Energy Transfer 2010 Annual Report Download - page 107

Download and view the complete annual report

Please find page 107 of the 2010 Energy Transfer annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 187

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187

Compensation Philosophy
Our compensation program is structured to provide the following benefits:
• 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 compensation; and
• reward individual performance.
Methodology
The Compensation Committee considers relevant data available to it to assess the 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.
Components of Executive Compensation
For the year ended December 31, 2010, 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;
• vesting of previously issued equity-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 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) after 2007.
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
Consulting Services (“Mercer”) during the year ended December 31, 2010 to assist in the determination of
compensation levels for our senior management. The results of this study were utilized to determine long-term
incentive awards and bonuses during 2010 and will also be used to determine other elements of compensation in
2011. The consultant provided an analysis of compensation for senior executives at the following 15 companies
in the energy industry, comprised primarily of midstream and exploration and production companies:
• Enterprise Products Partners L.P.
• Plains All American Pipeline, L.P.
• CenterPoint Energy, Inc.
• The Williams Companies, Inc.
• Sempra Energy
• Kinder Morgan Energy Partners, L.P.
• ONEOK Partners, L.P.
• Enbridge Energy Partners, L.P.
• Sunoco Logistics Partners L.P.
• Atmos Energy Corporation
• El Paso Corporation
• Spectra Energy Partners, LP
• Targa Resources Partners LP
• NuStar Energy L.P.
• Southern Union Company
105