Energy Transfer 2015 Annual Report Download - page 132

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, 2015, the compensation paid to our named executive officers, other than our Chief Executive Officer, 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(s);
• vesting of previously issued time-based awards issued pursuant to our equity incentive plan(s);
• compensation resulting from the vesting of equity issuances made by an affiliate; and
• 401(k) plan employer contributions.
Mr. Warren, our Chief Executive Officer, 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 employee premium contributions for health and welfare benefits).
Methodology
The ETP 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 of the general partner of ETE (the “ETE Compensation Committee”) or the ETP Compensation Committee
engages a third-party consultant to provide market information for compensation levels at peer companies in order to assist in the determination of
compensation levels for our executives, including the named executive officers. In 2015, Longnecker & Associates (“Longnecker”) evaluated the market
competitiveness of total compensation levels of a number of executives of ETE, ETP and Sunoco Logistics to provide market information with respect to
compensation of those executives. In particular, the review by Longnecker was designed to (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) confirm that our compensation programs were yielding compensation packages
consistent with our overall compensation philosophy. This review by Longnecker was deemed necessary to update the most recent review by Mercer (US)
Inc. during 2013, especially in light of the on-going growth of the family of partnerships as a result of the series of transforming transactions we have
completed over the past few years, which have continued to significantly increase our size and scale from both a financial and asset perspective.
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