such a termination occurs.
|
|
(3)
|
All of employee’s unvested share options, RSUs, PSUs and other equity awards will be forfeited upon such a termination.
|
|
(4)
|
Reflects an amount equal to the sum of (i) Ms. Whitney’s then-current base salary; (ii) Ms. Whitney’s target bonus for the year in which the termination occurs, which is 70% of her base salary at the time of termination; (iii) the NEO Health Insurance Benefit; and (iv) the Outplacement Benefit.
|
|
(5)
|
Reflects an amount equal to the sum of (i) Ms. Whitney’s then-current base salary; (ii) Ms. Whitney’s target bonus for the year in which the termination occurs, which is 70% of her base salary at the time of termination; and (iii) the NEO Health Insurance Benefit.
|
|
(6)
|
Reflects an amount equal to (i) Ms. Whitney’s then-current base salary; and (ii) Ms. Whitney’s target bonus for the year in which the termination occurs, which is 70% of her base salary at the time of termination.
|
|
(7)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Ms. Whitney does not currently hold any share options.
|
|
(8)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. Pursuant to the Separation Benefits Plan, in the event of a change in control followed by a termination of Ms. Whitney’s employment by the Company without cause or by Ms. Whitney for good reason, in each case within two years of the change in control, outstanding but unvested RSUs and PSUs shall automatically vest in full, and the shares subject to those vested RSUs and PSUs shall be issued. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Ms. Whitney does not currently hold any share options.
|
DARRELL W. CHAMBLISS, EXECUTIVE VICE PRESIDENT
AND CHIEF OPERATING OFFICER
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
by Employee
|
|
|
in Connection
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Employee For
|
|
|
Without Good
|
|
|
with Change
|
|
|
|
|
for Cause
|
|
|
Without Cause
|
|
|
on Disability
|
|
|
on Death
|
|
|
Good Reason
|
|
|
Reason
|
|
|
in Control
|
|
|
Base Salary
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
Bonus
|
|
|
—
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
(2)
|
|
|
—
|
|
|
Severance Payment
|
|
|
—
|
|
|
|
2,104,510
|
(4)
|
|
|
2,104,510
|
(4)
|
|
|
2,073,600
|
(5)
|
|
|
2,104,510
|
(4)
|
|
|
—
|
|
|
|
2,104,510
|
(4)
|
|
Unvested Share Options, Restricted Share Units and Other Equity in Company
|
|
|
—
|
(3)
|
|
|
3,218,723
|
(6)
|
|
|
3,218,723
|
(6)
|
|
|
3,218,723
|
(6)
|
|
|
3,218,723
|
(6)
|
|
|
—
|
(3)
|
|
|
3,218,723
|
(7)
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
5,323,233
|
|
|
$
|
5,323,233
|
|
|
$
|
5,292,323
|
|
|
$
|
5,323,233
|
|
|
$
|
—
|
|
|
$
|
5,323,233
|
|
|
(1)
|
Reflects the employee’s base salary to the date of termination, paid in a lump sum, which is assumed to have been paid in full.
|
|
(2)
|
Employee will forfeit his bonus for the year in which such a termination occurs.
|
|
(3)
|
All of employee’s unvested share options, RSUs, PSUs and other equity awards will be forfeited upon such a termination.
|
|
(4)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Chambliss’ then-current base salary; (ii) Mr. Chambliss’ target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination; and (iii) the NEO Health Insurance Benefit.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 52
|
(5)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Chambliss’ then-current base salary; and (ii) Mr. Chambliss’ target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination.
|
|
(6)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Chambliss does not currently hold any share options.
|
|
(7)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. Pursuant to the Separation Benefits Plan, in the event of a change in control followed by a termination of Mr. Chambliss’ employment by the Company without cause or by Mr. Chambliss for good reason, in each case within two years of the change in control, outstanding but unvested RSUs and PSUs shall automatically vest in full, and the shares subject to those vested RSUs and PSUs shall be issued. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Chambliss does not currently hold any share options.
|
PATRICK J. SHEA, EXECUTIVE VICE PRESIDENT, GENERAL
COUNSEL AND SECRETARY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
by Employee
|
|
|
in Connection
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Employee For
|
|
|
Without Good
|
|
|
with Change
|
|
|
|
|
for Cause
|
|
|
Without Cause
|
|
|
on Disability
|
|
|
on Death
|
|
|
Good Reason
|
|
|
Reason
|
|
|
in Control
|
|
|
Base Salary
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
Bonus
|
|
|
—
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
(2)
|
|
|
—
|
|
|
Severance Payment
|
|
|
—
|
|
|
|
1,734,433
|
(4)
|
|
|
1,734,433
|
(4)
|
|
|
1,697,280
|
(5)
|
|
|
1,734,433
|
(4)
|
|
|
—
|
|
|
|
1,734,433
|
(4)
|
Unvested Share Options, Restricted Share Units and Other Equity in Company
|
|
|
—
|
(3)
|
|
|
2,331,724
|
(6)
|
|
|
2,331,724
|
(6)
|
|
|
2,331,724
|
(6)
|
|
|
2,331,724
|
(6)
|
|
|
—
|
(3)
|
|
|
2,331,724
|
(7)
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
4,066,157
|
|
|
$
|
4,066,157
|
|
|
$
|
4,029,004
|
|
|
$
|
4,066,157
|
|
|
$
|
—
|
|
|
$
|
4,066,157
|
|
|
(1)
|
Reflects the employee’s base salary to the date of termination, paid in a lump sum, which is assumed to have been paid in full.
|
|
(2)
|
Employee will forfeit his bonus for the year in which such a termination occurs.
|
|
(3)
|
All of employee’s unvested share options, RSUs, PSUs and other equity awards will be forfeited upon such a termination.
|
|
(4)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Shea’s then-current base salary; (ii) Mr. Shea’s target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination; and (iii) the NEO Health Insurance Benefit.
|
|
(5)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Shea’s then-current base salary; and (ii) Mr. Shea’s target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination.
|
|
(6)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Shea does not currently hold any share options.
|
|
(7)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. Pursuant to the Separation Benefits Plan, in the event of a change in control followed by a termination of Mr. Shea’s employment by the Company without cause or by Mr. Shea for good reason, in each case within two years of the change in control, outstanding but unvested RSUs and PSUs shall automatically vest in full, and the shares subject to those vested RSUs and PSUs shall be issued. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Shea does not currently hold any share options.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 53
JAMES M. LITTLE, EXECUTIVE VICE PRESIDENT –
ENGINEERING AND DISPOSAL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination by
|
|
|
by Employee
|
|
|
in Connection
|
|
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Termination
|
|
|
Employee For
|
|
|
Without Good
|
|
|
with Change
|
|
|
|
|
for Cause
|
|
|
Without Cause
|
|
|
on Disability
|
|
|
on Death
|
|
|
Good Reason
|
|
|
Reason
|
|
|
in Control
|
|
|
Base Salary
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
(1)
|
|
$
|
—
|
|
|
Bonus
|
|
|
—
|
(2)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
(2)
|
|
|
—
|
|
|
Severance Payment
|
|
|
—
|
|
|
|
1,711,393
|
(4)
|
|
|
1,711,393
|
(4)
|
|
|
1,674,240
|
(5)
|
|
|
1,711,393
|
(4)
|
|
|
—
|
|
|
|
1,711,393
|
(4)
|
|
Unvested Share Options, Restricted Share Units and Other Equity in Company
|
|
|
—
|
(3)
|
|
|
2,300,543
|
(6)
|
|
|
2,300,543
|
(6)
|
|
|
2,300,543
|
(6)
|
|
|
2,300,543
|
(6)
|
|
|
—
|
(3)
|
|
|
2,300,543
|
(7)
|
|
TOTAL
|
|
$
|
—
|
|
|
$
|
4,011,935
|
|
|
$
|
4,011,935
|
|
|
$
|
3,974,783
|
|
|
$
|
4,011,935
|
|
|
$
|
—
|
|
|
$
|
4,011,935
|
|
|
(1)
|
Reflects the employee’s base salary to the date of termination, paid in a lump sum, which is assumed to have been paid in full.
|
|
(2)
|
Employee will forfeit his bonus for the year in which such a termination occurs.
|
|
(3)
|
All of employee’s unvested share options, RSUs, PSUs and other equity awards will be forfeited upon such a termination.
|
|
(4)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Little’s then-current base salary; (ii) Mr. Little’s target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination; and (iii) the NEO Health Insurance Benefit.
|
|
(5)
|
Reflects an amount equal to the sum of (i) 2.99x of Mr. Little’s then-current base salary; and (ii) Mr. Little’s target bonus for the year in which the termination occurs, which is 85% of his base salary at the time of termination.
|
|
(6)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Little does not currently hold any share options.
|
|
(7)
|
Reflects the immediate vesting of all of the employee’s outstanding but unvested share options, RSUs, PSUs and other equity awards as of the date of termination. Pursuant to the Separation Benefits Plan, in the event of a change in control followed by a termination of Mr. Little’s employment by the Company without cause or by Mr. Little for good reason, in each case within two years of the change in control, outstanding but unvested RSUs and PSUs shall automatically vest in full, and the shares subject to those vested RSUs and PSUs shall be issued. The exercisability of any such share options will be extended to the earlier of the expiration of the term of such share options or the third anniversary of the date of termination. No value for the extension was included since Mr. Little does not currently hold any share options.
|
WASTE
CONNECTIONS, INC. | 2021 PROXY STATEMENT 54
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
2020 Related Party Transactions
For 2020, there are no related party transactions
among our executive officers and directors, other than those disclosed below.
Since June 2016, Namen Chambliss has held
the position of Director of Network and Integrations for the Company. From January 2005 to that date, Mr. N. Chambliss held the
position of Network Manager for the Company. Mr. N. Chambliss is the brother of Darrell W. Chambliss, our Executive Vice President
and Chief Operating Officer. The total salary and incentive compensation we paid to Mr. N. Chambliss in 2020 was $165,894. As
of December 31, 2020, Mr. N. Chambliss’ annual salary was $136,600. In addition, Mr. N. Chambliss had $61,616 of RSUs vest
in 2020. In 2020, we granted Mr. N. Chambliss 440 RSUs on the same general terms and conditions as RSUs granted to other employees
at the same management level.
Since March 2021, Cooper Jackman has held
the position of Industrial Marketing Sales Representative for the Company. From June 2017 to that date, Mr. C. Jackman held the
position of Sales Representative for the Company’s subsidiary, Waste Connections of Colorado, Inc. Mr. C. Jackman is the
son of Worthing F. Jackman, our President and Chief Executive Officer. The total salary and sales commissions we paid to Mr. C.
Jackman in 2020 was $133,328. As of December 31, 2020, Mr. C. Jackman’s annual salary was $42,656. In addition, Mr. C. Jackman
had $3,114 of RSUs vest in 2020. In 2020, we granted Mr. C. Jackman 54 RSUs on the same general terms and conditions as RSUs granted
to other employees at the same level.
Since August 2019, Michelle Little has
held the position of Executive Director – Engagement Solutions/HRIS for the Company. From January 2018 to that date, Ms.
Little held the position of Vice President – Accounting for the Company. From December 2007 to January 2018, Ms. Little
held the position of Director of Accounting for the Company. Ms. Little is the spouse of James M. Little, our Executive Vice President
— Engineering and Disposal. The total salary and incentive compensation we paid to Ms. Little in 2020 was $342,815. As of
December 31, 2020, Ms. Little’s annual salary was $237,500. In addition, Ms. Little had $296,790 of RSUs and PSUs vest in
2020. In 2020, we granted Ms. Little 1,200 RSUs on the same general terms and conditions as RSUs granted to other employees at
the same management level. In 2020, Ms. Little also received $106,303 of previously deferred RSUs under our Nonqualified Deferred
Compensation Plan.
Indebtedness of Directors and Officers
As of the date of this Proxy Statement,
no current or proposed director, NEO or other corporate officer of the Company, or any former director, NEO or other corporate
officer of the Company, or any associate of any of the foregoing, is, or has been at any time during 2020, indebted to the Company
or its subsidiaries, either in connection with the purchase of securities of the Company or otherwise.
Interest of Informed Persons and Others in Material Transactions
The management of the Company is not aware
of any material interest, direct or indirect, of any informed person of the Company, any proposed director or any associate or
affiliate of any informed person or proposed director in any transaction since the commencement of the Company’s most recently
completed financial year, or in any proposed transaction, that has materially affected or would materially affect the Company
or any of its affiliates or subsidiaries.
Review, Approval or Ratification of Transactions with Related
Persons
The Nominating and Corporate Governance
Committee developed and the Board of Directors approved our Corporate Governance Guidelines and Board Charter and our Code of
Conduct and Ethics, including a Code of Ethics for Senior Financial Officers, as required by Section 406 of the United States
Sarbanes-Oxley Act of 2002 and the rules of the SEC and applicable Canadian securities laws. The Nominating and Corporate Governance
Committee reviews the Corporate Governance Guidelines and Board Charter and the Code of Conduct and Ethics on an annual basis,
or more frequently if appropriate, and recommends to the Board of Directors changes as necessary.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 55
In addressing conflicts of interest, the
Code of Conduct and Ethics provides that no officer, director or employee may be subject to influences, interests or relationships
that conflict with the best interests of the Company. It states that a conflict of interest exists when a person is in a position
to influence a decision that may personally benefit that person or a person he or she is related to, legally or by blood or marriage
as a result of the Company’s business dealings. The Code of Conduct and Ethics provides that each officer, director and
employee must avoid any investment, interest or association that interferes or might interfere with that person’s independent
exercise of judgment in the Company’s best interests, and that service to the Company should never be subordinated to personal
gain or advantage.
In an effort to help avoid these and other
conflicts of interest, the Code of Conduct and Ethics sets forth certain rules the Company has adopted, including rules that prohibit:
(a) officers, directors, and any employees who buy or sell goods or services or have responsibility connected to buying and selling
for or on behalf of the Company, as well as the members of their respective families, from having certain economic interests in
business concerns that transact business with the Company or are in competition with it; (b) officers, directors or employees
from (directly or indirectly) giving or accepting certain gifts to or from any person soliciting or doing business with the Company;
(c) officers of the Company from serving as a director of any other company that is organized for profit without the written approval
of the Nominating and Corporate Governance Committee; and (d) officers, directors or employees from having any material interest
in a business that deprives the Company of any business opportunity or is in any way detrimental to the Company.
Each officer and director must report all
actual or potential conflicts of interest to the Nominating and Corporate Governance Committee. Directors must also comply with
the conflict provisions relating to directors set forth in our Corporate Governance Guidelines and Board Charter and prescribed
by the Business Corporations Act (Ontario) (the “OBCA”). The Nominating and Corporate Governance Committee will resolve
all conflicts of interest involving officers or directors. If a conflict involves a member of the Nominating and Corporate Governance
Committee, that committee will resolve the conflict only if there are two disinterested directors remaining on that committee.
Otherwise, the matter will be resolved by the entire Board of Directors. If a significant conflict exists involving a director
that cannot be resolved and cannot be waived, the director must resign.
The Nominating and Corporate Governance
Committee has the sole authority to waive provisions of our Code of Conduct and Ethics with respect to executive officers and
directors in specific circumstances where it determines that such waiver is appropriate, subject to compliance with applicable
laws and regulations. Any such waivers will be promptly disclosed to our shareholders to the extent required by applicable laws
and regulations.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 56
PROPOSAL 2 ADVISORY
VOTE ON NAMED EXECUTIVE OFFICER COMPENSATION (“SAY ON PAY PROPOSAL”)
|
What am I voting on?
As required by Section 14A of the
Exchange Act, we are requesting our shareholders to approve, on a non-binding, advisory basis, the compensation of our
NEOs, as disclosed in the Compensation Discussion and Analysis, the compensation tables, and the narrative discussion
set forth on pages 25 to 54 of this Proxy Statement. This non-binding advisory vote, commonly referred to as a “say-on-pay”
vote, is not intended to address any specific item of compensation, but rather to address our overall approach to the
compensation of our NEOs described in this Proxy Statement.
|
Our Compensation Committee, which is responsible
for designing and administering our executive compensation program, has designed our executive compensation program to provide
a competitive and internally equitable compensation and benefits package that, among other objectives, reflects Company performance,
job complexity and value of the position, while ensuring long-term retention, motivation and alignment with the long-term interests
of our shareholders.
We believe the compensation program for
our NEOs has been instrumental in helping Waste Connections achieve strong financial performance and total shareholder returns.
As illustrated below, our TSR over a longer term, five-year period ending December 31, 2020, has outperformed the S&P 500,
the TSX 60 and the DJ Waste Index. In addition, 2020 was our 17th consecutive year of positive TSR.
As described in the section “Compensation
Discussion and Analysis — Role of Independent Compensation Consultant; Comparator Group Compensation Data”, a review
by the Compensation Committee’s independent compensation consultant in February 2020 concluded that, in aggregate, the Company’s
2019 targeted TDC for the NEOs was aligned with the 25th percentiles of the Comparator group. It was also noted that
the Company’s annualized TSR was above the 75th percentile for all measurement periods between three and ten
years ending December 31, 2019, when compared to the Comparator group.
The following is a summary of some of the
key points of our executive compensation program. We encourage you to carefully review the “Compensation Discussion and
Analysis” beginning on page 25 of this Proxy Statement for additional details on our executive compensation, including the
Company’s compensation philosophy and objectives, as well as the processes our Compensation Committee used to determine
the structure and amounts of the compensation of our NEOs in fiscal 2020.
|
■
|
We emphasize pay-for-performance. We believe a significant
portion of our executive officers’ compensation should be variable and at risk and tied to our measurable performance. The
Compensation Committee has designed our executive compensation program so that total compensation is earned largely based on attaining
multiple, pre-established financial performance measures.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 57
|
■
|
We believe that our compensation program
is strongly aligned with the long-term interests of our shareholders. We believe that equity awards comprised of RSUs
and PSUs serve to align the interests of our executive officers with those of our shareholders by encouraging long-term performance.
As such, equity awards are a key component of our executive compensation program.
|
|
■
|
We believe that we provide competitive pay opportunities
that are intended to reflect best practices. The Compensation Committee periodically reviews our executive compensation
program with the intent to provide competitive pay opportunities, reflect best practices and further align pay with performance.
|
|
■
|
We updated the performance-based metrics for our
PSUs to include ESG targets. Incentive compensation under our PSUs is based on the Company’s achievement of established
financial objectives over the three-year performance period and, beginning in 2021, continuous improvement towards the Company’s
ESG/sustainability targets, as well as a relative TSR modifier component, for vesting hurdles to further enhance the existing
link between executive compensation and Company performance. PSUs constitute 50% of total equity compensation.
|
|
■
|
We maintain share ownership guidelines. Our
executive officers are expected to hold Common Shares with a value equal to a multiple of their base salaries, including five
times base salary for our CEO.
|
|
■
|
We are committed to having strong governance standards
with respect to our compensation program, procedures and practices. The Compensation Committee periodically retains an
independent compensation consultant to provide it with advice and guidance on the Company’s executive compensation program
design and to evaluate our executive compensation. The Compensation Committee oversees and periodically assesses the risks
associated with our Company-wide compensation structure, policies and programs to determine whether such programs encourage
excessive risk taking. We also have adopted share ownership guidelines for the members of the Board of Directors and executive
officers and anti-hedging/pledging policies.
|
We are asking you to indicate your support
for the compensation of our NEOs as described in this Proxy Statement. This vote is not intended to address any specific item
of compensation, but rather the overall compensation of our NEOs and the philosophy, policies and practices described in this
Proxy Statement. Accordingly, we are asking you to vote, on a non-binding, advisory basis, “FOR” the following resolution
at the Meeting:
“RESOLVED, that the compensation
paid to the NEOs of Waste Connections, Inc. (the “Company”), as disclosed pursuant to the SEC’s compensation
disclosure rules, including the Compensation Discussion and Analysis, compensation tables and narrative discussion set forth on
pages 25-54 of the Company’s Management Information Circular and Proxy Statement dated April 1, 2021, is hereby approved.”
While the results of this advisory vote
are not binding, the Compensation Committee will consider the outcome of the vote in deciding whether to take any action as a
result of the vote and when making future compensation decisions for NEOs.
The Say on Pay Proposal may be approved
by the affirmative vote of a simple majority (50 percent plus one) of the Common Shares present, either in person or by proxy,
and entitled to vote (meaning that at least a simple majority of the votes cast must be “FOR” the Say on Pay Proposal
in order for it to be approved). You may either vote “FOR” or “AGAINST,” or you may “WITHHOLD”
from voting on, the Say on Pay Proposal. If you “WITHHOLD” from voting on the Say on Pay Proposal, that will have
the same effect as a vote “AGAINST” the Say on Pay Proposal because those shares are considered to be present and
entitled to vote, but are not voted.
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE “FOR” THE SAY ON PAY PROPOSAL.
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 58
AUDIT MATTERS
Audit Committee Report
The Audit Committee has prepared the following
report for the Company’s shareholders.
The Audit Committee of the Company, whose
chairman is Mr. Harlan and whose other members are Ms. Jordan and Messrs. Hughes and Razzouk, met four times during 2020. The
Audit Committee of the Company is composed of independent, non-employee directors and operates under a written charter adopted
by the Board of Directors.
The Audit Committee is directly responsible
for the appointment, oversight, qualification, independence, performance, compensation and retention of the Company’s independent
registered public accounting firm, including audit fee negotiations and approval. The Audit Committee also is responsible for
the selection of the lead engagement partner, and as required by law, assures rotation of the lead partner every five years.
Management is responsible for the Company’s
internal controls and the financial reporting process. The Company’s independent registered public accounting firm is responsible
for: (i) auditing the effectiveness of the Company’s internal control over financial reporting based on its audit; and (ii)
performing an independent audit of the Company’s consolidated financial statements in accordance with generally accepted
auditing standards in the U.S. and issuing a report thereon. The Audit Committee’s responsibilities are to review the Company’s
internal controls and the objectivity of its financial reporting, and to meet with appropriate financial personnel and the Company’s
independent registered public accounting firm in connection with these reviews. The Audit Committee also reviews the professional
services provided by the Company’s independent registered public accounting firm and reviews such other matters concerning
the Company’s accounting principles and financial and operating policies, controls and practices, its public financial reporting
policies and practices, and the results of its annual audit as the Audit Committee may find appropriate or as may be brought to
the Audit Committee’s attention.
In this context, the Audit Committee has
met and held discussions with the Company’s management and its independent registered public accounting firm, and meets
periodically with both the Company’s internal auditors and its independent registered public accounting firm without management
present. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared
in accordance with generally accepted accounting principles in the U.S., and the Audit Committee has reviewed and discussed the
audited consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee
discussed with the independent registered public accounting firm the matters required to be discussed by Public Company Accounting
Oversight Board, or PCAOB, Auditing Standard No. 1301 (Communications with Audit Committees).The Audit Committee has received
the written disclosures and the letter from the independent registered public accounting firm required by applicable requirements
of the PCAOB regarding the independent registered public accounting firm’s communication with the Audit Committee concerning
independence. The Audit Committee discussed with the independent registered public accounting firm that firm’s independence
and considered the compatibility of non-audit services with the auditor’s independence.
Based on the Audit Committee’s review
and discussions referred to above, the Audit Committee recommended that the Board of Directors include the audited consolidated
financial statements in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with
the SEC and the securities commissions or similar regulatory authorities in Canada on February 18, 2021.
This report is submitted on behalf of the
Audit Committee.
Michael W. Harlan, Chairman
Larry S. Hughes
Elise L. Jordan
William J. Razzouk
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 59
PROPOSAL 3 APPOINTMENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND AUTHORIZATION OF THE BOARD OF DIRECTORS TO FIX THE REMUNERATION OF THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors requests that shareholders
approve the appointment of Grant Thornton LLP to serve as the Company’s independent registered public accounting firm until
the close of the 2022 Annual Meeting of Shareholders of the Company. Grant Thornton LLP was appointed as the Company’s independent
registered public accounting firm on March 24, 2017. We expect representatives of Grant Thornton LLP will be present at the Meeting,
will be available to respond to appropriate questions at the Meeting and will have an opportunity to make a statement if they
desire to do so.
The appointment of Grant Thornton LLP as
the Company’s independent registered public accounting firm may be approved by any one or more shareholders voting “FOR”
the proposal (i.e., a plurality vote). For purposes of this proposal, votes cast at the Meeting include only those votes cast
“FOR” the appointment of Grant Thornton LLP. You may either vote “FOR” or “WITHHOLD” your
vote with respect to the appointment of Grant Thornton LLP as the Company’s independent registered public accounting firm.
If you vote “FOR” the appointment
of Grant Thornton LLP as the Company’s independent registered public accounting firm, your vote will be cast accordingly.
If you select “WITHHOLD,” your vote will not be counted as a vote cast for purposes of appointing Grant Thornton LLP
as the Company’s independent registered public accounting firm.
|
|
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS
VOTE “FOR” THE APPROVAL OF THE APPOINTMENT OF GRANT THORNTON LLP AS THE COMPANY’S INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM UNTIL THE CLOSE OF THE 2022 ANNUAL MEETING OF SHAREHOLDERS OF THE COMPANY AND THE AUTHORIZATION OF
THE BOARD OF DIRECTORS TO FIX THE REMUNERATION OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.
|
The following table sets forth the fees
billed for professional services rendered in 2020 and 2019 by Grant Thornton LLP.
|
|
|
2020
|
|
|
2019
|
|
Audit Fees
|
|
$
|
2,027,000
|
|
|
$
|
2,244,027
|
|
Audit-Related Fees
|
|
|
22,300
|
|
|
|
8,800
|
|
Tax Fees
|
|
|
—
|
|
|
|
—
|
|
All Other Fees
|
|
|
—
|
|
|
|
—
|
|
TOTAL
|
|
$
|
2,049,300
|
|
|
$
|
2,252,827
|
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 60
Audit Fees consist of fees associated
with both the audit of our consolidated financial statements and the audit of our internal control over financial reporting for
fiscal years 2020 and 2019, including review of the consolidated financial statements included in documents filed with, or furnished
to, the SEC and securities commissions or similar regulatory authorities in Canada, as applicable, consents, assistance with review
of documents filed with, or furnished to, the SEC and securities commissions or similar regulatory authorities in Canada, as applicable,
and accounting consultations, as well as out-of-pocket expenses incurred in the performance of audit services. Audit Fees also
include fees associated with audit related tax compliance, advice and planning, which principally related to completed and proposed
acquisitions.
Audit-Related Fees consist of fees
associated with verifying the Company’s organizational composition, as well as for other audit and assurance services provided
in Canada.
Audit Committee Pre-Approval Policies and Procedures
The Audit Committee has adopted a policy
that requires advance approval of all audit, audit-related, tax and other services performed by the independent registered public
accounting firm. The policy provides for pre-approval by the Audit Committee of specifically defined audit and non-audit services.
Unless the specific service has been previously pre-approved with respect to that year, the Audit Committee must approve the permitted
service before the independent registered public accounting firm is engaged to perform it. The Audit Committee has delegated to
the chairman of the Audit Committee authority to approve permitted services, provided that the chairman reports all approvals
to the Audit Committee at its next meeting. All of the fees described above under “Audit Fees”, “Audit-Related
Fees”, “Tax Fees” and “All Other Fees” in each of the above tables were approved by the Audit Committee.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 61
OTHER INFORMATION
Directors’ and Officers’ Indemnity Insurance
For the period from January 1, 2020 to
December 31, 2020, the Company had insurance policies for its directors and officers and the directors and officers of the Company’s
subsidiaries. The aggregate limit of liability applicable to those insured directors and officers under the policies is $110 million,
inclusive of costs to defend claims. Under the policies, the Company will have an $80 million limit of liability in reimbursement
coverage to the extent that it has indemnified the directors and officers in excess of the retention of $2 million for each loss.
The insured directors and officers also have a $30 million limit of liability designated to claims in which no indemnification
is provided by the Company. The policies include coverage for claims under securities laws and insurance against any legal obligations
to pay on account of any such claims.
For the period from January 1, 2020 to
December 31, 2020, the total premiums paid on all of the policies described in the foregoing paragraph totaled $927,270. Because
the policies are subject to aggregate limits of liability, the amount of coverage may be diminished or exhausted by any claims
made thereon. Also, continuity of coverage is contingent upon the availability of renewal insurance, or of replacement insurance
without a retroactive date so as not to limit coverage for prior wrongful acts.
There were no claims made under the foregoing
policies during 2020. Furthermore, in fiscal 2020, no indemnity payments were paid or payable under the foregoing policies to
directors or officers of the Company.
Shareholder Proposals for 2022 Annual Meeting of Shareholders
of the Company
The Company is subject to both the rules
of the SEC under the Exchange Act and the provisions of the OBCA with respect to shareholder proposals. As indicated in the rules
of the SEC under the Exchange Act and under the OBCA, simply submitting a shareholder proposal does not guarantee its inclusion
in the Management Information Circular and Proxy Statement as compliance with applicable law is a prerequisite for inclusion.
A shareholder proposal submitted pursuant
to the rules of the SEC under the Exchange Act for inclusion in the Company’s proxy materials distributed to shareholders
prior to the 2022 Annual Meeting of Shareholders of the Company (other than in respect of the nomination of directors) must be
received by the Company no later than December 2, 2021, and must comply with the requirements of Rule 14a-8 of the Exchange Act.
The OBCA permits certain eligible shareholders
and beneficial owners of shares to submit shareholder proposals (including proposals in respect of director nominations) to the
Company, which proposals may be included in the Company’s proxy materials. To be considered for inclusion in the proxy materials
for the 2022 Annual Meeting of Shareholders of the Company, any such shareholder proposal under the OBCA must be received by the
Company by March 15, 2022, being at least 60 days before the anniversary date of the Meeting.
Written requests for inclusion of a shareholder
proposal pursuant to the rules of the SEC under the Exchange Act or pursuant to the OBCA should be addressed to the address set
forth on the first page of this Proxy Statement. The proposal should be sent to the attention of our Executive Vice President,
General Counsel and Secretary.
Shareholder proposals regarding the nomination
of candidates for election as directors must also comply with the advance notice provisions of the Company’s By-law No.
1. See “Our Director Nomination Process” above for a discussion of the procedure regarding shareholder nominations
of persons for election to the Board of Directors.
Shareholders wishing to put forward a proposal
or to nominate a director for election should carefully review the relevant provisions of the Exchange Act, the OBCA and the Company’s
By-law No. 1. The chairman of the meeting may refuse to allow the transaction of any business, or to acknowledge the nomination
of any person, not made in compliance with the foregoing procedures.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 62
Availability of Documents; Annual Report to Shareholders on
Form 10-K
Our Annual Report on Form 10-K for the
fiscal year ended December 31, 2020, filed with the SEC and the securities commissions or similar regulatory authorities in Canada,
and the exhibits filed with it, are available on the Company’s website at www.wasteconnections. investorroom.com, on SEDAR
at www.sedar.com, on EDGAR at www.sec.gov, and in print, free of charge, to any shareholder who requests in writing a copy by
contacting our Secretary or Investor Relations at our principal administrative offices located at Waste Connections, Inc., 3 Waterway
Square Place, Suite 110, The Woodlands, Texas 77380. Financial information relating to the Company is included in the Company’s
Audited Consolidated Financial Statements for the fiscal year ended December 31, 2020, and the Management’s Discussion and
Analysis related thereto and contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31,
2020. Upon written request by any shareholder to the Company’s Secretary at the Company’s address listed on the first
page of this Proxy Statement, a copy of our 2020 Form 10-K, without exhibits, will be furnished without charge, and a copy of
any or all exhibits to our 2020 Form 10-K will be furnished for a fee which will not exceed our reasonable expenses in furnishing
the exhibits. Additional information relating to the Company may be found on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
Other Business
The Board of Directors does not presently
have knowledge of any other matters that will be presented for consideration at the Meeting. It is important that the proxies
are submitted promptly and that your Common Shares are represented. You are urged to mark, date, execute and promptly return the
accompanying proxy card in the enclosed envelope or submit your proxy pursuant to instructions you receive from your bank or broker,
by using the Internet or your telephone.
Approval
The Board of Directors of the Company has
approved the contents of this Proxy Statement and its distribution to the shareholders.
By Order of the Board of Directors,
Patrick J. Shea
Executive Vice President, General Counsel
and Secretary
April 1, 2021
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT 63
APPENDIX A CORPORATE
GOVERNANCE GUIDELINES AND BOARD CHARTER
July 23, 2020
The Board of Directors (the “Board”)
of Waste Connections, Inc., an Ontario corporation (the “Company”), acting on the recommendation of the Nominating
and Corporate Governance Committee, has adopted these Corporate Governance Guidelines and Board Charter to promote the effective
functioning of the Board and its committees (the “Committees”), to promote the interests of the Company as
a whole and to ensure a common set of expectations concerning how the Board, its Committees and management should perform their
respective functions.
In this Corporate Governance Guidelines
and Board Charter, “applicable securities laws” refer to: (a) the United States Securities Act of 1933, as
amended, the United States Securities Exchange Act of 1934, as amended, and any rules or regulations thereunder; (b) any
applicable state securities laws; (c) the Securities Act (Ontario) and the equivalent thereof in each province and territory of
Canada in which the Company is a “reporting issuer” or the equivalent thereof, together with the regulations, rules
and blanket orders of the securities commission or similar regulatory authority in each of such jurisdictions; and (d) the rules
of the New York Stock Exchange and the Toronto Stock Exchange, to the extent that any securities of the Company are listed on
such exchange.
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1.
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Role of the Board and Management.
The Company’s business is conducted by its employees, managers and officers, under the direction of the Chief Executive
Officer and the oversight of the Board, to enhance the long-term value of the Company for its shareholders. The Board is elected
by the shareholders to oversee management and to act in the best interests of the Company as a whole. Both the Board and management
recognize that the long-term interests of the Company and shareholders are advanced by responsibly addressing the concerns
of other stakeholders and interested parties, including employees, recruits, customers, suppliers, communities in which the
Company operates, government officials and the public at large.
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2.
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Functions of the Board. The Board has four
regularly scheduled meetings each year, at which it reviews and discusses reports by management on the Company’s performance,
business and prospects, as well as immediate issues facing the Company, and reviews and approves, as applicable, the annual
and interim financial statements of the Company.
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3.
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Selection of Chairman of the Board and Chief Executive
Officer. The Board shall select its Chairman and the Company’s Chief Executive Officer in any way it considers to
be in the best interests of the Company.
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When the Chairman is an affiliated director
or otherwise not independent under applicable securities laws, a member of the Company’s management, or when the independent
directors determine that it is in the best interests of the Company, the independent directors will appoint from among themselves
a Lead Independent Director. The Lead Independent Director will: (a) preside at all meetings of the Board at which the Chairman
is not present; (b) preside over each meeting of non-employee Directors; (c) have the authority to call meetings of non-employee
Directors; (d) help facilitate communication between the Chairman, the Chief Executive Officer and the non-employee Directors;
(e) advise with respect to the Board’s agenda; (f) ensure that the Board is able to function independently of management;
(g) serve as the leader of the Board on matters of corporate governance; (h) if requested by major shareholders, ensure his
or her availability for direct communication; (i) ensure that all Directors have an independent contact on matters of concern
to them and ensure that the Board successfully discharges its fiduciary duties; (j) provide guidance on, and monitor, the independence
of each Director to ensure the independence of the Board; (k) provide leadership to the Board if circumstances arise in which
the Chairman has, or may be perceived to have, a conflict; (l) ensure that functions delegated to Board committees are carried
out as represented and results are reported to the Board; (m) work with the Chairman and Chief Executive Officer, including helping
to review strategies, define issues, maintain accountability and build relationships; (n) in conjunction with the Nominating and
Corporate Governance Committee, facilitate the review and assessment of individual Director attendance and performance and the
size, composition and overall performance of the Board and its committees; (o) in collaboration with the Chairman and the
Secretary, ensure that information requested by Directors or Board committees is provided and meets their needs; and (p) together
with the Chairman, ensure the Directors are alert to their obligations to the Company, securityholders, management, other stakeholders
and pursuant to applicable law. If the Chairman is an independent director, then the duties for the Lead Independent Director
described above shall be part of the duties of the Chairman.
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4.
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Board Committees. The Board has
established the following standing Committees to assist it in discharging its responsibilities: (a) Audit; (b) Compensation;
(c) Nominating and Corporate Governance; and (d) Executive. The current charters of the Audit, Compensation and Nominating
and Corporate Governance Committees are published on the Company’s website and will be provided to shareholders on written
request. Members of each of these Committees (including the Committee Chairs) are appointed by the Board and may be removed
by the Board in its discretion. The Committee Chairs report the highlights of their meetings to the Board following each meeting
of their respective Committees. The Committees may hold meetings in conjunction with the Board.
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WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT A-1
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Each of the members of the Audit Committee,
the Compensation Committee and the Nominating and Corporate Governance Committee will be independent under applicable securities
laws and the standards specified in Section 8 below. The Company will afford access to the Company’s employees,
professional advisers and other resources, if needed, to enable Committee members to carry out their responsibilities.
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The Board may, from time to time, establish additional
committees.
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5.
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Selection of Directors. The Board’s
Nominating and Corporate Governance Committee shall be responsible for identifying qualified individuals to become Board members
and selecting or recommending to the Board director nominees for each meeting of the shareholders at which one or more directors
will be elected and for vacancies the Board chooses to fill.
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6.
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Qualifications of Directors. Directors must
have the highest personal and professional ethics, integrity and values. They must be committed to representing the best interests
of the Company. They must have an objective perspective, practical wisdom, mature judgment and expertise, skills and knowledge
useful to the oversight of the Company’s business. The Company’s goal is a Board that represents diverse experiences
at policy-making levels in business and other areas relevant to the Company’s activities, while encouraging a diversity
of backgrounds, including with respect to gender, consistent with the Company’s diversity policy.
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Directors should be committed to serving on the Board
for an extended period. Directors should offer their resignation if there is any significant, detrimental change in their
personal or professional circumstances, including a change in their principal job responsibilities.
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Each director should be sufficiently familiar with
the business of the Company to ensure active participation in the deliberations of the Board and each Committee on which the
director serves. On request, management will make appropriate personnel available to answer any questions a director may have
about any aspect of the Company’s business. All directors shall be free to contact the Chief Executive Officer at any
time to discuss any aspect of the Company’s business, and shall have complete access to other employees of the Company.
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The Company values the experience directors bring
from other boards on which they serve and other activities in which they participate, but recognizes that these boards and
activities may present demands on a director’s time and availability. Therefore, directors who also serve as chief executive
officers or in equivalent positions at any company should not serve on more than two Boards of public companies in addition
to the Company’s Board, and other directors should not serve on more than four other Boards of public companies in addition
to the Company’s Board.
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The Company does not believe that arbitrary term
limits on director’s service are appropriate, nor does it believe that directors should expect to be re-nominated at
the end of each term until they retire. The Board’s self-evaluation process described below is an important factor in
determining a Board member’s tenure.
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No director who is over the age of 75 at the expiration
of his or her current term may be nominated to a new term. Notwithstanding the foregoing, as part of the Nominating and Corporate
Governance Committee’s regular evaluation of the Company’s directors and the overall needs of the Board, the Nominating
and Corporate Governance Committee may determine that it would be in the best interests of the Company to ask a director to
remain on the Board for an additional period of time beyond age 75, or to stand for re-election even if such director is over
the age of 75. Such determination must be renewed annually.
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7.
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Independence Standards. A majority of the
Board must be independent, within the meaning of: (a) Section 1.4 of National Instrument 52-110 of the Canadian Securities
Administrators; and (b) Section 303A.02 of the Listed Company Manual of the New York Stock Exchange, in each case as such
rules may be amended or replaced. For a director to be considered independent, the Board must determine that the director
has no material relationship with the Company, provided that the direct or indirect ownership of any amount of the Company’s
shares will not be deemed to constitute a material relationship.
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The Board will review all relationships to assess
whether any of them is a material relationship so as to impair that director’s independence. The Board will review annually
whether its members satisfy applicable independence tests before any member stands for re-election to the Board.
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The Company will not make any personal loans or extend
credit to any director or officer, other than those expressly permitted under applicable laws. All such arrangements must
be approved in advance and administered by the Compensation Committee. No independent director or his or her immediate family
member may provide personal services to the Company for compensation, other than as permitted under applicable securities
laws.
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8.
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Independence of Committee Members. In addition
to the general requirements for independent Board members described above, members of the Audit Committee must also satisfy
the additional independence requirements of: (a) National Instrument 52-110 of the Canadian Securities Administrators; (b)
the rules of the New York Stock Exchange; and (c) Rule 10A-3 of the Securities Exchange Act of 1934, as amended, which, among
other things, prohibit a member of the Audit Committee (other than in his capacity as a member of the Audit Committee, the
Board or any other committee of the Board) from receiving any compensatory fees from or being an affiliated person of the
Company or any of its subsidiaries. The Board will also apply this additional requirement, as well as any additional requirements
mandated by applicable securities laws, to members of the Compensation and Nominating and Corporate Governance Committees.
Additionally, members of the Compensation Committee must qualify as “outside directors” under Section 162(m) of
the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.
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WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT A-2
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9.
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Competitive Interlocks. In accordance
with United States federal antitrust laws, no director may serve on the Board of any company that competes with the Company,
if either company derives a statutorily specified amount of revenues from providing services that both companies offer in
markets in which both companies are active. To facilitate compliance with these laws, all directors must (a) inform the Company
of all companies that they serve as directors, (b) inform the Company before joining any other board and obtain the approval
of the Nominating and Corporate Governance Committee before joining any other for-profit board and (c) carefully monitor the
activities of companies in which they participate to anticipate interlocks.
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10.
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Size of the Board. Subject to the articles
of the Company, the Board determines the number of directors. The Board believes that, given the size of the Company, eight
is an appropriate number of directors.
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11.
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Director Responsibilities. Directors must
perform the roles and functions described in these guidelines and the charters of all Committees on which they serve. They
must devote sufficient time and resources to carry out their duties and responsibilities effectively. They must make every
effort to attend each meeting of the Board and all Committees on which they serve, and they must review all materials distributed
to them in advance of each such meeting. In discharging responsibilities as a director, a director is entitled to rely in
good faith on reports or other information provided by the Company’s management, independent auditors, and other persons
as to matters the director reasonably believes to be within such other person’s professional or expert competence and
who has been selected with reasonable care by or on behalf of the Company. Attendance by telephone, electronic or other communication
facilities as permit all persons participating in the meeting to communicate with each other simultaneously and instantaneously
may be used to facilitate a director’s attendance. Directors must comply with all applicable laws, including the applicable
securities laws and, with respect to their activities relating to the Company, the Business Corporations Act (Ontario) (the
“OBCA”).
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12.
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Meetings of Non-Employee Directors; Presiding
Director. At each regularly scheduled meeting of the Board, the non-employee directors shall also meet separately, without
employees present. The Lead Independent Director will preside at such meetings. The non-employee directors may also meet without
employees present at other times as determined by the Lead Independent Director. The non-employee directors include all directors
who are not employees of the Company or any of its subsidiaries, whether or not they are “independent,” as defined
in these Guidelines. If the Chairman is an independent director, then the duties for the Lead Independent Director described
above shall be part of the duties of the Chairman.
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13.
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Agendas. The agenda for each Board meeting
shall be established by the Chairman in collaboration with the Chief Executive Officer, taking into account input and suggestions
from other members of the Board and senior management. The agenda for each Committee shall be established by the Chair of
each Committee, in consultation with appropriate members of the Committee, advisors and senior management. Unless a Committee
expressly determines otherwise, the agenda, materials and minutes for each Committee meeting shall be available to all directors,
and all directors shall be free to attend any Committee meeting. All directors, whether or not members of the Committee, shall
be free to make suggestions to a Committee Chair for additions to the agenda of the Chair’s Committee or to request
that an item from a Committee agenda be considered by the Board.
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14.
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Ethics and Conflicts of Interest. The Board
expects the Company’s directors, officers and employees to act ethically at all times and to adhere to the Company’s
Code of Conduct and Ethics. The Nominating and Corporate Governance Committee will resolve all conflicts of interest involving
any officer or director; however, if a conflict involves a member of the Nominating and Corporate Governance Committee, and
there are not at least two other members of that Committee who are not involved in the conflict, then the Board will resolve
that conflict. Directors must promptly disclose actual or potential conflicts of interest to the Nominating and Corporate
Governance Committee and to the Board as required by the OBCA. Such disclosure must be made prior to any Board meeting at
which transactions or issues relating to the actual or potential conflict will be addressed. If a significant conflict exists
that cannot be resolved, the director must resign. All directors must recuse themselves from any discussion or decision affecting
their personal, business or professional interests, to the extent required by the OBCA.
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15.
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Compensation of Board. The Compensation Committee
is responsible for recommending to the Board the compensation and benefits for non-employee directors. The Committee will
be guided by three principles: (a) the compensation should fairly pay non-employee directors for the work required in light
of the Company’s size and scope; (b) compensation should align the directors’ interests with the long-term best
interests of the Company; and (c) the structure of the compensation should be simple, transparent and easy for shareholders
to understand. At the end of each year, the Compensation Committee will review non-employee director compensation and benefits.
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16.
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Share Ownership Guidelines. The Compensation
Committee is responsible for recommending to the Board share ownership guidelines for non-employee directors, named executive
officers and other corporate officers of the Company to further align management and shareholder interests and discourage
inappropriate or excessive risk-taking.
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17.
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Clawback Policy. The Compensation Committee
is responsible for the adoption and oversight of the Company’s Compensation Recoupment Policy relating to the forfeiture
or repayment of incentive compensation paid to a named executive officer or other corporate officer in the event of an accounting
restatement. The Compensation Committee will continue to monitor the appropriateness of this policy in light of changes in
applicable securities laws.
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18.
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Diversity Policy. The Nominating and Corporate
Governance Committee is responsible for (a) monitoring the implementation of the Company’s diversity policy on a periodic
basis, and at least annually, to assess its effectiveness, (b) monitoring and reviewing the Company’s progress in achieving
its aspirational targets and reporting the results to the Board and (c) making recommendations to the Board regarding any
revisions to this policy that may be necessary or appropriate.
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WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT A-3
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19.
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ESG Matters. The Board is responsible
for reviewing strategy, policies and performance related to the Company’s management of environmental, social and governance
(“ESG”) issues, including reviewing any reports on the Company’s performance against ESG targets,
any ESG programs, products and disclosures, and any corporate responsibility policies and programs, in coordination with other
committees of the Board, as appropriate.
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20.
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Anti-Hedging/Pledging Policy. The Board is
responsible for oversight of the Company’s policy prohibiting executive officers and directors from engaging in transactions
designed to hedge against the economic risks associated with an investment in common shares or pledging common shares as collateral.
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Self-Evaluation. The Board and each Committee
will perform an annual self-evaluation. Annually, the directors will be asked to provide their assessments of the effectiveness
of the Board and the Committees on which they serve. Such assessments will address, at a minimum, the effectiveness and adequacy
of meetings of the Board and its Committees, the adequacy and timeliness of information provided to the Board by the Company’s
management, the diversity of experience of individual directors and the contributions of each director.
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Succession Plan. The Board will approve and
maintain a succession plan for the Chief Executive Officer and other senior management, based on recommendations from the
Compensation Committee. Such plan will include policies and principles for selecting and evaluating a new Chief Executive
Officer in the event of an emergency or retirement of the Chief Executive Officer.
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23.
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Access to Independent Advisors. The Board
and its Committees have the authority at any time to retain independent outside financial, legal or other advisors.
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24.
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Director Orientation and Education. The General
Counsel and the Chief Financial Officer will provide an orientation for new directors, and periodically provide materials
or briefing sessions for all directors on subjects relevant to their discharge of their duties. Each new director, within
six months of election to the Board, will spend a day at the Company’s corporate headquarters (which may be done remotely)
for a personal briefing by senior management about the director’s legal and ethical responsibilities; the Company’s
strategic plans, principal operating risks and financial statements; the material factors that affect the Company’s
performance; the operation, significance and effects of incentive compensation programs and related party transactions; and
other key policies and practices.
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25.
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Majority Voting Policy. Each director of the
Company must be elected by a majority of the votes cast with respect to his or her election, other than at a meeting of shareholders
at which the number of directors nominated for election is greater than the number of seats available on the Board (a “Contested
Election”).
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The forms of proxy circulated in connection with
a meeting of the Company’s shareholders that is not a Contested Election shall provide the Company’s shareholders
with the ability to vote in favor of, or to withhold from voting for, each director nominee. In the event one or more incumbent
directors fails to receive the affirmative vote of a majority of the votes cast with respect to his or her election at a meeting
of shareholders that is not a Contested Election (each, a “Subject Director”), the Subject Director must
immediately tender his or her resignation to the Board. A “majority of the votes cast” means that the number of
shares voted “for” a director’s election exceeds 50% of the number of votes cast with respect to that director’s
election. Votes cast with respect to that director’s election shall include votes to withhold authority, but shall exclude
abstentions, broker non-votes, and failures to vote with respect to that director’s election. In a Contested Election,
a plurality vote standard will apply.
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Following the receipt of a resignation from a Subject
Director, either (i) the Nominating and Corporate Governance Committee of the Board or (ii) if one or more of the members
of the Nominating and Corporate Governance Committee is a Subject Director or the Board determines that any decision to be
made with respect to a Subject Director should be made by a committee of the Board other than the Nominating and Corporate
Governance Committee, a committee consisting solely of Independent Directors (as defined below) who are not Subject Directors
(the committee described in clause (i) or (ii) of this sentence, the “Committee”), will make
a determination as to whether to recommend that the Board accept or reject any resignation of a Subject Director. The Committee
would be expected to recommend that the Board accept the resignation of a Subject Director absent exceptional circumstances.
As used herein, the term “Independent Director” means a director who complies with the “independent
director” requirements set forth in Section 7.
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The Board will make a determination, having considered
the recommendation of the Committee, as to whether to accept or reject any resignation of a Subject Director within ninety
(90) days from the date of the relevant shareholders’ meeting and shall notify the Subject Director of its decision.
A Subject Director will not participate in any meeting of the Board, the Committee or any other committee of the Board at
which the Subject Director’s resignation is considered.
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The Board shall accept the resignation of a Subject
Director absent exceptional circumstances and the resignation shall be effective when accepted by the Board. The Company shall
promptly issue a news release with the Board’s decision, a copy of which must be provided to any exchange on which the
Company’s securities are listed and filed with the Canadian securities commission or similar regulatory authority in
each province and territory of Canada in which the Company is a “reporting issuer” or the equivalent thereof and
the United States Securities and Exchange Commission. If the Board determines not to accept the resignation of a Subject Director,
the news release must fully state the reasons for the Board’s decision.
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In evaluating the resignation of a Subject Director,
the Board may consider all factors it believes relevant, including (i) the reasons that it believes a majority of the votes
cast at the meeting were not voted “for” the Subject Director’s election, (ii) whether the underlying cause
or causes of the lack of “for” votes are curable, (iii) the factors, if any, set forth in these Corporate Governance
Guidelines and Board Charter or other policies that are to be considered by the Nominating and Corporate Governance Committee
in evaluating potential candidates for the Board as such criteria relate to each Subject Director, (iv) whether the Subject
Director is a key member
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WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT A-4
of an established, active special committee
that has a defined term or mandate, and whether accepting the resignation of the Subject Director would jeopardize the achievement
of the committee’s mandate, (v) whether acceptance of any resignation would lead to a “change of control” of
the Company as determined pursuant to any Company financing or other material agreement, (vi) whether acceptance of any resignation
would lead to a default under any commercial agreement to which the Company or any of its subsidiaries is a party or otherwise
bound, or to the Company’s failure to comply with any applicable rule or regulation (including applicable securities laws
and applicable corporate law), (vii) whether acceptance of the resignation would cause the Company not to be in compliance with
the requirements of the OBCA concerning the Company having a minimum number of directors who are Canadian residents, and (viii)
whether majority voting was used for a purpose inconsistent with the policy objectives of the Toronto Stock Exchange related to
its majority voting requirement.
In the event that any Subject Director
does not tender his or her resignation in accordance with this Policy, he or she will not be re-nominated by the Board or the
Company for re-election.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT A-5
APPENDIX B SUMMARY
OF THE 2016 INCENTIVE AWARD PLAN
The 2016 Incentive Award Plan (the “Plan”)
was adopted by the Board of Directors (the “Board”) of Waste Connections, Inc. (the “Company”)
on June 1, 2016. The Plan became effective on the date of its adoption by the Board. Certain house-keeping amendments were made
to the Plan effective July 24, 2017. The Plan was further amended and restated effective July 24, 2018. The purpose of the Plan
is to provide a means for the Company and any subsidiary, through the grant of awards authorized under the Plan, to attract and
retain persons of ability as employees, directors and consultants and to motivate such persons to exert their best efforts on
behalf of the Company and any subsidiary.
The Plan authorizes discretionary grants
of share options, warrants, restricted shares, restricted share units, deferred share units, performance awards, dividend equivalents,
and share payments to selected employees (including officers) and consultants of the Company or a subsidiary and to members of
the Board.
The Employee Retirement Income Security
Act of 1974 does not govern the Plan. In addition, the Plan does not qualify under Section 401(a) of the Internal Revenue Code
of 1986, as amended (the “Code”).
Because this is a summary, it does not
contain all the information that may be important to you. To the extent any provision of this summary is inconsistent with the
terms of the Plan, the Plan will prevail. You may obtain a copy of the Plan and additional information about the Plan, without
charge, by written or oral request to us:
Waste Connections, Inc.
3 Waterway Square Place, Suite 110
The Woodlands, Texas 77380 USA
Tel.: (832) 442-2200
Attention: Executive Vice President, General Counsel and Secretary
Email: pats@wcnx.org
Securities Subject to the Plan
Under the terms of the Plan, the aggregate
number of Common Shares that may be subject to options and other awards is 7,500,000 Common Shares (not including any Common Shares
purchased on the open market). The Common Shares covered by the Plan may be authorized but unissued Common Shares in the capital
of the Company. Any shares (i) tendered or withheld to satisfy the exercise price of an option or purchase price of a warrant,
(ii) tendered or withheld to satisfy the tax withholding obligation with respect to any award, and (iii) reserved for issuance
on the exercise of any options or warrants which are settled for cash proceeds instead of through the issuance of Common Shares
upon the exercise of such options or warrants, will not be returned or re-added to the shares authorized for grant under the Plan.
However, any Common Shares repurchased
by the Company prior to vesting at the same price paid by the participant so that such Common Shares are returned to the Company
will again be available for awards under the Plan, and the payment of dividend equivalents in cash in conjunction with any outstanding
awards will not be counted against Common Shares available for issuance under the Plan. To the extent permitted by applicable
law or any exchange rule, substitute awards shall not reduce the Common Shares authorized for grant under the Plan. Additionally,
in the event that a company acquired by the Company or any subsidiary or with which the Company or any subsidiary combines has
shares available under a pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination,
subject to any approval required from any share exchange on which the Common Shares are listed, the shares remaining available
for issuance pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio
or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable
to the holders of common shares of the entities party to such acquisition or combination) may be used for awards under the Plan
and shall not reduce the Common Shares authorized for grant under the Plan; provided that awards using such available Common Shares
shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition
or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its subsidiaries
immediately prior to such acquisition or combination.
The maximum number of Common Shares that
may be subject to one or more awards granted to any one participant pursuant to the Plan during any calendar year is 750,000,
the maximum number of Common Shares that may be subject to one or more share options granted to any one participant pursuant to
the Plan during any calendar year is 750,000, the maximum number of Common
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Shares that may be subject to one or more
warrants granted to a participant pursuant to the Plan during any calendar year is 375,000, the maximum amount that may be paid
to any one participant in cash during any calendar year with respect to awards payable in cash is U.S. $7,500,000, the aggregate
number of Common Shares issuable to insiders (as defined by the Toronto Stock Exchange) pursuant to the Plan or any other security-based
compensation arrangements of the Company and its subsidiaries shall not exceed ten percent (10%) of the issued and outstanding
Common Shares, and during any one (1)-year period, the aggregate number of Common Shares issued to insiders under the Plan or
any other security-based compensation arrangements of the Company and its subsidiaries shall not exceed ten percent (10%) of the
issued and outstanding Common Shares. In addition, notwithstanding any other incentive compensation plan of the Company or any
of its subsidiaries, or any other compensatory policy or program of the Company applicable to its non-employee directors (collectively,
the “Director Programs”), the sum of (A) the aggregate grant date fair value (computed as of the date of grant
in accordance with applicable financial accounting rules) of all awards and any other security- based awards granted under the
Director Programs (other than with respect to compensation described in subsection (B) below) to such director during such calendar
year, subject to a maximum fair value of Cdn. $150,000 per calendar year (excluding the fair value of any awards and any other
security-based awards granted under the Director Programs issued in lieu of cash fees, where the applicable award has the same
value as such cash fees, a one-time grant to a new director upon joining the Board, and any awards settled only in cash); and
(b) the aggregate cash value of such director’s retainer, meeting attendance fees, committee assignment fees, lead director
retainer, committee chair and member retainers and other Board fees related to service on the Board or committee(s) of the Board
that are initially denominated as a cash amount or any other property, other than Common Shares or securities of the Company (whether
paid currently or on a deferred basis or in cash or other property), for such calendar year, for any individual, non-employee
director for any calendar year beginning on or after January 1, 2016 shall not exceed U.S. $350,000 (or U.S. $700,000 for any
non-employee director in the director’s first year of service or for any calendar year that such director serves as non-executive
chair of the Board).
Any Common Shares distributed pursuant
to an award may consist, in whole or in part, of authorized and unissued Common Shares or Common Shares purchased on the open
market, provided that, notwithstanding any provision in the Plan to the contrary, all options and warrants granted to Canadian
participants shall be settled by way of the issuance of previously unissued Common Shares from treasury of the Company. Except
where an award is explicitly required to be settled in Common Shares, no participant has any right to demand, be paid in, or receive
Common Shares in respect of any award.
Administration
The Compensation Committee of the Board,
or another committee or subcommittee of the Board or the Compensation Committee (the “Committee”), shall administer
the Plan. To the extent necessary to comply with Rule 16b-3 of the Exchange Act, and with respect to awards that are intended
to be performance- based compensation, including options or warrants, then the Committee (or another committee or subcommittee
of the Board assuming the functions of the Committee under the Plan) shall take all action with respect to such awards, and the
individuals taking such action shall consist solely of two or more directors of the Company who are not employees (the “Non-Employee
Directors”) appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as both
a “non- employee director” as defined by Rule 16b-3 of the Exchange Act or any successor rule and an “outside
director” for purposes of Section 162(m) of the Code (“Section 162(m)”). Additionally, to the extent
required by applicable law, each of the individuals constituting the Committee shall be an “independent director”
under applicable law and the rules of any securities exchange or automated quotation system on which the Common Shares are listed,
quoted or traded. Notwithstanding the foregoing, any action taken by the Committee shall be valid and effective, whether or not
members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership
or otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment
of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering
written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board. Notwithstanding the foregoing,
(i) the full Board, acting by a majority of its members in office, shall conduct the general administration of the Plan with respect
to awards granted to Non- Employee Directors and, with respect to such awards, the terms “Administrator” and
“Committee” as used in the Plan shall be deemed to refer to the Board and (ii) the Board or Committee may delegate
its authority hereunder to the extent permitted by the Plan.
Duties and Powers of Committee
It shall be the duty of the Committee to
conduct the general administration of the Plan in accordance with its provisions. The Committee shall have the power to interpret
the Plan, any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern
a specified type of award granted under the Plan and pursuant to which such type of award may be granted under the Plan (the “Program”)
and any written notice, agreement, terms and conditions, contract or other instrument or document evidencing an award, including
through electronic medium, which shall contain such terms and conditions with respect to an award as the Administrator shall determine
consistent with the Plan (the “Award Agreement”), and to adopt such rules for the administration, interpretation
and application of the Plan as are not inconsistent therewith, to interpret, amend or revoke any such rules
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and to amend any Program or Award Agreement;
provided that the rights or obligations of the participant that is the subject of any such Program or Award Agreement are not
affected adversely by such amendment, unless the consent of the participant is obtained or such amendment is otherwise permitted
under the Plan. Any such grant or award under the Plan need not be the same with respect to each participant. In its sole discretion,
the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except
with respect to matters which under Rule 16b-3 under the Exchange Act or any successor rule, or Section 162(m), or any regulations
or rules issued thereunder, or the rules of any securities exchange or automated quotation system on which the Common Shares are
listed, quoted or traded are required to be determined in the sole discretion of the Committee.
Authority of Administrator
“Administrator” means
the entity that conducts the general administration of the Plan as provided in the Plan. With reference to the duties of the Committee
under the Plan which have been delegated to one or more persons, or as to which the Board has assumed, the term “Administrator”
shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption
of such duties.
Subject to the Company’s bylaws,
the Committee’s Charter, the rules of any securities exchange or automated quotation system on which the Common Shares are
listed, quoted or traded, any specific designation in the Plan, the Administrator has the exclusive power, authority and sole
discretion to: designate eligible individuals to receive awards; determine the type or types of awards to be granted to each eligible
individuals; determine the number of awards to be granted and the number of Common Shares to which an award will relate; determine
the terms and conditions of any award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price,
purchase price, any performance criteria, any restrictions or limitations on the award, any schedule for vesting, lapse of forfeiture
restrictions or restrictions on the exercisability of an award, and accelerations or waivers thereof, and any provisions related
to non-competition and recapture of gain on an award, based in each case on such considerations as the Administrator in its sole
discretion determines; determine whether, to what extent, and pursuant to what circumstances an award may be settled in, or the
exercise price of an award may be paid in cash, Common Shares, other awards, or other property, or an award may be canceled, forfeited,
or surrendered; prescribe the form of each Award Agreement, which need not be identical for each participant; decide all other
matters that must be determined in connection with an award; establish, adopt, or revise any rules and regulations as it may deem
necessary or advisable to administer the Plan; interpret the terms of, and any matter arising pursuant to, the Plan, any Program
or any Award Agreement; make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator
deems necessary or advisable to administer the Plan; and accelerate wholly or partially the vesting or lapse of restrictions of
any award or portion thereof at any time after the grant of an award, subject to whatever terms and conditions it selects and
the Plan.
Eligibility
Persons eligible to participate in the
Plan include selected employees (including officers), consultants of the Company or a subsidiary of the Company and directors,
as determined by the Committee.
Options
Options include (A) in respect of a U.S.
participant, an option to acquire one Common Share, awarded under the Plan, that is not intended to qualify as an “incentive
share option” within the meaning of Section 422 of the Code, and (B) in respect of a Canadian participant, an option to
acquire one Common Share awarded under the Plan. Each option granted shall be evidenced by an Option Agreement in substantially
the form as may be approved by the Administrator, which Option Agreement shall specify the term for which the option thereunder
is granted and shall provide that such option shall expire at the end of such term. Each Option Agreement shall specify the exercise
price per Common Share, as determined by the Administrator at the time the option is granted, which exercise price shall in no
event be less than the fair market value per Common Share on the date of grant.
Warrants
Each warrant granted shall be evidenced
by a Warrant Agreement in substantially the form as may be approved by the Administrator. Each Warrant Agreement shall specify
the term for which the warrant thereunder is granted and shall provide that such warrant shall expire at the end of such term.
Each Warrant Agreement shall specify the purchase price per share, as determined by the Administrator at the time the warrant
is granted, which purchase price shall in no event be less than the fair market value per share on the date of grant.
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Restricted Shares
Restricted shares are Common Shares awarded
under the Plan in accordance with the terms and conditions of the Plan which are subject to forfeiture or buyback by the Company
over the restriction period. Each restricted share award shall be evidenced by a Restricted Share Agreement in substantially the
form as may be approved by the Administrator. The restricted shares shall entitle the restricted share participant to receive
restricted shares, which are subject to forfeiture until the end of the restriction period. The Administrator shall have the discretionary
authority to authorize restricted share awards and determine the restrictions or restriction period for each such restricted share
award. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions
may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected
by the Administrator, including, without limitation, criteria based on the participant’s duration of employment, directorship
or consultancy with the Company, the performance criteria, Company performance, individual performance or other criteria selected
by the Administrator. By action taken after the restricted shares are issued, the Administrator may, on such terms and conditions
as it may determine to be appropriate, accelerate the vesting of such restricted shares by removing any or all of the restrictions
imposed by the terms of the applicable Program or Award Agreement. Restricted shares may not be sold or encumbered until all restrictions
are terminated or expire.
Restricted Share Units
A restricted share unit is a unit credited
by means of a bookkeeping entry on the books of the Company, awarded pursuant to the Plan, representing the right to receive a
cash payment or its equivalent in Common Shares (or a combination) (determined at the discretion of the Company) upon the attainment
of designated performance milestones or the completion of a specified period of employment or service with the Company or any
subsidiary or upon a specified date or dates following the attainment of such milestones or the completion of such service period.
Each restricted share unit award shall be evidenced by a Restricted Share Unit Agreement in substantially the form or forms as
may be approved by the Administrator. The restricted share units subject to a restricted share unit award shall entitle the restricted
share unit participant to receive the payment underlying those restricted share units upon the attainment of designated performance
goals, including but not limited to one or more performance criteria, Company performance, individual performance, the satisfaction
of specified employment or service requirements, upon the expiration of a designated time period following the attainment of such
goals or the satisfaction of the applicable service period or other specific criteria, in each case, subject to the Plan, on a
specified date or dates or over any period or periods, as determined by the Administrator. Except for restricted share units granted
to a Canadian employee participant, the Administrator may provide the restricted share unit participant with the right to elect
the issue date or dates for the Common Shares which vest under his or her restricted share unit award. Subject to the Plan, the
issuance of vested Common Shares under the restricted share unit award may be deferred to a date following the termination of
the restricted share unit participant’s employment or service with the Company and its subsidiaries. Like restricted shares,
restricted share units may not be sold, or otherwise transferred or hypothecated. Common Shares underlying restricted share units
will not be issued until the restricted share units have vested and the Company elects to transfer Common Shares to the participant,
and recipients of restricted share units will have no voting or dividend rights prior to the time when vesting conditions are
satisfied and the underlying Common Shares are transferred to the recipient.
Deferred Share Units
A deferred share unit is a unit credited
by means of a bookkeeping entry on the books of the Company, awarded to a director pursuant to the Plan, representing the right
to receive a cash payment or its equivalent in Common Shares (or a combination thereof) (determined at the discretion of the Company)
on the applicable deferred share unit settlement date, which is the third business day following the earliest time of: (i) the
director’s death; or (ii) the latest time that the director ceases to be an employee, officer or director of the Company
and any affiliate (within the meaning of that term in paragraph 8 of Interpretation Bulletin IT-337R4, Retiring Allowances [Consolidated],
or any successor publication thereto). Each deferred share unit award shall be evidenced by a Deferred Share Unit Agreement in
substantially the form or forms as may be approved by the Administrator.
Dividend Equivalents
Dividend equivalents are rights to receive
the equivalent value (in cash or shares) of dividends paid on Common Shares. They represent the value of the dividends per share
paid by the Company, if any, calculated with reference to the number of Common Shares that are subject to any award held by the
participant, except that no dividend equivalents may be payable with respect to options or warrants granted under the Plan. Dividend
equivalents that are granted by the Administrator are credited as of dividend payment dates with respect to record dates that
occur during the period between the date an award is granted to a participant and the date such award vests, is exercised, is
distributed or expires, as determined by the Administrator.
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Performance Awards
Any award under the Plan may be issued
as a performance award that is earned based on the attainment of performance criteria or performance goals, including performance
awards in the form of a cash bonus award, share bonus award, performance award or incentive award that is paid in cash, Common
Shares or a combination of both, which is payable upon the attainment of performance goals. The Committee, in its sole discretion,
may determine at the time an award is granted or at any time thereafter whether such award is intended to qualify as performance-
based compensation. The Administrator is authorized to grant performance awards, including awards of performance share units,
to any eligible individual and to determine whether such performance awards shall be performance-based compensation; provided
that such awards granted to Canadian participants shall also have the terms and conditions specified in the Plan. For periods
prior to January 1, 2018, the Administrator was permitted to grant performance awards to U.S. participants who were or may have
been “covered employees,” as defined in Section 162(m), that were intended to be “performance-based compensation”
within the meaning of Section 162(m) in order to preserve the deductibility of such awards for U.S. federal income tax purposes.
Share Payments
A share payment is a payment in the form
of Common Shares. The number or value of shares of any share payment will be determined by the Administrator and may be subject
to a vesting schedule or other conditions or criteria determined by the Administrator. Share payments may, but are not required
to, be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible
to receive awards.
Foreign Holders
For purposes of complying with the laws
in countries other than Canada or the United States in which the Company and its subsidiaries operate or have employees, Non-Employee
Directors or consultants, or in order to comply with the requirements of any securities exchange outside Canada or the United
States, the Administrator, in its sole discretion, shall have the power and authority to: (i) determine which subsidiaries
shall be covered by the Plan; (ii) determine which eligible individuals outside Canada and the United States are eligible to participate
in the Plan; (iii) modify the terms and conditions of any award granted to eligible individuals outside Canada and the United
States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (iv) establish
subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable
(any such subplans and/or modifications shall be attached to the Plan as appendices); provided, however, that no such subplans
and/or modifications shall increase the share limitations contained in the Plan; and (v) take any action, before or after an award
is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals
or listing requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take
any actions hereunder, and no awards shall be granted, that would violate applicable law. For purposes of the Plan, all references
to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction
other than Canada and the United States or a political subdivision thereof.
Non-Employee Director Award
The Administrator, in its sole discretion,
may provide that awards granted to Non-Employee Directors shall be granted pursuant to a written nondiscretionary formula established
by the Administrator (the “Non-Employee Director Equity Compensation Policy”), subject to the limitations of
the Plan. The Non-Employee Director Equity Compensation Policy shall set forth the type of award(s) to be granted to Non-Employee
Directors, the number of Common Shares to be subject to Non-Employee Director awards, the conditions on which such awards shall
be granted, become exercisable and/or payable and expire, and such other terms and conditions as the Administrator shall determine
in its sole discretion. The Non-Employee Director Equity Compensation Policy may be modified by the Administrator from time to
time in its sole discretion.
Additional Terms and Conditions
Awards will be subject to such additional
terms and conditions as determined by the Administrator, consistent with the Plan. Each award shall be evidenced by an Award Agreement
that sets forth the terms, conditions and limitations for such award, which may include the term of the award, the provisions
applicable in the event of the participant’s termination of continuous status as an employee, director or consultant, and
the Company’s authority to unilaterally or bilaterally amend, modify, suspend, cancel or rescind an award. Award Agreements
evidencing awards intended to qualify as performance-based compensation shall contain such terms and conditions as may be necessary
to meet the applicable provisions of Section 162(m).
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Payment Methods
Subject to the provisions of any particular
award, the Administrator will determine the methods by which payments by any award holder with respect to any awards granted under
the Plan may be made, including without limitation: (1) cash or check, (2) Common Shares (including, in the case of payment of
the exercise price of an award, Common Shares issuable pursuant to the exercise of the award, provided that Canadian employee
participants shall not be entitled to pay the exercise price of options with any Common Shares issued pursuant to the exercise
of an option or warrant in the preceding two (2) year period) or Common Shares held for such period of time as may be required
by the Administrator in order to avoid adverse accounting consequences, in each case, having a fair market value on the date of
delivery equal to the aggregate payments required, (3) the delivery of a notice that the award holder has placed a market sell
order with a broker acceptable to the Company with respect to Common Shares then issuable upon exercise or vesting of an award,
and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction
of the aggregate payments required; provided that payment of such proceeds is then made to the Company upon settlement of such
sale or (iv) other form of legal consideration acceptable to the Administrator in its sole discretion. The Administrator shall
also determine the methods by which Common Shares shall be delivered or deemed to be delivered to participants. Notwithstanding
any other provision of the Plan to the contrary, no participant who is a director or an “executive officer” of the
Company within the meaning of either the OSA or Section 13(k) of the Exchange Act shall be permitted to make payment with respect
to any awards granted under the Plan, or continue any extension of credit with respect to such payment, with a loan from the Company
or a subsidiary or a loan arranged by the Company or a subsidiary in violation of Section 13(k) of the Exchange Act.
Only whole Common Shares may be purchased
or issued pursuant to an award. No fractional shares will be issued under the Plan and, subject to the provisions of any particular
award, the Administrator will determine whether cash will be provided in lieu of fractional shares or whether such fractional
shares will be eliminated by rounding down.
Forfeiture and Claw-Back Provisions
The Administrator may provide or require
a participant to agree that any proceeds, gains or economic benefit actually or constructively received by the participant upon
any receipt or exercise of an award, or receipt or resale of any shares underlying the award, will be paid to the Company and
the award will terminate and any unexercised portion of the award (whether or not vested) forfeited if (i) there is a termination
of service during a specified period of time; (ii) the participant engages in activity in competition with the Company or which
is inimical, contrary or harmful to the interests of the Company; or (iii) the participant incurs a termination of service for
“cause”. All awards are subject to the provisions of any claw-back policy implemented by the Company, including any
claw-back policy adopted to comply with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street
Reform and Consumer Protection Act, to the extent set forth in such policy and/or in an applicable award agreement.
Transferability
Generally, awards under the Plan may only
be transferred by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a
domestic relations order, unless and until such award has been exercised or the Common Shares underlying such award have been
issued and all restrictions applicable to such shares have lapsed. No award or interest or right therein may be liable for the
debts, contracts or engagements of the participant or his or her successors in interest. However, subject to certain terms and
conditions, the Administrator may permit an award holder to transfer an award to any “permitted transferee” under
applicable securities laws or any other transferee specifically approved by the Administrator.
Adjustment on Certain Events
In the event of any share dividend, share
split, share consolidation, combination or exchange of shares, merger, consolidation or other distribution (other than normal
cash dividends) of Company assets to shareholders, or any other change affecting the Common Shares or price of the Common Shares
other than an equity restructuring (a nonreciprocal transaction between the Company and its shareholders, such as a share dividend,
share split, share consolidation, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that
affects the number or kind of Common Shares (or other securities of the Company) or the share price of Common Shares (or other
securities) and causes a change in the per-share value of the Common Shares underlying outstanding awards), the Administrator
may make equitable adjustments, if any, to reflect such change with respect to: (i) the aggregate number and kind of shares that
may be issued under the Plan; (ii) the number and kind of shares (or other securities or property) subject to outstanding awards;
(iii) the number and kind of shares (or other securities or property) that may be issued by a single officer under the Plan; (iv)
the terms and conditions of any outstanding awards (including, without limitation, any applicable performance targets or criteria
with respect thereto); and (v) the grant or exercise price per share for any outstanding awards under the Plan. Any adjustment
to an option granted to a Canadian employee participant shall be made consistent with certain Canadian federal income tax requirements.
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Termination or Amendment
The Board or the Committee may terminate,
suspend, amend, or modify the Plan at any time. However, except to the extent permitted by the Plan in connection with certain
changes in capital structure, the Company’s shareholders’ approval is required for any amendment to increase the number
of Common Shares available under the Plan, to reduce the price per Common Share of any outstanding option or warrant granted under
the Plan, reduce any purchase price for any other awards as set at the time of grant, extend the term of any award, make any amendment
to remove or exceed the insider and Non-Employee Director participation limits, or to cancel any option or warrant in exchange
for cash or another award when the option or warrant price per share exceeds the fair market value of the underlying Common Shares.
In addition, except with respect to certain modifications relating to deferred compensation under Section 409A of the Code (“Section
409A”) and certain forfeiture and clawback provisions, no amendment, suspension or termination of the Plan may, without
the consent of the affected participant, impair any rights or obligations under any outstanding award, unless the award itself
otherwise expressly so provides.
Tax Withholding
The Company or any subsidiary has the authority
and right to deduct or withhold, or to require participants to remit to the Company or subsidiary, an amount sufficient to satisfy
federal, provincial, state, local and foreign taxes (including the participant’s FICA, Canada Pension Plan contributions,
employment tax, Employment Insurance (Canada) premiums, or other social security contribution obligation) required by law to be
withheld with respect to any taxable event concerning a participant arising as a result of the Plan. The Administrator may in
its discretion allow a holder to satisfy such withholding obligations by withholding, or allowing the holder to elect to have
the Company withhold, Common Shares otherwise issuable under any award (or allow the surrender of Common Shares). The number of
Common Shares which may be so withheld or surrendered shall be limited to the number of Common Shares which have a fair market
value on the date of withholding or repurchase equal to the aggregate amount of such liabilities based on the minimum statutory
withholding rates for federal, provincial, state, local and foreign income tax and payroll tax purposes that are applicable to
such supplemental taxable income.
Certain Restrictions on Resale
Purchases and sales of Common Shares by
our directors and officers and beneficial owners of more than 10% of the outstanding Common Shares (including shares acquired
under the Plan or otherwise) may, under certain circumstances, subject such persons to reporting and/or liability under Section
16 of the Exchange Act. If you are an officer or director of the Company, or beneficial owner of more than 10% of Common Shares,
you are advised to consult with your own legal advisor regarding the reporting requirements under Section 16 of the Exchange Act
that may be applicable to awards granted to you under the Plan and before engaging in transactions involving any of Common Shares.
If you are not considered our “affiliate,”
as defined in Rule 144 under the Securities Act, you may resell the Common Shares acquired under the Plan without restriction
(subject to compliance with Section 16(b) under the Exchange Act). If you are considered our “affiliate,” which is
likely if you are either a director or an officer, you may resell such shares in compliance with the requirements of Rule 144
under the Securities Act without registration; however, you will be subject to the volume limitation and manner of sale restrictions
set forth in Rule 144 under the Securities Act.
If, however, you are an employee, director,
officer or beneficial owner of more than 10% of the outstanding Common Shares, and are aware of material inside information regarding
us or any aspect of our business, you cannot sell Common Shares, whether purchased through the Plan or otherwise, before the information
has been disseminated by us to the public. Generally, “material inside information” is information that is both important
to us (e.g., may impact our share price) and nonpublic (not yet disclosed through press releases, newspaper articles or
otherwise to the public which buys and sells securities).
Additionally, if you are a director, executive
officer or key employee, under our insider trading compliance program you are generally prohibited from purchasing or selling
any security of the Company, including Common Shares acquired through the Plan, during certain blackout periods. Further information
about our insider trading compliance program may be obtained by contacting the Company at the following address:
Waste Connections, Inc.
3 Waterway Square Place, Suite 110
The Woodlands, Texas 77380 USA
Tel.: (832) 442-2200
Attention: Executive Vice President, General Counsel and Secretary
Email: pats@wcnx.org
You are advised to consult with your own
legal advisor about the applicability and effect of these restrictions on you.
WASTE CONNECTIONS, INC. | 2021 PROXY STATEMENT B-7
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