Energy Transfer 2015 Annual Report Download - page 133

Table of Contents
In conducting its review, Longnecker specifically considered the larger size of the combined ETE and ETP entities from an energy industry perspective, to
form a public peer group, inclusive of energy and non-energy related peers, against which ETE and ETP can compare total compensation for its executives,
including the named executive officers. We worked with Longnecker in the development of the final “peer group” of 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
and similarly situated general industry companies with similar revenues, assets and market value. The identified companies were:
Energy Peer Group:
• Conoco Phillips
• Anadarko Petroleum
• Enterprise Products Partners, L.P.
• Marathon Oil Corporation
• Plains All American Pipeline, L.P.
• Kinder Morgan Energy Partners, L.P.
• Halliburton Company
• The Williams Companies, Inc.
• Valero Energy Corporation
General Industry Peer Group:
• The Boeing Company
• United Technologies Corporation
• Dow Chemical Company
• United Parcel Service, Inc.
• Caterpillar Inc.
• FedEx Corporation
• Lockheed Martin Corporation
• Honeywell International Inc.
• Deere & Company
The compensation analysis provided by Longnecker covered all major components of total compensation, including annual base salary, annual short-term
cash bonus and long-term incentive awards for the senior executives of these companies. In preparing the review materials, Longnecker utilized generally
accepted compensation principles as determined by WorldatWork and gathered data from the public peer companies and published salary surveys.
The ETP Compensation Committee reviewed the information provided by Longnecker, including Longnecker’s specific conclusions and recommended
considerations for all compensation going forward, but focused specifically on the industry related data to compare the levels of annual base salary, annual
short-term cash bonus and long-term equity incentive awards at these other companies with those of our named executive officers to ensure that
compensation of our named executive officers is both consistent with our compensation philosophy and competitive with the compensation for executive
officers of these other companies. The ETP Compensation Committee considered and reviewed the results of the study performed by Longnecker to
determine if the results indicated that our compensation programs were yielding a competitive total compensation model prioritizing incentive-based
compensation and rewarding achievement of short and long-term performance objectives. The ETP Compensation Committee also specifically evaluated
benchmarked results for the annual base salary, annual short-term cash bonus or long-term equity incentive awards of the named executive officers to the
compensation levels at the identified “energy peer group” companies and considered Longnecker’s conclusions and recommendations. While Longnecker
found that ETP is achieving its stated objectives with respect to the “at-risk” approach, they also found that certain adjustments should be implemented to
allow ETP to achieve its targeted percentiles on base compensation and incentive compensation (short and long-term).
Longnecker did not provide any non-executive compensation services for ETP during 2015. In addition to the information received as a result of a periodic
engagement of a third party consultant, the ETP Compensation Committee also utilizes information obtained from other sources, such as annual third party
surveys, in its determination of compensation levels for our named executive officers.
In respect of Sunoco Logistics, during 2015 Longnecker reviewed various metrics in order to recognize that Sunoco Logistics structure is unique given that
(i) in certain respects, Sunoco Logistics operates as significant operational division of ETP; (ii) for certain corporate functions Sunoco Logistics receives
certain shared-service support from ETE and ETP; and (iii) in other operational related functions, Sunoco Logistics operates as an independent publicly-
traded organization. As such, Longnecker reviewed certain of the executives, including the named executive officers of Sunoco Logistics, in their specific
functions to determine the appropriate benchmarking technique. In all circumstances, Longnecker considered Sunoco Logistics annual revenues and market
capitalization levels in its benchmarking.
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