Allied Waste defends change-in-control payments for key execs

By Lisa Kerner

Charlotte, N.C., Sept. 23 - Allied Waste Industries, Inc.'s board of directors said that despite opposition by shareholder CtW Investment Group, it believes that approved amendments addressing change-in-control payments and other employment terms are in the best interests of Allied Waste stockholders.

On Sept. 10, CtW asked the Allied Waste board to rescind increases to change-in-control payments for the top five Allied Waste executives approved in connection with the company's proposed merger with Republic Services, Inc., a Fort Lauderdale, Fla., solid waste collection company.

Allied Waste, in a Sept. 18 letter to CtW, said the executive employment agreements are a "critical component in attracting and retaining the best management talent."

In addition, the change-in-control payments are "key tools to motivate and retain management in connection with strategic transactions such as the pending Allied-Republic merger," it was reported in a form 8-K filed with the Securities and Exchange Commission.

The amendments, approved on June 22, will continue to apply if the Allied-Republic merger is not consummated for any reason, Allied Waste said.

CtW said that based on Allied Waste's 2008 annual meeting proxy and the preliminary proxy for the proposed merger, the total change-in-control payments for the top five Allied Waste executives increased by over $21 million between Dec. 31, 2007 and Aug. 1.

According to Allied Waste, the merger will not trigger any cash change-in-control payment for two of the five executives who are expected to leave once the transaction is complete.

Republic Services rejected Waste Management, Inc.'s $37-per-share offer in favor of its planned merger with Allied Waste, a Phoenix-based non-hazardous solid waste services company, it was previously reported.

Waste Management is a Houston integrated waste services provider.

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