SEPARATION AGREEMENT

EXHIBIT 10.1

SEPARATION AGREEMENT

THIS SEPARATION AGREEMENT (“Agreement”) is entered into on this 25th day of July, 2012 between Waste Management, Inc. (the “Company”) and Grace Cowan (the “Executive”).

This Agreement is binding upon, and extends to, the parties and their past and present officers, directors, employees, shareholders, parent corporations, subsidiaries, affiliates, partners, agents, representatives, heirs, executors, assigns, administrators, successors, predecessors, family members, d/b/a’s, assumed names, and insurers, whether specifically mentioned hereafter or not. A reference to a party in this Agreement necessarily includes those persons and/or entities described in the foregoing sentence.

PREAMBLE

WHEREAS, the Company and Executive previously entered into that certain Employment Agreement in February 2011 (the “Employment Agreement”);

WHEREAS, pursuant to such Employment Agreement, Executive has been continuously employed by the Company;

WHEREAS, the Company has notified Executive that her employment is being terminated pursuant to Section 5(e) of said Employment Agreement, effective August 31, 2012;

WHEREAS, the Employment Agreement states that upon a termination pursuant to Section 5(e), Executive will receive certain severance benefits described in Section 6(e) upon her execution of a waiver and release of claims;

WHEREAS, the Company and Executive now jointly desire to enter into this Agreement to supplement the continuing provisions of said Employment Agreement as set forth below; and

NOW, THEREFORE, in consideration of the premises and agreements contained herein, and for other good and valuable consideration, the Company and Executive hereby agree as follows:

1. Termination of Employment. The employment of Executive is terminated, effective August 31, 2012 (“Employment Termination Date”). The parties agree that Executive’s employment is being terminated pursuant to Section 5(e) of the Employment Agreement.

Executive is entitled to the certain compensation and benefits set forth in Section 6(e) (i) and (ii) of the Employment Agreement without her execution of a release, as more specifically detailed in Exhibit A to this Agreement. It is expressly agreed to and acknowledged by the parties that Executive is entitled to the compensation and benefits set forth in Exhibit A whether or not she executes this Agreement.

2. Payment of Additional Consideration. In consideration of the premises and promises herein contained, and subject to Executive executing and not revoking this Agreement, it is agreed that the Company will provide Executive those certain benefits specifically detailed in Exhibit B to this Agreement. The benefits set forth in Exhibit B include those that Executive will receive under Section 6(e) (iii) (iv) and (v) of the Employment Agreement and an additional separation bonus upon the execution of a waiver and release of claims. It is expressly agreed to and acknowledged by the parties that Executive is not entitled to the benefits set forth in Exhibit B until such time as she executes and does not revoke this Agreement. The Company shall withhold, or cause to be withheld, from said payments all amounts required to be withheld pursuant to federal, state or local tax laws.

The consideration set forth in this Paragraph 2 is in full, final and complete settlement of any and all claims which Executive could make in any complaint, charge, or civil action, whether for actual, nominal, compensatory, or punitive damages (including attorneys’ fees). Executive acknowledges that such consideration is being made as consideration for the releases set forth in Paragraphs 4 and 5. Executive further acknowledges that the consideration set forth in this Paragraph 2 are separate and distinct of and from each other, and that either payment is independent valuable consideration for the release and waiver set forth in Paragraphs 4 and 5.

3. Post-Notification Employment With The Company. From now until Executive’s August 31, 2012 termination, the Company shall continue to employee Executive, and Executive shall continue to be employed by the Company upon the terms and subject to the conditions set forth in this Agreement. The period of Executive’s continued employment with the Company under this Agreement shall commence immediately and shall continue until August 31, 2012 (“Continued Employment Period”). During the Continued Employment Period, Executive shall perform such duties and have such responsibilities as may be assigned to her from time to time by the Company’s Chief Executive Officer. It is expressly agreed that Executive’s duties and responsibilities during such Continued Employment Period shall be limited to providing advice and consulting support on the Company’s Customer Experience projects as requested. Executive will not be expected to manage the day-to-day activities of the Customer Experience Department. Executive is not required to be present at the Company’s offices unless specifically requested. The Company will reimburse Executive for all reasonable pre-approved out-of-pocket business expenses incurred by Executive in accordance with the Company’s customary practices and policies.

4. General Release. In exchange for the first payment made to Executive pursuant to Paragraph 2, Executive releases and discharges Waste Management, its past and present parent, subsidiary and affiliated companies, agents, directors, officers, employees, and representatives, and all persons acting by, through, under or in concert with Waste Management (collectively referred to as the “Released Parties”), from any and all causes of action, claims, liabilities, obligations, promises, agreements, controversies, damages, and expenses, known or unknown, which Executive ever had, or now has, against the Released Parties to the date of this Agreement. The claims Executive releases include, but are not limited to, claims that the Released Parties:

2

Executive is not prohibited from making or asserting (a) any claim or right under state workers’ compensation or unemployment laws, or (b) any claim or right which by law cannot be waived. Executive waives, however, the right to recover money if any federal, state or local government agency pursues a claim on Executive’s behalf or on behalf of a class to which Executive may belong that arises out of or relates to Executive’s employment or termination of employment.

For the purpose of giving a full and complete release, Executive covenants and agrees that she has no pending claims or charges against the Release Parties, and if she does so have, Executive agrees to promptly file all appropriate papers requesting withdrawal and dismissal of such claims and for charges. Executive understands and agrees that this Agreement includes all claims that Executive may have and that Executive does not now know or suspect to exist in Executive’s favor against the Released Parties, and that this Agreement extinguishes those claims.

3

Nothing in this Agreement shall affect the U.S. Equal Employment Opportunity Commission’s (“EEOC”) rights and responsibilities to enforce the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, or any other applicable law. Further, nothing in this Agreement shall be construed as a basis for interfering with Executive’s protected right to challenge the waiver of an ADEA claim under the Older Workers Benefit Protection Act, or to file a charge with, or participate in an investigation or proceeding conducted by, the EEOC, or any other state, federal or local government entity; provided, however, if the EEOC or any other state, federal or local government entity commences an investigation on Executive’s behalf, Executive specifically waives and releases her right, if any, to recover any monetary or other benefits of any sort whatsoever arising from any such investigation, nor will she seek reinstatement to her former position with the Company. Nothing in this Agreement shall be construed to waive a claim or right that cannot be lawfully waived through private agreement.

Executive is not being asked to release any claims or rights under ADEA that may arise after Executive executes this Agreement. However, any claims surrounding the Company’s decision to end Executive’s employment are specifically released and waived under the terms of this Agreement.

5. Covenant Not to Sue. Executive agrees not to sue any of the Released Parties or become a party to a lawsuit on the basis of any claims of any type to date that arise out of any aspect of Executive’s employment or termination of employment. Executive understands that this is an affirmative promise by Executive not to sue any of the Released Parties, which is in addition to Executive’s general release and waiver of claims in Paragraphs 3 and 4. However, nothing in this Agreement prevents Executive from bringing an action challenging the validity of this Agreement. If Executive breaches this Agreement by suing any of the Released Parties in violation of this Covenant Not to Sue, Executive understands that (i) the Released Parties will be entitled to apply for and receive an injunction to restrain any violation of this paragraph, and (ii) Executive will be required to pay the Released Parties’ legal costs and expenses, including reasonable attorney fees, associated with defending against the lawsuit and enforcing the terms of this Agreement.

6. Application to all Forms of Relief. This Agreement applies to any relief no matter how called, including without limitation, wages, back pay, front pay, reinstatement, compensatory damages, liquidated damages, punitive damages for pain or suffering, costs and attorney’s fees and expenses.

7. No Admissions, Complaints or Other Claims. The Executive acknowledges and agrees that this Agreement is not to be construed in any way as an admission of any liability whatsoever by any Released Party, any such liability being expressly denied. The Executive also acknowledges and agrees that she has not, with respect to any transaction or state of facts existing prior to the date hereof, filed any Actions against any Released Party with any governmental agency, court or tribunal.

4

8. Acknowledgments. Executive has fully reviewed the terms of this Agreement, acknowledges that she understands its terms, and states that she is entering into this Agreement knowingly, voluntarily, and in full settlement of all claims which existed in the past or which currently exist, that arise out of her employment with Waste Management or the termination of her employment.

Executive acknowledges that she has had at least forty-five (45) days to consider this General Release Agreement thoroughly, and Executive understands that she has the right to consult with an attorney, before she signs below and is advised to do so.

If Executive signs and returns this General Release Agreement before the end of the 45-day period, she certifies that her acceptance of a shortened time period is knowing and voluntary, and the Company did not — through fraud, misrepresentation, a threat to withdraw or alter the offer before the 45-day period expires, or by providing different terms to other employees who sign the release before such time period expires — improperly encourage Executive to sign.

Executive understands that she may revoke this General Release Agreement within seven (7) days after she signs it. Executive’s revocation must be in writing and submitted within the seven (7) day period to Mark Schwartz, via hand delivery or via electronic delivery at: ***@***. If Executive does not revoke this General Release Agreement within the seven (7) day period, it becomes irrevocable. Executive further understands that if she revokes this General Release Agreement, she will not be eligible to receive the benefits described in Exhibit B. All benefits described in Exhibit B will be processed as soon as administratively possible after the end of this seven (7) day period.

Executive agrees and accepts that the termination of her employment giving rise to her eligibility for benefits described above will not be construed to provide or trigger any enhanced benefits under any equity-based compensation awards previously granted to her, including, but not limited to, stock option awards, restricted stock awards, restricted stock unit awards and/or performance share unit awards. Such forms of enhanced benefits include, without limitation, vesting beyond the date of termination of employment and/or an extended period in which to exercise equity-based awards resulting from a termination of employment by reason of retirement or resignation, as such terms are contemplated with respect to each such award. Executive further agrees and accepts that the terms and conditions of each equity-based incentive award shall govern those awards, not withstanding any other representation, whether written or oral, to the contrary.

9. Settlement and Acquisition of Goodwill. Executive waives and releases any and all claims that the restrictive covenants contained in Paragraph 10 of the Employment Agreement (the “Employment Agreement Restrictive Covenants”) are not enforceable or are against public policy. Executive covenants not to file a lawsuit or arbitration proceeding, pursue declaratory relief, or otherwise take any legal action to challenge the enforceability of the Employment Agreement Restrictive Covenants. The parties agree that the promise of continued employment and the compensation and benefits associated with same referred to in Exhibit B are, in part, consideration of the settlement of all disputes regarding the enforceability and application of goodwill, trade secrets, and confidential information developed by Executive in the course of her employment with the Company. To help preserve the value of the goodwill, trade secrets, and

5

confidential information acquired herewith, it is agreed that Executive will comply with the Employment Agreement Restrictive Covenants (incorporated herein by reference) for the periods of time set forth therein. It is specifically agreed that the two-year Restricted Term set forth in Paragraph 10 of the Employment Agreement and the restriction provided for therein shall commence upon Executive’s termination of employment with the Company. In the event that the Company, in its sole discretion, determines that Executive has engaged in activities that violate the Employment Agreement Restrictive Covenants, the Company shall have the right to discontinue and terminate Executive’s employment. Such Termination of employment shall be in addition to and shall not limit injunctive relief and/or any and all other rights and remedies that the Company may have against Executive under the Employment Agreement or this Agreement.

10. Assistance and Cooperation. Executive agrees that she will cooperate fully with the Company and its counsel, upon their request, with respect to any proceeding (including any litigation, arbitration, regulatory proceeding, investigation or governmental action) that relates to matters with which Executive was involved while she was an employee of the Company or with which she has knowledge. Executive agrees to render such cooperation in a timely fashion and to provide Company personnel and the company’s counsel with the full benefit of her knowledge with respect to any such matter. The Company shall reimburse Executive for actual and reasonable costs and expenses, including reasonable attorney’s fees, related to her assistance in such matters. Executive will remain an elected officer of the Company until the Employment Termination Date. Accordingly, Executive will be entitled to benefit of the indemnity and expense reimbursement provisions in Article Eighth of the Company’s Third Amended and Restated Certification of Incorporation and Article X of the Company’s Bylaws, all subject to the provisions thereof and to applicable Delaware law.

11. Choice of Laws. This Agreement is made and entered into in the State of Texas, and shall in all respects be interpreted, enforced and governed under the laws of the State of Texas. The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties.

12. Severability. Should any provision of this Agreement be declared or be determined by any court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term, or provision shall be deemed not to be a part of this Agreement.

13. Complete Agreement. The parties hereto agree that the February 2011 Employment Agreement (including any other amendments thereto) as modified by this Agreement, contains the full and final expression of their agreements with respect to the matters contained therein, and acknowledge that no other promises have been made to or by any of the parties that are not set forth in these Agreements.

The parties agree that neither the offer of, nor the execution of, this Agreement will be construed as an admission of wrongdoing by anyone. Instead, this Agreement is to be construed solely as a reflection of the parties’ desire to facilitate a peaceful separation of employment and to make sure there are no unresolved issued between them.

6

IN WITNESS WHEREOF, this Agreement is EXECUTED and EFFECTIVE as of the day set forth above.

7

EXHIBIT A

The employment of Executive is terminated, effective August 31, 2012 (the “Employment Termination Date”). Executive is therefore, entitled to the payments and benefits listed below and detailed in under Section 6(e) (i) and (ii) of the Employment Agreement whether or not she signs this Agreement.

All applicable withholdings will be deducted from payments described herein.

Executive is entitled to the benefits described above in this Exhibit A whether or not she executes this Separation Agreement.

8

EXHIBIT B

The employment of Executive is terminated, effective August 31, 2012 (the “Employment Termination Date”). As Executive’s employment is being terminated pursuant to Section 5(e) of the Employment Agreement, Executive is entitled to certain compensation and benefits set forth in Section 6(e) (iii) (iv) and (v) of the Employment Agreement only after she executes and does not revoke this Separation Agreement.

In consideration of the premises and promises herein contained, it is agreed that the Company will provide Executive the following benefits if she executes this Agreement and does not revoke it. The payments and benefits to be provided are as follows:

All Applicable withholdings will be deducted from all payments described herein.

9

EXHIBIT C

Executive’s employment as the Company’s Senior Vice President, Customer Experience is being terminated effective August 31, 2012. As a result, Executive is being offered certain consideration as described in Executive’s Employment Agreement, plus an additional separation bonus, in exchange for executing and not revoking the general release contained in this Agreement. There are no similarly situated employees to Executive; her duties and responsibilities will be distributed to others.

Although there is no comparable position to Executive’s, as she reports directly to the Chief Executive Officer of the Company, below is a chart showing the other positions reporting directly to the Chief Executive Officer, annotated by age and whether they are separating and will be offered consideration in exchange for a release (“Selected”) or there are no current plans to separate to their employment (“Not Selected”). The chart was prepared as of July 25, 2012.

This data is subject to change, and may be affected by future employment decisions. If you have any questions about this information, contact Mark Schwartz at (713)  ###-###-####.

10