Sunoco 2013 Annual Report Download - page 110

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the directors and executive officers of our general partner,
as well as persons who own more than ten percent of the common units representing limited partnership interests in us, to file
reports of ownership and changes of ownership on Forms 3, 4 and 5 with the SEC. The SEC regulations also require that copies
of these Section 16(a) reports be furnished to us by such reporting persons. Based upon a review of copies of these reports, we
believe all applicable Section 16(a) reports were timely filed in 2013.
ITEM 11. EXECUTIVE COMPENSATION
We do not have any employees. Instead, we are managed by our general partner, and the executive officers of our general
partner perform all of our management functions. Except as set forth below with respect to Mr. Salinas, we pay 100% of the
compensation of the executive officers and employees of our general partner. The executive officers and employees of our
general partner also participate in employee benefit plans and arrangements sponsored by our general partner or its affiliates.
COMPENSATION DISCUSSION AND ANALYSIS
Named Executive Officers
This Compensation Discussion and Analysis (“CD&A”) is focused on the total compensation of the executive officers of
our general partner as set forth below. ETP controls our general partner and owns a significant limited partner interest in us.
Mr. Salinas is an employee of ETP’s general partner. In addition to rendering services to us, he devoted a majority of his
professional time to ETP during 2013. Mr. Salinas participates in employee benefit plans and arrangements sponsored by ETP
and its affiliates. The compensation committee of ETP’s general partner sets the components of his compensation, including
salary and annual bonus, and we have no control over this compensation determination process. However, our general partner’s
Compensation Committee may make equity awards to Mr. Salinas in recognition of his services provided to us. In January
2013, Mr. Salinas received such equity awards, in the form of 8,333 restricted units granted pursuant to the LTIP, vesting at a
rate of 20% per year over a five-year period, subject to his continued employment through each specified vesting date. In
addition, in December 2013, Mr. Salinas received equity awards, in the form of 6,550 restricted units granted pursuant to the
LTIP, vesting over a five-year period, with 60% vesting at the end of the third year and the remaining 40% vesting at the end of
the fifth year, subject to his continued employment through each specified vesting date. These restricted units entitle Mr.
Salinas to receive, with respect to each common unit subject to such restricted unit that has not either vested or been forfeited, a
distribution equivalent right cash payment promptly following each such distribution by us on our common units to our
unitholders.
During 2013, the following individuals, with the exception of Mr. Salinas as described above, were employees of our
general partner and rendered their services solely to us. Throughout the CD&A discussion, the following individuals are
referred to as the Named Executive Officers (“NEOs”) and are included in the Summary Compensation Table:
• Michael J. Hennigan - President and Chief Executive Officer
• Martin Salinas, Jr. - Chief Financial Officer
• Kathleen Shea-Ballay - Senior Vice President, General Counsel and Secretary
• Kurt A. Lauterbach - Senior Vice President, Lease Acquisitions
• David R. Chalson - Senior Vice President, Operations
Compensation Philosophy and Objectives
During 2013, as a result of the Merger, we transitioned from our pre-Merger compensation philosophy and objectives to a
compensation philosophy and set of objectives similar to those of ETP. In both instances, the philosophy for executive
compensation of our general partner (whether pre-Merger or post) was substantially similar based on the premise that a
significant portion of each executive’s total compensation should be incentive-based or “at-risk” compensation and that
executives’ total compensation levels should be competitive in the marketplace for executive talent and abilities. Our general
partner seeks a total compensation program that provides for a slightly below the median market annual base compensation rate
but incentive-based compensation composed of a combination of compensation vehicles to reward both short- and long-term
performance that are both targeted to pay-out at approximately the top-quartile of market. Our general partner believes the
incentives should be composed of a combination of compensation vehicles to reward both short- and long-term performance.
Our general partner believes the incentive-based balance is achieved by (i) the payment of annual discretionary cash bonuses
that consider the achievement of the Partnership’s financial performance objectives for a fiscal year set at the beginning of such
fiscal year and the individual contributions of our NEOs to the success of the Partnership and its achievement of the annual