Sean Steves
CASELLA WASTE SYSTEMSAbout Sean Steves
Senior Vice President and Chief Operating Officer of Solid Waste Operations at Casella Waste Systems (CWST); designated as a Named Executive Officer (NEO) for fiscal 2024. His current employment agreement is dated June 20, 2022 and effective July 1, 2022; age and education are not disclosed in the proxy reviewed . Company performance context during the latest year: FY2024 revenue grew $292.7M (+23.1%), Adjusted EBITDA increased $66.0M (+22.4%), while net income declined $11.9M (−46.7%) due to higher D&A from acquisitions; total shareholder return (TSR) rose 129.9% from 12/31/2019 to 12/31/2024 . In FY2024, NEO annual cash incentives paid out at 114.1% of target, driven by strong Free Cash Flow performance and ESG improvements .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | Not disclosed in CWST proxy filings reviewed |
External Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| — | — | — | Not disclosed in CWST proxy filings reviewed |
Fixed Compensation
| Metric | FY 2023 | FY 2024 |
|---|---|---|
| Base Salary ($) | $320,850 | $335,850 |
| Target Bonus (% of Salary) | 75% | 75% |
| Target Bonus ($) | $240,638 | $251,888 |
| Actual Annual Cash Incentive Paid ($) | $141,666 | $287,342 |
Perquisites (2024): company vehicle/gas card and personal trash service ($5,150); 401(k) match ($6,257); no tax gross-ups for Steves .
Performance Compensation
Annual Cash Incentive (Design and FY2024 Outcome)
| Metric | Weight | Threshold | Target | Max | Actual | Payout % |
|---|---|---|---|---|---|---|
| Adjusted Operating Income | 45% | $106.6M | $110.1M | $118.5M | $104.3M | 24.1% |
| Adjusted Free Cash Flow | 45% | $145.1M | $146.1M | $154.7M | $158.3M | 200% |
| Improvement in Total Recordable Incident Rate | 5% | 5.09 | 4.99 | — | 5.08 | 64.8% |
| Improvement in Turnover Rate | 5% | 28.1% | 27.2% | — | 26.6% | 100% |
| Overall Payout vs Target | — | — | — | — | — | 114.1% |
Notes:
- Same metric weighting framework used in FY2023, with outcomes producing 58.9% payout that year .
- Committee adjusted performance goals pro-rata for material acquisitions to preserve goal rigor and avoid windfalls (Whitetail in 2024; GFL/Twin Bridges in 2023) .
Long-Term Equity Awards (Grant Mix, Terms, and Steves’ Grants)
- Mix: 25% RSUs (time-based, vest in 3 equal annual installments starting year 1); 75% PSUs (three-year performance period; 50% Adjusted Free Cash Flow, 50% Adjusted EBITDA; Relative TSR multiplier 80–120% vs Russell 2000) .
- Double-trigger equity vesting on change in control under the plan .
| Grant Year | RSUs (#) | RSU Fair Value ($) | PSUs Target (#) | PSU Fair Value ($) | Key Terms |
|---|---|---|---|---|---|
| 2023 (3/10/2023) | 928 | $69,980 | 2,784 | $231,518 | RSUs: 3-year ratable vest; PSUs: 2023–2025 performance with TSR multiplier |
| 2024 (3/12/2024) | 879 | $82,512 | 2,637 | $277,808 | RSUs: 3-year ratable vest; PSUs: 2024–2026 performance with TSR multiplier |
PSU Achievement Example (2012-cycle vesting reference is not applicable; see 2022 grant below):
- 2022 PSUs (measure in FY2024): Company achieved 200% on both FCF and EBITDA; TSR at 71.7th percentile (110% multiplier); overall 220% vesting. Steves: 662 target → 1,456 shares issued (220%) .
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership (March 31, 2025) | 5,589 Class A shares; under 1% ownership (as marked “*”) |
| Unvested RSUs (12/31/2024) | 2022: 221; 2023: 619; 2024: 879 (total 1,719) |
| Outstanding PSUs at Target (12/31/2024) | 2023 grant: 2,784; 2024 grant: 2,637 |
| Stock Options | None outstanding for Steves |
| Ownership Guidelines | Other executive officers: 1× base salary; compliance as of Mar 1, 2025 (Steves in compliance) |
| Hedging/Pledging | Hedging and pledging prohibited; limited pledge exceptions require CFO/GC and Audit Committee approval (no pledging disclosed for Steves) |
Employment Terms
| Topic | Steves’ Terms |
|---|---|
| Employment Agreement | Dated June 20, 2022; effective July 1, 2022 |
| Non-Compete / Non-Solicit | 1-year non-compete within 100 miles of any CWST facility; 1-year non-solicit |
| Termination Without Cause / Good Reason | Cash = highest base salary + target annual cash incentive; benefits for 1 year; equity vests in full; plus accrued pay/bonus/vacation |
| Change-in-Control (with termination) | Double-trigger acceleration; see below |
| Clawback | Amended and Restated Compensation Clawback Policy adopted Oct 2023 covering incentive-based comp over prior 3 years; broader recovery for misconduct contributing to restatements |
| Perquisites | 2024: company vehicle/gas card, personal trash removal (total $5,150); 401(k) match $6,257 |
| Tax Gross-Ups | None disclosed for Steves in 2024 |
Summary of Quantified Payments (as of 12/31/2024):
- Termination Without Cause (or Good Reason): Cash $587,738; Benefits $16,497; RSUs accelerated $181,887; no options .
- Change-in-Control + Termination: Cash $587,738; Benefits $16,497; RSUs and PSUs accelerated $755,483; no options .
- Disability: Cash $587,738; Benefits $16,497; RSUs and PSUs accelerated $755,483 .
- Death: Cash $587,738; RSUs and PSUs accelerated $755,483 .
Compensation Structure Analysis
- Equity-heavy, performance-tilted mix: 75% of annual equity is PSU-based with FCF/EBITDA targets and a relative TSR modifier, strengthening pay-for-performance alignment .
- ESG in annual bonus: Safety (TRIR) and turnover metrics each at 5% weighting align human capital outcomes with pay; 2024 outcomes contributed to the 114.1% payout .
- Goal integrity through M&A: The committee adjusted annual and PSU financial targets pro-rata for acquired businesses to avoid windfalls and preserve rigor—an investor-friendly practice .
- No hedging/pledging; robust clawback: Policy-level safeguards reduce misalignment and governance risk .
- Severance/co‑c relatively moderate: 1× cash multiple plus equity vesting (vs. CEO’s higher multiple) limits parachute inflation while maintaining retention .
Compensation Peer Group (Benchmarking)
- Peer group: GFL Environmental, Waste Connections, Waste Management, Republic Services .
- Targeting: Committee reviews market data but does not target specific percentile levels for elements or total comp, considering multiple factors (plan, budget, guidance, experience, performance) .
Say‑on‑Pay & Shareholder Feedback
- Say‑on‑pay support: 97.7% approval at the 2024 Annual Meeting, indicating strong investor endorsement of program design .
- Ongoing consideration: Committee incorporates shareholder feedback in compensation decisions .
Investment Implications
- Alignment: High PSU weighting with FCF/EBITDA targets and TSR multiplier, ESG-linked bonus metrics, ownership guidelines, clawback, and anti-hedging/pledging policies point to strong alignment and lower governance risk .
- Retention risk: Steves’ severance economics (1× cash + equity vesting) and sizeable unvested equity (1,719 RSUs; 5,421 target PSUs) provide meaningful retention value without excessive cash commitments .
- Trading signals: The vesting calendar (annual RSU tranches and three-year PSU cliffs) may create periodic liquidity events; 2022 PSU vesting at 220% demonstrates strong recent performance leverage to equity outcomes, potentially followed by Form 4 transactions around vest dates if shares are sold to cover taxes .
- Performance backdrop: FY2024 delivered robust revenue and Adjusted EBITDA growth (offset by higher D&A), and multi-year TSR outperformance, supporting elevated variable pay outcomes while remaining within a disciplined framework that adjusted goals for acquisitions to avoid windfalls .