Sunoco 2013 Annual Report Download - page 140

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COMPENSATION PRACTICES AS THEY RELATE TO RISK MANAGEMENT
The Compensation Committee has oversight responsibility to ensure that our incentive compensation programs do not
incentivize or encourage excessive or unnecessary risk-taking/wrong behavior. The following is a description of the
compensation risk assessment process, as well as a description of our compensation risk mitigation techniques.
An executive’s compensation package includes a mix of base salary, cash-based short-term incentives, and equity-based
long-term incentives. The mix is designed to balance the emphasis on short-term and long-term performance. Performance
metrics applicable to short-term and long-term incentives have included a mix of financial and non-financial goals, some of
which have been relative to our performance peers. The long-term metrics for the 2013 performance-based restricted units were
total unitholder return and growth in cash distributions to unitholders relative to our peers. This approach creates a balance of
absolute and relative performance to ensure that executives are rewarded when sustained results exceed our peer group.
The Compensation Committee reviews and approves the annual and long-term plan performance metrics and goals
annually. As a part of this process, the Compensation Committee focuses on what executive behavior it is attempting to incent
and the potential associated risks. The Compensation Committee periodically receives financial information from the CFO, and
information on accounting matters that may have an impact on the performance goals, including any material changes in
accounting methodology and information about extraordinary/special items excluded by us and from our peer companies’
results, so that the Compensation Committee members may understand how the exercise of management judgment in
accounting and financial decisions affects plan payouts.
We maintain unit ownership guidelines for our top executives. The amount of our common units required to be owned
increases with the level of responsibility. Requiring an executive to hold a substantial portion of accumulated wealth in our
common units, which must be held until the executive retires or otherwise leaves the employ of our general partner or its
affiliates, aligns his or her behavior towards long-term unitholder value creation. See “Compensation Discussion & Analysis-
Elements of Compensation-Long-Term Incentive Awards (Equity Awards)-Unit Ownership Guidelines” for additional
information.
Employees of our general partner and its affiliates are subject to our Insider Trading Policy, which, among other things,
prohibits an employee from entering into short sales, or purchasing, selling, or exercising any puts, calls or similar instruments
pertaining to our securities, all of which could incent an employee towards engaging in overly risky behavior for short-term
gains.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Messrs. Angelle, Anderson, Bray, Hennigan and McCrea served on the Compensation Committee during 2013. Mr.
Hennigan is an officer of our general partner, and Mr. McCrea is an officer of the general partner of ETP. During 2013, none of
the members of the Compensation Committee served as executive officers of any company with respect to which any of our
officers served on such Company’s board of directors.