Energy Transfer 2013 Annual Report Download - page 125

Table of Contents
•attract, retain and reward talented executive officers and key management employees by providing total compensation competitive with that of other
executive officers and key management employees employed by publicly traded limited partnerships of similar size and in similar lines of business;
•motivate executive officers and key employees to achieve strong financial and operational performance;
•emphasize performance-based or “at-risk” compensation; and
•reward individual performance.
Components of Executive Compensation
For the year ended December 31, 2013, the compensation paid to our named executive officers, other than our CEO, consisted of the following components:
•annual base salary;
•non-equity incentive plan compensation consisting solely of discretionary cash bonuses;
•time-vested restricted unit awards under the equity incentive plan(s);
•payment of distribution equivalent rights (“DERs”) on unvested time-based restricted unit awards under our equity incentive plan;
•vesting of previously issued time-based awards issued pursuant to our equity incentive plans;
•compensation resulting from the vesting of equity issuances made by an affiliate; and
•401(k) plan employer contributions.
Mr. Warren, our CEO, has voluntarily elected not to accept any salary, bonus or equity incentive compensation (other than a salary of $1.00 per year plus an
amount sufficient to cover his allocated payroll deductions for health and welfare benefits).
Methodology
The Compensation Committee considers relevant data available to it to assess our competitive position with respect to base salary, annual short-term incentives
and long-term incentive compensation for our executive officers. The Compensation Committee also considers individual performance, levels of responsibility,
skills and experience.
Periodically, the Compensation Committee engages a third-party consultant to provide market information for compensation levels at peer companies in order
to assist the Compensation Committee in its determination of compensation levels for our executive officers. Most recently, the Compensation Committee
engaged Mercer (US) Inc. (“Mercer”) during the year ended December 31, 2013 to both (i) evaluate the market competitiveness of total compensation levels for
certain members of senior management, including our named executive officers; (ii) assist in the determination of appropriate compensation levels for our
senior management, including the named executive officers; and (iii) to confirm that our compensation programs were yielding compensation packages
consistent with our overall compensation philosophy. This review by Mercer was deemed necessary given the series of transforming transactions we have
completed over the past few years, which have significantly increased our size and scale from both a financial and asset perspective.
In conducting its review, Mercer worked with us to identify a “peer group” of 15 leading companies in the energy industry that most closely reflect our profile
in terms of revenues, assets and market value as well as compete with us for talent at the senior management level. The identified companies were:
• Conoco Phillips
• Anadarko Petroleum
• Enterprise Products Partners, L.P.
• ONEOK Partners, L.P.
• Plains All American Pipeline, L.P.
• EOG Resources, Inc.
• Halliburton Company
• Kinder Morgan Energy Partners, L.P.
• National Oilwell Varco, Inc.
• The Williams Companies, Inc.
• Baker Hughes Incorporated
• Enbridge Energy Partners, L.P.
• Apache Corp.
• DCP Midstream Partners, L.P.
• Marathon Oil Corporation
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