Perspectives in Sustainability: Fireside Chat with Jim Fish, '98, CEO of Waste Management

Chris Wheat:
Okay, I think Caroline and Jim are ready to get started. So hello and welcome to today's event, the Perspectives in Sustainability event, a Fireside Chat with Jim Fish, a Booth graduate and CEO of Waste Management.

My name is Chris Wheat. I'm a Sustainability Executive in Residence at the Rustandy Center for Social Sector Innovation. I previously worked on environmental issues at both Natural Resources Defense Council and the Chicago Mayor's Office.

For those of you who are interacting with the Rustandy Center for the first time, the center is a social impact hub at the University of Chicago Booth School of Business for people committed to tackling complex social and environmental problems. It's an important part of the university's social impact ecosystem on the whole, and it is designed to promote innovation, advance research, and develop the people and practices that can accelerate social change.

I'm also a Booth grad, class of 2010. Was involved in various student groups. I served as a co-chair of AAMBA, was a member of Net Impact, and I still think that you (clears throat) can likely find my Booth Follies performances on YouTube.

The Perspectives in Sustainability event series is designed to help students, in particular in the Booth community as a whole, grapple with the most challenging issues facing our planet, and to understand how to use their MBAs to help address those issues. During our first session in October, I was joined with fellow Booth grad and Sustainability Executive-in-Residence Daphne Mazarakis to discuss the many sustainability career paths available to students. Tonight's event will feature two other alumni, Rustandy Center's Executive Director, Caroline Grossman, and President and CEO of Waste Management, Jim Fish.

Now after the fireside discussion, Booth students will have the unique opportunity to discuss a case with myself, Jim, and Regional Waste Management Vice President, and also Booth alum, Tom Bolio. If you're interested in attending the case study at 5:45, please register using the link in your Eventbrite email reminder for the webinar.

Before I introduce our speakers and we kick things off, some logistical items for today. Our panelists will begin by discussing a series of questions. We will definitely leave 10 minutes at the end of the session for audience Q and A. If you have a question, please submit it via the Q and A chat function within Zoom. We'll try to get to as many questions as time allows.

I'm now excited to introduce tonight's speakers. Caroline, as I said earlier, is currently the Executive Director at The Rustandy Center, and is also assistant adjunct professor at Chicago Booth. Previously, Caroline led The Rustandy Center's suite of programming to foster opportunities for students and alumni to channel a business toolkit for social impact, and spent time at the Kraft Foods Group as a brand manager.

Jim is currently president and CEO of Waste Management, managing over 55,000 employees nationwide. And since joining Waste Management in 2001, he has held several key positions including chief financial officer and many vice presidential roles. Under Jim's leadership, Waste Management began measuring their own sustainability metrics including using greenhouse gas emissions and has converted 70% of their truck fleet to compress natural gas, with one third of that fuel being renewably sourced from. Caroline, take it away.

Caroline Grossman:
Great. Thank you so much, Chris. And Jim, thank you so much for joining us. So I saw the Waste Management truck in my alley this morning in Chicago, in Lake View, and most Americans think of Waste Management as the company that whisks away their trash every week, and don't give much thought to the huge environmental responsibility that Waste Management has nationwide. So Waste Management has a decade-long reputation as an industry leader in sustainable solutions. Can you talk a bit about how sustainability evolved as a central component of your strategy and approach?

Jim Fish:
Well, first of all, good afternoon, everyone, and thank you for having me today. I'm excited to be here.

You're right, Waste Management's been around, this will be our 50th year as a public company. So we celebrate that this year. I think actually June is the actual month. Sort of the first 40 years were really predominantly as a trash company. The last 10 years we've become the biggest, and not only are we the biggest trash collector and trash disposal company, but we're also the biggest recycler in North America. And we're really looking at this not only from an environmental perspective but also from a financial perspective. And we believe that the two can co-exist well. We think of, whether sustainability is the broader umbrella or recycling, which is a component of that, as being a real opportunity for us to separate ourselves.

I was asked the question when I presented last January at a National Geographic conference, so how is it that Waste Management can consider itself environmentally friendly when you're the biggest landfill company in North America? And honestly, it's a fair question, but my response was, well, first of all, how much of the trash that comes into our landfills, by the way it's about 110 million tons a year of trash that comes into our landfills, how much of that does Waste Management create? And the answer is none, basically. I mean, maybe a very small amount at our offices but effectively it's none. And what we're trying to do is sequester that at least for now in the most efficient manner but also at the same time looking for other solutions beyond landfills because for two reasons.

One is, we do believe that there is potentially a better solution than landfilling, but for now landfilling is a good solution as opposed to just dropping it on the ground. And then secondly, we think that we know that these landfills have a finite life and so how do we plan for the future when the future may not be landfilling once these landfills come to the end of their lives. Keep in mind a lot of these landfills are in metro areas and you're not going to replace them because those metro areas have grown and Houston is a good example. We have a landfill that was initially permitted in 1980 and now it's surrounded by homes. So once that landfill comes to the natural end of its life, we will either have to find an alternative solution or build a landfill 50 miles outside of town.

Caroline Grossman:
So it's interesting 'cause there are a number of components of your sustainability strategy.

You just talked about landfill but I know you've also thought a lot about carbon emissions and recycling. So let's take those one by one. In 2018 Waste Management announced a commitment to reduce carbon emissions by a factor of four in 20 years. How did you come up with this target and how will you get there?

Jim Fish:
Well, there's, first of all, you mentioned the big fleet and we do have a fleet that is approaching 20,000 vehicles. And so we started down a path of converting those to natural gas, and then there's a natural linkage there between the natural gas fleet and the gas that we capture at our landfills and turning that gas back into natural gas that we can then power those trucks. So that was a pretty natural linkage. And that certainly was a way to help with those sustainability goals.

By the way, there may be a question about electric vehicles. I can go into that in more detail. We are looking at electric vehicles and I would be… The nice part about our fleet strategy is that we can fairly quickly maneuver from natural gas to electric just the way we did from diesel to natural gas because we buy a lot of trucks every year. Right now we're trying to find the right solution for electric vehicles. There are certainly good solutions out there for electric cars but there are some complexities beyond electric cars for heavy trucks that have not allowed them to be, at this point, a viable solution. But we think they will be viable in the near term and then I would expect us to pivot fairly quickly.

The other component for us is the landfill. And that's where landfills by their nature decomp the trash, goes into landfill, and then it decomposes. And so we capture a significant portion of that gas, but there is a percentage of it that gets away. We call it fugitive gases. And so our efforts will be to not only convert that fleet that I talked about, but also make sure that those fugitive gases don't get away. And as we think about greenhouse gases, those gases coming out of the landfill are, in many cases, a big component of that gas is methane gas, and methane is more destructive as a greenhouse gas than is carbon. So capturing, making sure that instead of capturing whatever the percentage is, and I think the percentage today is around 75, 76%, capturing 95, 96%. First we need to make sure we understand where it's escaping. And so using advanced technologies to understand that is an important part of that strategy.

Caroline Grossman:
So the perfect follow-up question just came in on the chat from Agni Dishpandey, asking what are alternative uses and actions that you're considering taking for landfills? Agni asks, "Do you plan to continue building out landfills "in more and more remote locations?"

Jim Fish:
No, I mean, I'm not gonna say we're not gonna build landfills in remote locations. Keep in mind that when you do build a landfill, just from an economic standpoint not from an environmental standpoint, but the farther out you go, the more cost there is associated with it. So if I'm purely looking at this economically, if I think about whether it's Houston or Philadelphia where we have closed in landfills, once those landfills are full, yeah, we could build another landfill 100 miles out but there's a fair amount of cost associated with that. So there's an incentive for us to come up with a different type of disposal technology. And we've spent over $600 million looking for that disposal technology.

There's a difference in the composition of the material that goes into landfills is not only, we think of our household trash but there's industrial trash that goes there, there's industrial waste that goes in there. A lot of that is contaminated soils. There are a lot of, hopefully most of these that I'm holding here, it's just a plastic water bottle, we'd like to think that every one of those goes to our recycle plants. We know that that's not the case. And so how do we make sure that that material that's recyclable today goes to a recycle plant. Because it might surprise you to know that our landfills do not have the highest return on invested capital of all of our asset groups, of all of our business groups. The second highest return on invested capital for us are our recycle plants. And the first highest is not landfill. The first highest is our commercial collection business.

So from a purely economic standpoint it makes sense for us to look for those next solutions that might be less capital-intensive. Landfills are very capital intensive. It can cost hundreds of millions of dollars to build all of the collection, the water monitoring and the gas collection systems. So we've spent a fair amount of money looking for that next solution. And we're involved in several funds, green funds that look specifically for those types of solutions. We've got a couple of promising ideas on the horizon, one in particular. And should that turn into something that is commercializable, I think we have an opportunity to really expand that beyond the borders of the US and Canada, and into places like big countries like India, where clearly waste is a problem for them.

Caroline Grossman:
One of the things that's somewhat counterintuitive and so interesting about what you said about landfills is this point that it actually costs more to go further in that assume the sheer cost of land that's further from a population center is lower, but on a daily basis the issue of hauling out there clearly adds cost and clearly adds impact on our society. Just the fuel used to burn to get out there. So it's a really interesting point and it seems like a moment where business goals and sustainability goals do come together.

Jim Fish:
Well, you're right about the cost of land but look, there aren't any 2000-acre plots in downtown San Francisco or downtown Chicago. So most of the land that we would be evaluating is similar in cost and we're not putting a landfill up in Jackson Hole Wyoming. So the cost to transport because there's so much volume going into these sites far outweighs that incremental difference between being closer in, in terms of the real estate costs, over a long period of time.

Some of these landfills have 100-year lives.

So you can imagine if you're taking in, and by the way some of them take in, just to put this in perspective, one of our biggest landfills happens to be in Los Angeles which might surprise you and it is full every single day. We have permits that limit the amount of waste that can go in there. But you're talking about some of these landfills that take in 20,000 tons of material every day. And so you can imagine how much cost there is if a truck will move, some of these trucks will move 20, and in some cases more, but call it 10 to 20 tons a day. There's a lot of trucks moving. There's a lot of greenhouse gas emissions associated with those trucks moving farther out. So there's a number of environmental reasons why we would want to look for another for the next solution, the landfill replacement solution. And there are some economic reasons why we want to do that as well.

Caroline Grossman:
So I'd love to talk about recycling a bit. I will date myself here, but we've already said that I'm Booth MBA class of '03. I came of age when first nobody brought water with them anywhere. Then the hydration movement came to being and consumer CPG companies convinced everyone to buy plastic water bottles all the time and throw them away. And it was very trendy to have one with you. And around the time I was in business school, yeah, a little before that, we started recycling them. And recycling was what closed that virtuous circle where you had the trendy water, you were hydrated and you recycled your plastic bottle. And we now have a much, much better sense of the entire product life cycle, the issues, why that view is simplistic. But I think, I certainly do, everyone on this call does create recyclables and put something in a blue bin almost every day. So from your perspective, from the industry perspective, what's your strategic priority?

Jim Fish:
Well, look, you've hit on quite a few points here. So as we think about one of those strategic priorities for us, and really I think as an industry, is to improve recycling. If you think about recycling today, the technology is fairly old technology. I mean, some of the optical sorting technology has advanced, but things like magnets and those things have been around for a long time. And so part of the problem that we run into at our recycle plants is that those plastic water bottles that you talked about, those sort pretty easily, the Tide HDP, milk jugs, things like that, sort pretty easily. Ferrous metals sort easily and even non-ferrous metals, cardboards. But then you get a lot of material coming in that just about everything in front of you, you could look at your desk and probably pick out almost everything on there has some plastic component to it,

and whether it's these reading glasses I have on or pen or just about anything on the desk, exactly.

So the question is, how do we improve the technology? Are there technologies that we can purchase? Because we do get a lot of low value material coming into our plants. We think about the plastic, maybe the best example might be plastic bags at grocery stores. And while pre-COVID, we were all attempting to, we were all very focused on going away from single-use plastics, and now all of a sudden during COVID, single-use plastics are absolutely back, and I'm not sure that's necessarily a good thing.

We had National Geographic presented at our own WM Sustainability Forum a couple years ago when they talked about these big flotillas in the middle of the ocean, and they're largely comprised of plastic. Not necessarily the Ozarka water bottles here but other plastics, crates and things like that. So when a crate comes through our recycle facility there isn't a good way to recycle it. We don't have a great way to turn that crate back into another crate. We certainly have a way to turn plastic water bottles back into other plastic water bottles. So we're looking for technologies that improve the recycling process, that enable you to put more material into your recycle bin and rest assured that that will actually get recycled.

Today, oftentimes what happens is some of the material that we might think is recyclable, these glasses that I have on are pretty much all made of plastic, and those glasses, if they break, I might throw them in my recycle bin. Ultimately, there isn't a good solution for those when they come through the recycle plant. And it probably ends up going into what we call residual material and the residual material ends up going to an incinerator or might go to a landfill. I'd like to be able to find a solution that can take these glasses and whether it turns it back into another pair of glasses, I don't care what it turns it into, but something else so that it saves natural resources. And ultimately the objective of recycling is to save, is to preserve natural resources.

So we're looking at technologies that take low-value plastics for example, and mixed papers. This piece of paper here, yeah, it's somewhat valuable, but we don't get paid much for it, honestly. How do I take that piece of paper and this pair of glasses and turn it into something productive? There's a solution out there that I've talked about several times publicly that turns it into a roofing board. And that's not a roofing board for your house. It's not a shingle. It's for a commercial building. So it's for a big Target or a Home Depot. It's stronger than existing non-sustainable products. And, of course, it is sustainable in and of itself. So that may be a real solution for us. And it helps us maximize the amount of materials, particularly plastics, that come into landfills today that have a better home somewhere else.

Caroline Grossman:
Great. So the students have so many questions coming in. I wanna make sure to get to them but I wanna pick up on one thread that you raised, which was that single-use plastics are through the roof during the pandemic. And we've been all been living through such a moment of crisis in our country and in the world that we have been, rightfully I think, very focused on the pandemic. And some scientists and politicians argue that it has actually distracted us from the climate crisis. How have you seen the conversation about climate change and sustainability shift in the past year relative to the pandemic?

Jim Fish:
I think you're so right about this. And one of the things I'll say next week or in two weeks at our forum is that with all sensitivity to those things that we've been very focused on in 2020, obviously social justice, obviously COVID, those things, and they're critically important, we continue to focus on those, I worry a little bit that we've lost focus on the environment. And I always talk about our constituents that we service at Waste Management, and they're typically people. It's our shareholders, our customers, our communities, our employees.

But I call it the voiceless constituent is what I refer to as the environment because the environment doesn't call me and complain. The environment complains in decades, not in minutes. And so what tends to get our focus are those people issues, whether it's a social justice issue or whether it's a COVID issue, and they should get our focus, but I just don't wanna lose focus on the environment because I think Mother Nature is gonna say, wait a second, don't forget about me. I mean, I'm out here, and a year ago you were talking, we had Jim Fitterling, the CEO of Dow Chemical, at our sustainability forum, and Jim, we had a conversation on the CEO panel about single-use plastics and how we can work through that very important issue. And now it's not even on the table, it feels like.

Every restaurant you go to, you're using plastics again. It's all about disposable menus, unless there's a code that you can click on with your phone. But there are a lot of disposable plastics. My reusable bag for the grocery store gets frowned upon now. I have to use the plastic bags again. And so I worry a little bit that we have gotten distracted for the right reasons. I understand it. But I do worry that we've gotten a little bit distracted away from the environment. And our hope is to, whether it's through this conversation, whether it's through ours in a couple of weeks, is making sure that people haven't forgotten about sustainability, haven't forgotten about the environment because we're going to be living, I suspect COVID will be, in 10 years, will be a thing of the past. The environment will still be a heavy focus.

Caroline Grossman:
So students have such a range of questions coming in on the environment. I'm just gonna, rather than thread them together, I'm gonna try and just take them one by one. So Matt Wash asks if the company has capabilities to modify the fleet's energy resources in an economic way by changing out the existing trucks or would you actually change the fleet consumption footprint over time by retiring legacy trucks?

Jim Fish:
No, that's a great question. That's a great question, Matt. We do have the ability to modify. It depends on the economics there. We were out looking at an electric vehicle company in the Bay area about two months ago, and they are hopeful that they can modify some of our vehicles. I would tell you, honestly, it's easier to just buy a new vehicle. It's probably cheaper to modify, almost certainly cheaper to modify it from a capital standpoint. From an operating cost standpoint, that's debatable because sometimes those modified vehicles don't necessarily operate at a lower operating cost. In fact, many times they do not. So we look at both solutions. For CNG, we're largely buying new trucks and it's been about six or seven years in the making that we've switched 100% diesel fleet over to now a 70% CG fleet, 30% diesel.

Caroline Grossman:
So Mike Adomo wants to talk about renewable natural gas and heard that you talked about collecting landfill gas, but also wondering if you're making any other investments in renewable natural gas. Would you produce it proactively?

Jim Fish:
So we are making pretty significant investments in these RNG plants and the RNG plants aren't cheap to build. So when we put an RNG plant on a big landfill that can be, depending on the size of the landfill, that can be 100, even north of $100 million for those plants. At this point, we have four of those, and that doesn't sound like a lot, but they are, as I said, expensive. So that's our primary focus in terms of renewable natural gas, because we have such a significant amount of gas being created. We have 265 landfills. And so you can imagine there's a significant amount of gas that is being created at those landfills, and only four renewable natural gas plants.

Now I don't think we'd put a renewable natural gas plant on every single landfill because some of those landfills are small, some of those landfills are strictly construction and demolition material, which is not decomposing the way a municipal solid waste landfill does. But the goal is to put those on the biggest landfills where we have the greatest amount of potential to capture gas.

Caroline Grossman:
So here I am going to link a couple of questions from Agni again and from Sarah about what we can do to reduce the need for the landfills. We know they'll always be trash that needs to go into landfills, but what are you doing to improve separation so less goes into landfill? Are you exploring composting and supporting that? And what are some landfill alternatives?

Jim Fish:
So there are a couple of alternatives here for landfilling. And I mentioned plastics and trying to find a solution for the low-value plastics that come into the landfills today. I mean, they don't decompose, or if they do, it takes 500 years. So nobody on this call will be around when plastic that goes into a landfill today eventually decomposes. And so, while I'm not worried about the constituents leaking out and getting into a groundwater contamination case, we're very, very diligent about that, so it's not about the pollutants, it's about saving natural resources. So if I take that plastic bag and put it in a landfill, then, in theory, more natural resources are consumed to create another natural or another plastic bag. So how do I take that plastic bag and do something, whether it's creating another plastic bag or a shingle or whatever it is, how do I preserve natural resources? And at the same time, then I'm reducing the amount of material that's going into the landfill. The first would be plastics. The second would be organic material. And we do have, we've built two, and coming up on three, facilities that are processing organic material.

The big challenge with organic material, particularly, and I'll talk about this in two terms, post-consumption organic material and pre-consumption. So pre-consumption might come from a grocery store and they have spoiled milk or whatever it is and it never gets sold. That's simpler to deal with, A, because it comes from a commercial grocery store and it comes in fairly large sums. Whereas post-consumption comes from cafeterias or it comes from schools or it comes from our homes and it gets mixed in and it's hard to separate, as you can imagine. So not to sound kinda gross here, but it is a dirty business. But post-consumption organic material largely ends up going into a landfill. There are a few places where we do collect it. Seattle would be one of those. There's a few on the west coast, San Francisco, so the Bay area.

But many, many places, in fact most places, do not have a separate collection route. So we're trying to figure out what's the best solution for that type of material. And we think that probably a not necessarily a composting solution because composting there's only so much compost that you can make. So we think there are some higher tech solutions for organic material. We're also trying to figure out a higher tech solution for collection. And you can imagine that collecting food waste in a truck is not a pleasant prospect. So trying to figure out how do we best collect that material and then process it at the same time.

Caroline Grossman:
Interesting. So I talked earlier about being the history of the disposable water bottle, and I think one of the trends that that illustrates is how much of the responsibility to use less, consume less, has been pushed to the consumer. But nonetheless, in the world in which we live it is just a part of our daily lives. So I might have my Rustandy Center mug here replacing a disposable coffee cup but I showed everyone my Lysol wipes earlier that have just become part of what's in my house.

And so you talked a lot about recycling and efforts to improve that, but as companies are thinking about ways to wean us off some of these single serve items, what role does that play for you? Do you work with some of the CPG manufacturers to try to reduce the world's reliance on this, on their efforts on that front? Or Isantrilia, a student here, wants to know whether there's a potential tension between your business model of managing waste and seeking to reduce waste overall?

Jim Fish:
That's a fantastic question. I would tell you the tension may not be so much from us but from the producers. One of the guests that we have speaking in two weeks at our forum again, is Indra Nooyi, and Indra is recently retired CEO of PepsiCo. And so Indra and I have have gotten to know each other over the years, and one of the things that she said to me a couple of years ago was, Jim, could you possibly, could Waste Management possibly recycle all of the Aquafina bottles, all of the Pepsi bottles, all of the Mountain Dew bottles? We'd love to be able to say

that we are 100% recyclable. And I said, look, I think we could find a solution for you. I think we could do that.

But here's the question, Indra, will you commit to a higher percentage of recycled content in those Mountain Dew bottles or in those Aquafina bottles? Because if I'm creating all of this additional supply, if you will, and there isn't any additional demand, then I know that all of these University of Chicago students know what happens to price. And so we've got to have a sufficient amount of demand on the back end to satisfy the supply that will be coming into our recycle plants.

If all of a sudden every single Aquafina water bottle and every single Pepsi bottle and every single Tide bottle ended up coming to a WM plant I think that would be fantastic, but there's one key, and that is that somebody has to buy the material out of the back end. And so that there is a bit of an internal, I guess, an internal struggle here at a company like PepsiCo because of the cost of virgin material is lower than the cost of recycled material for Pepsi. And that creates this kind of internal struggle as to whether I should be sustainable and instead of, and you might be surprised at how low that percentage is of recycled content, but should I be sustainable or should I be more focused on economics? I believe that you can be both, honestly. But for us, we're able to collect a lot of material but we've got to have demand on the back end. And that was my ask of her is, look, let's figure out how you can increase the amount of recycled content in those Pepsi bottles so that I can have an output for my recycle plants.

Caroline Grossman:
Makes a lot of sense. So another angle through which to explore reducing waste or meeting sustainability goals is on the regulatory front. And we all witnessed yesterday and there's a new government, well, new leadership in Washington, same government, and one of our students wants to know what your thoughts are on the role of regulatory oversight and how you think changes in Washington may affect regulations in this space?

Jim Fish:
Most of our business is regulated at the state level and the local level, largely at the state level, not so much at the federal level. And so we've been asked this question a lot. I'm sure I'll get asked that same question on our next earnings call. How will the Biden administration impact you versus the Trump administration? And the answer is gonna be similar to the one I'll give here, which is that in some places it will have an impact. So as we think about coal combustion residuals, I suspect and I believe Joe Biden's nominee to head up EPA comes from North Carolina. North Carolina is very strict on coal combustion residuals.

In case you're not aware of what those are, that's kind of the by-product that comes out of burning coal in a coal fire electric plant. And so we take that material and do something with it that we think is maybe a better environmental solution, and I think the state of North Carolina would agree is a better environmental solution than having the coal fire electric plant, just bury it in an unlined pit somewhere and have it ultimately leach into a river and inhabit some of those. There was one in Tennessee where a big berm burst and all of this material got into a river. So we have solutions for that. We also have beneficial use solutions.

So I think you could see on some of those waste issues such as coal combustion residuals, you could see the federal government weigh in through the EPA. But many of the regulatory bodies that impact us are state run. And so to the extent that a state changed from Democrat to Republican or Republican to Democrat, then we may see some changes there, but I think we end up paying as much attention to the states as we do to the feds. The feds have this overarching regulatory, I guess, umbrella. And that tends to be subtitle C and subtitle D and those were promulgated, I don't know, 40 years ago. They haven't changed those significantly over that 40-year period. I think it was 1978 that that came out. They haven't changed those significantly. There have been some federal regulations related to hazardous waste and the like. But most of municipal solid waste is regulated at the state level. And so therefore I don't expect a huge difference in this move from the Trump administration to the Biden administration.

Caroline Grossman:
Got it. So we only have time for a couple more questions, but on our last conversation when we talked about ESG environment, social and governance metrics, you talked about how the sustainability conversation often focuses on the E in ESG, environmental, but the governance is an equally important aspect of leadership. So what sort of leadership is Waste Management taking in governance and what more needs to be done by corporations nationwide?

Jim Fish:
I'll give you a couple of examples as we think about governance and we think about pay, for example, making sure, and there's a number of components to pay here, but making sure that everyone earns a living wage, making sure that we have equal pay for equal work and that we don't have any difference between particularly from a gender basis or an ethnic basis in terms of pay. I think it's also important as we think about governance that pay for performance makes up a bigger component of executive compensation. When we compare ourselves, we compare ourselves to about 20 other companies and largely within the transportation space, some of it in the industrial space. And in that, the board has a consultant, a compensation consultant that reports on that, and I'm proud to say that when they report to our board that we have a higher component of performance-based pay than just base pay.

My base pay it's a big number and it's public, but my base pay is, I'm not sure what the exact number is, but I think it's like $1.3 million is my base pay. And then a lot of my pay is performance-based pay. And it depends on how we do with free cash flow, how we do with compared to other companies in terms of total shareholder return. And there may be some changes to that even on the S side of that ESG, making sure that they were paying attention to the social aspect of how we manage our business. So I think performance, particularly for executives, is a very important part of that G as we think about governance. But also all of those things around board diversity is another one. Tenure. Should you have somebody on your board that's been there for 25, 30 years? Should you have tenure limitations? All of those are part of the G, and I think WM has done a pretty darn good job of monitoring that, but we still have room for improvement, I think.

Caroline Grossman:
So, Jim, you're the president and CEO of the largest waste management company in North America. What keeps you up at night?

Jim Fish:
I’ll tell you what's kept me up the last couple of nights. I'm doing an interview and I'd asked both Satya Nadella and Doug McMillan to do an interview with me. And I'm a little nervous about it. I know both guys, but that's been keeping me up a little bit at night recently. That interview is part of our sustainability forum.

But I think what's been keeping me up at night, for the most part, is what we talked about early on, and that is that, how do we truly use… Sustainability is such an opportunity. It is tailor-made for Waste Management to differentiate ourselves. Tailor-made. I mean, as you said, we're the biggest in North America and we have an opportunity to truly use that as a differentiator for us. So how do we find that? And I mentioned we've spent quite a bit of money looking for landfill alternatives. We're looking at how we really change how the way our recycle plants run. Those things keep me up at night not because I'm worried about them but because I think it's such a huge opportunity and I just wanna run before I walk, I guess. But right now I'm pleased with the progress we're making. I would just like to move a little faster, honestly.

Caroline Grossman:
Well, thank you so much for taking us through these questions. I think we could keep talking. And the good news is that we can. We've got you for a bit more time, but we're really trying to do something interactive with the format. It's been great to have the student questions come in on the chat thus far, but we wanna get even closer and have freer dialogue. So for Booth students in the audience… So what we're gonna do is end this Zoom in a minute. But for Booth students in the audience, we're starting the smaller, more intimate case study discussion with Jim and with his colleague, Tom Beaulieu, at 5:50 central time. That's in six minutes, probably five minutes from when we end the Zoom. So you have a moment to stretch, come back, ask the questions that you didn't get answered thus far, ask more questions and work through a case study and grapple with some of the tough questions that we discussed thus far in tonight's conversation.

If you're interested in joining the case study but haven't yet registered, please email Rose O'Brien. Rose.obrien@chicagobooth.edu. Or you can email me if you can't find her contact info, you can find mine, Caroline Grossman. And we'll just make sure you have an opportunity to join. We'll be watching our email for the next five minutes. So don't hesitate to email us if you're having trouble figuring out where to go from here. I'm looking forward to the case study as well.

So thank you so much, Jim. And I'll see you on the other Zoom in a minute. And thanks students.

Jim Fish:
Thank you very much. I really appreciate it.