In October 2020, our Board of Directors amended and restated the Republic Services, Inc. Executive Incentive Plan (the 2021 Plan) to remove references to the performance-based compensation exception that was previously permitted but is no longer applicable under Section 162(m) of the Code. The purposes of the 2021 Plan are to promote the success of the Company; to provide designated Executive Officers with an opportunity to receive incentive compensation dependent upon that success; and to attract, retain and motivate such individuals. We currently have 12.0 million shares of common stock reserved for future grants under the 2021 Plan.

In February 2007, our Board of Directors approved the 2007 Stock Incentive Plan (the 2007 Plan); in May 2007 our shareholders approved the 2007 Plan. In March 2011, our Board of Directors approved the Amended and Restated 2007 Stock Incentive Plan (the Amended and Restated 2007 SIP); in May 2011 our shareholders approved the Amended and Restated 2007 SIP. In March 2013, our Board of Directors approved the Republic Services, Inc. Amended and Restated 2007 Stock Incentive Plan (the Republic Amended and Restated 2007 SIP); in May 2013 our shareholders approved the Republic Amended and Restated 2007 SIP (the 2007 Plan, the Amended and Restated 2007 SIP and the Republic Amended and Restated 2007 SIP are collectively referred to as the Amended and Restated 2007 Stock Incentive Plan). No further awards will be made under the Amended and Restated 2007 Stock Incentive Plan.

The following table summarizes restricted stock unit (RSU) activity for the years ended December 31, 2022, 2021 and 2020:


	Number of RSUs (in thousands)	Weighted-Average Grant Date Fair Value per Share		Weighted-Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in millions)
Unissued as of December 31, 2019	1,499.5	$	57.63
Granted	314.9	$	95.75
Vested and issued	(538.2)	$	50.63
Forfeited	(64.1)	$	79.77
Unissued as of December 31, 2020	1,212.1	$	69.47
Granted	358.0	$	91.21
Vested and issued	(434.5)	$	74.69
Forfeited	(44.8)	$	87.43
Unissued as of December 31, 2021	1,090.8	$	77.19
Granted	258.8	$	122.54
Vested and issued	(388.4)	$	74.34
Forfeited	(47.5)	$	110.92
Unissued as of December 31, 2022	913.7	$	85.43	0.7	$	117.9
Vested and unissued as of December 31, 2022	407.4	$	59.45

During the years ended December 31, 2022, 2021 and 2020, compensation expense related to RSUs totaled $22.8 million, $32.5 million and $26.2 million, respectively. In 2021, we recognized approximately $6 million of compensation expense related to the accelerated vesting of RSUs previously granted to Donald W. Slager that were previously scheduled to vest in 2022 and beyond as a result of his retirement as Chief Executive Officer (CEO) of Republic Services, Inc. in June 2021. As of December 31, 2022, total unrecognized compensation expense related to outstanding RSUs was $34.4 million, which will be recognized over a weighted average period of 2.6 years.

The following table summarizes performance stock unit (PSU) activity for the years ended December 31, 2022, 2021 and 2020:


	Number of PSUs (in thousands)	Weighted Average Grant Date Fair Value per Share
Outstanding as of December 31, 2019	919.2	$	65.92
Granted	247.0	$	98.01
Vested and issued	(285.0)	$	61.22
Forfeited	(27.6)	$	88.29
Outstanding as of December 31, 2020	853.6	$	76.14
Granted	313.1	$	91.01
Vested and issued	(287.0)	$	65.35
Forfeited	(22.4)	$	91.20
Outstanding as of December 31, 2021	857.3	$	84.79
Granted	156.6	$	124.29
Vested and issued	(233.4)	$	76.24
Forfeited	(24.3)	$	109.62
Outstanding and Exercisable as of December 31, 2022	756.2	$	95.19

During the years ended December 31, 2022, 2021 and 2020, we awarded 79,043, 181,322 and 127,278 PSUs to our executive officers, respectively. These awards are performance-based as the number of shares ultimately earned depends on performance against pre-determined targets for return on invested capital (ROIC), cash flow value creation (CFVC) and total shareholder return relative to the S&P 500 index (RTSR). The PSUs are payable 50% in shares of common stock and 50% in cash after the end of a three-year performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from 0% to 150% of the targeted amount, depending on the performance against the pre-determined targets.

During the years ended December 31, 2022, 2021 and 2020, we awarded 66,296, 118,168 and 102,994 PSUs to our employees other than our executive officers, respectively. The PSUs are payable 100% in shares of common stock after the end of a three-year performance period, when our financial performance for the entire performance period is reported, typically in February of the succeeding year. At the end of the performance period, the number of PSUs awarded can range from 0% to 150% of the targeted amount, depending on the performance against the pre-determined targets.

For the stock-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is measured using the fair value of our common stock at the grant date. For the cash-settled portion of the award that vests based on future ROIC and CFVC performance, compensation expense is recorded based on the fair value of our common stock at the end of each reporting period. Compensation expense is recognized ratably over the performance period based on our estimated achievement of the established performance criteria. Compensation expense is only recognized for the portion of the award that we expect to vest, which we estimate based on an assessment of the probability that the performance criteria will be achieved.

For the stock-settled portion of the award that vests based on RTSR, the grant date fair value is based on a Monte Carlo valuation and compensation expense is recognized on a straight-line basis over the vesting period. For the cash-settled portion of the award that vests based on RTSR, compensation expense also incorporates the fair value of our PSUs at the end of each reporting period. Compensation expense is recognized for the RTSR portion of the award whether or not the market conditions are achieved.

During the years ended December 31, 2022, 2021 and 2020, compensation expense related to PSUs totaled $22.1 million, $47.1 million and $17.2 million, respectively. In 2021, we recognized approximately $16 million of compensation expense related to the accelerated vesting of PSUs previously granted to Mr. Slager that were previously scheduled to vest in 2022 and beyond as a result of his retirement in June 2021. As of December 31, 2022, total unrecognized compensation expense related to outstanding PSUs was $22.9 million, which will be recognized over a weighted average period of approximately 1 year.

The Plan benefits are frozen. Interest credits continue to be earned by participants in the Plan, and participants whose collective bargaining agreements provide for additional benefit accruals under the Plan continue to receive those credits in accordance with the terms of their bargaining agreements. The Plan was converted from a traditional defined benefit plan to a cash balance plan in 1993.

Prior to the conversion to the cash balance design, benefits payable as a single life annuity under the Plan were based on the participant’s highest five years of earnings out of the last ten years of service. Upon conversion to the cash balance plan, the existing accrued benefits were converted to a lump-sum value using the actuarial assumptions in effect at the time. Participants’ cash balance accounts are increased until retirement by certain benefit and interest credits under the terms of their bargaining agreements. Participants may elect early retirement with the attainment of age 55 and completion of ten years of credited service at reduced benefits. Participants with 35 years of service may retire at age 62 without any reduction in benefits.

We must separately recognize the overfunded or underfunded status of the Plan as an asset or liability. The funded status represents the difference between the projected benefit obligation (PBO) and the fair value of the Plan assets. The PBO is equal to the accumulated benefit obligation (ABO) as the Plan is frozen and the present value of liabilities is not affected by future salary increases. We use a measurement date that coincides with our year end of December 31.

The following table presents the ABO and reconciliations of the changes in the PBO, the Plan assets and the accounting funded status of our defined benefit pension plan for the years ended December 31:


	Defined Benefit Pension Plan
	2022			2021
Accumulated benefit obligation	$	172.3		$	215.1
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	215.1		$	219.2
Interest cost	5.7			4.7
Actuarial (gain) loss	(32.6)			6.7
Benefits paid	(15.9)			(15.5)
Projected benefit obligation at end of year	$	172.3		$	215.1
Change in plan assets:
Fair value of plan assets at beginning of year	$	221.8		$	232.5
Actual return on plan assets	(26.3)			6.3
Estimated expenses	(1.4)			(1.5)
Benefits paid	(15.9)			(15.5)
Fair value of plan assets at end of year	$	178.2		$	221.8
Over funded status	$	5.9		$	6.7
Amounts recognized in the statement of financial position consist of:
Noncurrent assets	$	5.9		$	6.7
Net amount recognized	$	5.9		$	6.7
Weighted average assumptions used to determine benefit obligations:
Discount rate	5.13		%	2.77		%
Rate of compensation increase	N/A			N/A

The components of the net periodic benefit income for the years ended December 31 are summarized below:


	2022			2021			2020
Components of net periodic benefit income:
Interest cost	$	5.7		$	4.7		$	6.4
Expected return on plan assets	(7.0)			(6.0)			(8.0)
Recognized net actuarial gain	—			—			(0.1)
Amortization of prior service cost	—			—			0.1
Net periodic benefit income	$	(1.3)		$	(1.3)		$	(1.6)
Weighted average assumptions used to determine net periodic benefit income:
Discount rate	5.13		%	2.77		%	2.24		%
Expected return on plan assets	5.40		%	4.10		%	3.45		%
Rate of compensation increase	N/A			N/A			N/A

We determine the discount rate used in the measurement of our obligations based on a model that matches the timing and amount of expected benefit payments to maturities of high quality bonds priced as of the Plan measurement date. When that timing does not correspond to a published high-quality bond rate, our model uses an expected yield curve to determine an appropriate current discount rate. The yields on the bonds are used to derive a discount rate for the liability. The term of our obligation, based on the expected retirement dates of our workforce, is approximately six years.

In developing our expected rate of return assumption, we have evaluated the actual historical performance and long-term return projections of the Plan assets, which give consideration to the asset mix and the anticipated timing of the Plan outflows. We primarily utilize fixed income investments to minimize the volatility of the difference between the market value of the Plan assets and the present value of the obligation. Risk tolerance is established through careful consideration of Plan liabilities, Plan funded status and our financial condition. Derivatives may be used to gain market exposure in an efficient and timely manner; however, derivatives may not be used to leverage the portfolio beyond the market value of the underlying investments. Investment risk is measured and monitored on an ongoing basis through annual liability measurements, periodic asset and liability studies and quarterly investment portfolio reviews.

The following table summarizes our target asset allocation as of December 31, 2022 and the actual asset allocation as of December 31, 2022 and 2021 for our Plan:


	December 31, 2022		December 31, 2022		December 31, 2021
	Target Asset Allocation		Actual Asset Allocation		Actual Asset Allocation
Debt securities	100	%	100	%	82	%
Equity securities	—		—		18

Total	100	%	100	%	100	%

Asset allocations are reviewed and rebalanced periodically based on funded status. For 2023, the investment strategy for Plan assets is to maintain a portfolio designed to achieve our target of an average long-term rate of return of 5.40%. While we believe we can achieve a long-term average return of 5.40%, we cannot be certain that the portfolio will perform to our expectations. Assets are strategically allocated among fixed income and cash portfolios to achieve a diversification level that reduces fluctuations in investment returns. Asset allocation target ranges and strategies are reviewed periodically with the assistance of an independent external consulting firm.

The Plan assets are measured at fair value. The following table summarizes, by level, within the fair value hierarchy, the investments of the Plan at fair value as of December 31, 2022 and 2021:


			Fair Value Measurements Using
	December 31, 2022		Quoted Prices in Active Markets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Money market accounts and U.S. government securities	$	23.6	$	23.6	$	—	$	—

Fixed income securities	154.6		—		154.6		—


Total assets	$	178.2	$	23.6	$	154.6	$	—

We participate in multiemployer pension plans that generally provide retirement benefits to participants of contributing employers. We do not administer these plans. In general, these plans are managed by a board of trustees with the unions appointing certain trustees and other contributing employers of the plan appointing certain members. We generally are not represented on the board of trustees.

Based on the information available to us, we believe that some of the multiemployer plans to which we contribute are either critical or endangered as those terms are defined in the Pension Protection Act (PPA). The PPA requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. Until the plan trustees develop the funding improvement plans or rehabilitation plans as required by the PPA, we cannot determine the amount of any additional contribution or other financial obligations that we may be subject to, if any. Accordingly, we cannot presently determine the effect that the PPA may have on our consolidated financial position, results of operations or cash flows.

Furthermore, under current law regarding multiemployer benefit plans, a plan’s termination, our voluntary withdrawal (which we consider from time to time), or the mass withdrawal from any under-funded multiemployer pension plan would require us to make payments to the plan for our proportionate share of the multiemployer plan’s unfunded vested liabilities. During the course of operating our business, we may incur withdrawal events regarding certain of the multiemployer pension plans in which we participate. We accrue for such events when losses become probable and reasonably estimable.

Republic’s participation in individually significant multiemployer pension plans for the year ended December 31, 2022 is outlined in the table below. Only with respect to multiemployer pension plans, we considered contributions in excess of $3.5 million in any period disclosed to be individually significant. The most recent PPA zone status available in 2022 and 2021 is for the plans’ year ended September 30, or December 31, 2021 and 2020, respectively. The status is based on information that Republic received from the plans and is certified by the plans’ actuary. Among other factors, plans in the critical red zone are generally less than 65% funded, plans in the endangered yellow zone are less than 80% funded and plans in the safe green zone are at least 80% funded. Plans in the critical and declining zone are classified as critical and projected to be insolvent in the current year or any of the 14 following plan years. The last column lists the expiration dates of the CBAs to which the plans are subject.


		Pension Protection Act Zone Status		Funding Improvement or Rehabilitation Plan Status Pending /	Republic Contributions to Plan						Surcharge	Expiration Dates
Legal Plan Name	EIN	2021	2020	Implemented	2022		2021		2020		Imposed	of CBAs
Western Conference of Teamsters Pension Plan	91-6145047	Safe	Safe	No	$	61.2	$	52.2	$	49.4	No	Various dates through 6/30/27
Local No. 731 I.B. of T., Pension Fund	36-6513567	Safe	Safe	No	8.1		8.7		8.8		No	Various dates through 1/31/24
Individually significant plans					69.3		60.9		58.2
All other plans	N/A	N/A	N/A	N/A	16.8		15.5		15.0		N/A
Total					$	86.1	$	76.4	$	73.2

We maintain the Republic Services 401(k) Plan (the 401(k) Plan), which is a defined contribution plan covering all eligible employees. Under the 401(k) Plan, participants may direct us to defer a portion of their compensation to the 401(k) Plan, subject to Internal Revenue Code limitations. We provide for an employer matching contribution equal to 100% of the first 3.0% of eligible compensation and 50.0% of the next 2.0% of eligible compensation contributed by each employee, which is funded in cash. All contributions vest immediately.

We provide eligible Republic employees, officers and directors with the opportunity to voluntarily defer base salary, bonus payments, long-term incentive awards and other compensation, as applicable, on a pre-tax basis through the Republic Services, Inc. Deferred Compensation Plan (the DCP). The DCP is a nonqualified deferred compensation plan that conforms to Section 409A of the Internal Revenue Code. Eligible participants can defer up to 80% of base salary and up to 100% of bonus, long-term compensation and directors’ fees. Under the DCP, some participants also are eligible for matching contributions. The matching contribution under the DCP is equal to the lesser of 2% of the participant’s compensation over established 401(k) limits or 50% of the amount the participant has deferred. The DCP participants have no ownership or security interest in any of the amounts deferred or the measurement funds under the DCP. The right of each participant in the DCP is solely that of a general, unsecured creditor of Republic with respect to his or her own interest under the DCP. Deferred amounts may be subject to forfeiture and are deemed invested among investment funds offered under the DCP, as directed by each participant. Payments of deferred amounts are payable following separation from service or at a date or dates elected by the participant when the deferral is elected. Payments of deferred amounts are made in either a lump sum or in annual installments over a period not exceeding 15 years.

Republic invested in corporate-owned life insurance policies to satisfy future obligations under the DCP. These corporate-owned life insurance policies are held in a Rabbi Trust and are recorded at the amount that can be realized under insurance contracts at the balance sheet date, which is the cash surrender value adjusted for other charges or other amounts due that are probable at settlement. The aggregate cash surrender value of these life insurance policies was $100.6 million and $133.5 million as of December 31, 2022 and 2021, respectively, and is classified in other assets in our consolidated balance

Republic employees are eligible to participate in an employee stock purchase plan. The plan allows participants to purchase our common stock for 95% of its quoted market price on the last day of each calendar quarter. For the years ended December 31, 2022, 2021 and 2020, issuances under this plan totaled 99,680 shares, 104,217 shares and 116,865 shares, respectively. As of December 31, 2022, shares reserved for issuance to employees under this plan totaled 2.5 million and Republic held employee contributions of $2.9 million for the purchase of common stock.