Energy Transfer 2010 Annual Report Download - page 105

ITEM 11. EXECUTIVE COMPENSATION
Overview
As a limited partnership, we are managed by our General Partner, which in turn is managed by its general
partner, ETP LLC, which we refer to in this Item as “our General Partner.” As of December 31, 2010 ETE owned
100% of our General Partner and approximately 25% of our outstanding units. All of our employees are
employed by and receive employee benefits from our Operating Companies.
Compensation Discussion and Analysis
Named Executive Officers
We do not have officers or directors. Instead, we are managed by the board of directors of our General Partner,
and the executive officers of our General Partner perform all of our management functions. As a result, the
executive officers of our General Partner are essentially our executive officers, and their compensation is
administered by our General Partner. This Compensation Discussion and Analysis is, therefore, focused on the
total compensation of the executive officers of our General Partner as set forth below. The executive officers we
refer to in this discussion as our “named executive officers” are the following officers of our General Partner:
• Kelcy L. Warren, Chief Executive Officer;
• Marshall S. (Mackie) McCrea, III, President and Chief Operating Officer;
• Martin Salinas, Jr., Chief Financial Officer;
• Thomas P. Mason, Vice President, General Counsel and Secretary; and
• William G. Powers, Jr., President of Propane Operations.
Our General Partner’s Philosophy for Compensation of Executives
In general, our General Partner’s philosophy for executive compensation is based on the premise that a
significant portion of the executive’s compensation should be incentive-based and that the base salary levels
should be competitive in the marketplace for executive talent and abilities. Our General Partner also believes the
incentives should be competitive in the market place and balanced between short and long-term performance.
Our General Partner believes this balance is achieved by (i) the payment of annual cash bonuses based on the
achievement of financial performance objectives for a fiscal year set at the beginning of such fiscal year and
(ii) the annual grant of restricted unit awards under our equity incentive plans, which are intended to provide a
longer term incentive to our key employees to focus their efforts to increase the market price of our publicly
traded units and to increase the cash distribution we pay to our Unitholders. Since 2008, our equity awards have
primarily been in the form of restricted unit awards that vest over a specified time period, with substantially all of
these types of unit awards vesting over a five-year period at 20% per year based on continued employment
through each specified vesting date. Our General Partner believes that these equity-based incentive arrangements
are important in attracting and retaining our executive officers and key employees as well as motivating these
individuals to achieve our business objectives. The equity-based compensation also reflects the importance we
place on aligning the interests of the executive officers with those of our Unitholders.
While we are responsible for the direct payment of the compensation of our named executive officers as
employees of ETP, ETP does not participate or have any input in any decisions as to the compensation policies of
our General Partner or the compensation levels of the executive officers of our General Partner. The
compensation committee of the board of directors of our General Partner (the “Compensation Committee”) is
responsible for the approval of the compensation policies and the compensation levels of these executive officers.
We directly incur the payment to these executive officers in lieu of receiving an allocation of overhead related to
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