Sunoco 2015 Annual Report Download - page 114

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restricted unit awards under the LTIP, which awards are intended to provide a long-term incentive and retentive value to our
key employees to focus their efforts on increasing the market price of our publicly traded units and to increase the cash
distribution we pay to our unitholders.
During 2015, the compensation for our executive officers, including our NEOs, but excluding Mr. Salinas, was
determined by our general partner's Compensation Committee. Our compensation program is structured to provide the
following benefits:
• reward executives with an industry-competitive total compensation package of competitive base salaries and
significant incentive opportunities, yielding a total compensation package approaching the top-quartile of the market;
• 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 or "at-risk" compensation; and
• reward individual performance.
Compensation Methodology
Our general partner's Compensation Committee considers relevant data available to it to assess our competitive position
with respect to base salary, annual bonuses and long-term incentive compensation for our executive officers. The Compensation
Committee also considers individual performance, levels of responsibility, skills and experience. For our 2015 compensation
packages, our compensation methodology for the NEOs was substantially similar to that of ETP.
Periodically, the compensation committees of ETE's and/or ETP's general partner engage 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. During 2015, Longnecker & Associates ("Longnecker") was
engaged to evaluate the market competitiveness of total compensation levels of a number of officers of ETE, ETP and our
Partnership and to provide market information with respect to compensation of certain executives. In particular, the review by
Longnecker was designed to (i) evaluate the market competitiveness of total compensation levels for certain members of senior
management, including our NEOs; (ii) assist in the determination of appropriate compensation levels for senior management,
including our NEOs; and (iii) confirm that our compensation programs were yielding compensation packages consistent with
our overall compensation philosophy. In respect of the Partnership, we were reviewed by Longnecker through various metrics
in order to recognize that the Partnership's structure is unique given that (i) in certain respects, the Partnership operates as
significant operational division of ETP; (ii) the Partnership receives certain shared-service support from ETE and ETP; and (iii)
in other functions, the Partnership operates as an independent publicly-traded organization. As such, Longnecker reviewed
certain of the executives, including the NEOs, in their specific functions to determine the appropriate benchmarking technique.
In all circumstances, Longnecker considered our annual revenues and market capitalization levels in its benchmarking.
In conducting its review with respect to executives that were considered to have roles consistent with those of an
executive at an independent publicly-traded entity, Longnecker worked with us to identify a "peer group" of 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. The identified companies included:
Buckeye Partners, L.P. PBF Energy Inc.
Enbridge Energy Partners, L.P. Plains All American Pipeline, L.P.
HollyFrontier Corporation Spectra Energy Corp
MarkWest Energy Partners, L.P. Targa Resources Corp.
NGL Energy Partners LP Tesoro Corporation
ONEOK Inc.
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 for certain companies in the
oil and gas industry. The Compensation Committee utilized the information provided by Longnecker to ensure that the total
compensation of our NEOs is both competitive with the market information received and consistent with our compensation
philosophy. While Longnecker found that the Partnership is achieving its stated objectives with respect to the "at-risk" approach,
they also found that certain adjustments should be implemented to allow the Partnership to achieve its targeted percentiles on base
compensation and incentive compensation (short- and long-term).