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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant ☒
Filed by a Party other than the Registrant ☐
Check the appropriate box:
☐
Preliminary Proxy Statement
☐
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
☒
Definitive Proxy Statement
☐
Definitive Additional Materials
☐
Soliciting Material under §240.14a-12
PLAINS ALL AMERICAN PIPELINE, L.P.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
☒
No fee required.
☐
Fee paid previously with preliminary materials.
☐
Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a6(i)(1) and 0 -11.
April 12, 2024
Dear Fellow Plains Investors,
We are grateful for your investment in Plains, and we are pleased to invite you to join us for our May 22, 2024 annual meeting.
2023 was a year of strong execution for Plains, in which we were able to navigate a dynamic business landscape and macroeconomic environment. We exceeded our 2023 financial targets, helping us to accelerate progress on our long-term strategy — most notably our focus on generating meaningful free cash flow, exercising capital discipline and maintaining a clear and concise capital allocation framework that prioritizes increasing returns of capital to equity holders while maintaining a strong balance sheet and financial flexibility.
Our integrated business model, flexible asset base and drive to be the partner of choice allowed us to capture increasing volumes from production growth and capitalize on both commercial and bolt-on M&A opportunities throughout the year. 2023 accomplishments include:
•
Delivered $2.71 billion in Adjusted EBITDA attributable to PAA and Implied Distributable Cash Flow per Common Unit and Common Unit Equivalent of $2.46, exceeding our initial February targets of approximately $2.50 billion and $2.33, respectively;
•
Generated $1.60 billion in Adjusted Free Cash Flow (excluding changes in Assets and Liabilities), returned approximately $989 million to our common and preferred equity holders via distributions, and invested approximately $524 million of investment and maintenance capital (net to our interest);
•
Lowered our long-term leverage ratio target range to 3.25x – 3.75x and ended 2023 with a leverage ratio of 3.1x (we also received recognition for our efforts by the credit rating agencies with two upgrades to mid-BBB);
•
Completed two asset sales and three bolt-on acquisitions, all of which further optimized our asset base and streamlined our operations, while generating attractive returns for unitholders; and
•
Increased our annual distribution by $0.20 per unit (23%) in 2023 and by $0.20 per unit (19%) in February 2024, and achieved strong equity performance with a TSR of 38% in 2023.
Plains remains constructive on the long-term fundamentals that underpin our business, with recent events serving as a reminder that all forms of energy are needed to satisfy growing global energy demand. The challenging political and macroeconomic environment demonstrates the increasing importance of North America as a key supplier of global energy. Underlying supply and demand fundamentals, together with realistic assumptions regarding the growth of various energy sources, support our belief that hydrocarbons will remain essential to ensuring global stability and quality of life, and that worldwide hydrocarbon demand will remain robust well into the future.
With our network of strategically located North American midstream assets and our focus on the long-term positioning and optimization of our business, we believe we are very well positioned to play a critical role in the delivery of energy across North America and globally. As we do so, we will remain focused on our key objectives of being a safe, reliable, and responsible operator, generating free cash flow, exercising capital discipline, increasing returns of capital to unitholders, and maintaining financial flexibility. We believe the execution of our plan will deliver strong performance and enhanced value for our investors over the long term.
We appreciate your continued investment and support and we look forward to your participation in our 2024 annual meeting in May.
Sincerely,
Willie Chiang
Chairman of the Board & CEO
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Filed by the Registrantý |
Filed by a Party other than the Registranto |
Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material under §240.14a-12
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PLAINS ALL AMERICAN PIPELINE, L.P. |
(Name of Registrant as Specified In Its Charter) |
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant) |
Payment of Filing Fee (Check the appropriate box): |
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
| | (1) | | Title of each class of securities to which transaction applies:
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| | (2) | | Aggregate number of securities to which transaction applies:
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| | (3) | | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
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| | (4) | | Proposed maximum aggregate value of transaction:
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| | (5) | | Total fee paid:
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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Amount Previously Paid:
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| | (2) | | Form, Schedule or Registration Statement No.:
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| | (3) | | Filing Party:
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| | (4) | | Date Filed:
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![[MISSING IMAGE: lg_plainsaap-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/lg_plainsaap-pn.jpg)
Table of Contents
Plains All American Pipeline, L.P.
333 Clay Street, Suite 1600
Houston, Texas 77002April 5, 2018
NOTICE OF ANNUAL MEETING OF UNITHOLDERS
To ourBe Held On May 22, 2024
To holders of common units and Series A Convertible Preferred unitholders: You are cordially invited to attend the 2018units of Plains All American Pipeline, L.P.:
The 2024 Annual Meeting (the "PAA“PAA Annual Meeting"Meeting”) of the common unitholders and Series A Convertible Preferred unitholders (collectively, our “Unitholders”) of Plains All American Pipeline, L.P. to(“PAA”) will be held on May 15, 2018,22, 2024, at 9:10:00 a.m. Central Time, in The Senatethe Texas Room located on the 1219th Floor of TwoThree Allen Center, 1200 Smith333 Clay Street, Houston, Texas 77002. At the PAA Annual Meeting, our Unitholders (excluding Plains AAP, L.P.) will consider and vote on the following matters:
1.
The election of three Class III directors to serve on the board of directors (the “Board”) of our general partner, PAA GP Holdings LLC has calleduntil the 2027 annual meeting;
2.
The ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
3.
The approval, on a non-binding advisory basis, of our 2023 named executive officer compensation;
4.
A non-binding advisory vote on the frequency with which future advisory votes to approve our named executive officer compensation should be held; and
5.
Any proposal to transact such other business as may properly come before the PAA Annual Meeting for you to consider and act uponany adjournment or postponement thereof.
The Board unanimously recommends that our Unitholders vote “FOR” the matters describedelection of each director listed in proposal 1, “FOR” proposals 2 and 3 and “ONE YEAR” on proposal 4. Additional information regarding these proposals is included in the attached proxy statement. A Votes received on proposals 1, 2, 3 and 4 will be “passed through” as voting instructions to PAA, the owner of all of the Class C shares of Plains GP Holdings, L.P. (“PAGP”), who will in turn vote such shares at PAGP’s annual meeting on behalf of our Unitholders pursuant to such instructions. See “Information About the PAGP and PAA Annual Meetings” below for more information.
Unitholders as of the close of business on March 25, 2024 (the “Record Date”) are entitled to receive notice of and to vote at the PAA Annual Meeting proxy statement and proxy card are enclosed. Our Annual Reportany postponements or adjournments thereof. A list of Unitholders entitled to vote is on Form 10-K for the year ended December 31, 2017 is also enclosed.file at our principal offices, 333 Clay Street, Suite 1600, Houston, TX 77002.
Your vote is very important. Whether or not you plan to attend the PAA Annual Meeting, please cast your vote by following the Internet or telephone voting instructions on the proxy card. You may also vote by completing, signing and dating the accompanying proxy card and returning it promptly in the postage-prepaid envelope provided. See "Questions“Questions and Answers About the PAA Annual Meeting—Meeting — How do I vote?"” in the attached proxy statement for more details. Returning the proxy card or voting on the Internet or by telephone does not deprive you of your right to attend the PAA Annual Meeting and to vote your units in person for the matters to be acted upon at the PAA Annual Meeting. We look forward to seeing you at the PAA Annual Meeting.
| | |
| | Sincerely, |
| |  |
| | Greg L. Armstrong
Chairman of the Board and Chief Executive Officer
PAA GP Holdings LLC |
TableBy Order of Contents
the Board of Directors of
PAA GP Holdings LLC, general partner of
Plains GP Holdings, L.P., sole member of
Plains All American GP LLC, general partner of
Plains AAP, L.P., sole member of
PAA GP LLC, general partner of
Plains All American Pipeline, L.P.
333 Clay Street, Suite 1600
Richard McGee
Executive Vice President, General Counsel and Secretary
Houston, Texas 77002
NOTICE OF ANNUAL MEETING OF UNITHOLDERS
To Be Held On May 15, 2018
To the holders of common and Series A Convertible Preferred units of Plains All American Pipeline, L.P.:
The 2018 Annual Meeting (the "PAA Annual Meeting") of the common unitholders (other than Plains AAP, L.P.) and Series A Convertible Preferred unitholders (collectively, our "Unitholders") of Plains All American Pipeline, L.P. ("PAA") will be held on May 15, 2018, at 9:00 a.m. Central Time, in The Senate Room, located on the 12th Floor of Two Allen Center, 1200 Smith Street, Houston, Texas 77002. At the PAA Annual Meeting, our Unitholders will consider and vote on how to instruct PAA to vote the Class C shares of Plains GP Holdings, L.P. ("PAGP") that PAA owns at PAGP's annual meeting with respect to the following matters:
1. The election of two Class III directors to serve on the board of directors (the "Board") of PAA GP Holdings LLC until the 2021 annual meeting;
2. The ratification of the appointment of PricewaterhouseCoopers LLP as our and PAGP's independent registered public accounting firm for the fiscal year ending December 31, 2018;
3. The approval, on a non-binding advisory basis, of our named executive officer compensation;
4. A non-binding advisory vote on the frequency with which future advisory votes to approve our named executive officer compensation should be held; and
5. Any proposal to transact such other business as may properly come before the PAA Annual Meeting and any adjournment or postponement thereof.
The Board unanimously recommends that our Unitholders vote to instruct PAA to vote the PAGP Class C shares that it owns at PAGP's annual meeting "FOR" proposals 1, 2 and 3 and "ONE YEAR" on proposal 4. Additional information regarding these proposals is included in the attached proxy statement.
We have set the close of business on March 20, 2018 as the record date for determining which of our Unitholders are entitled to receive notice of and to vote at the PAA Annual Meeting and any postponements or adjournments thereof. A list of Unitholders entitled to vote is on file at our principal offices, 333 Clay Street, Suite 1600, Houston, Texas 77002, and will be available for inspection by any Unitholder during the meeting.
Your vote is very important. If you cannot attend the PAA Annual Meeting, you may vote your units electronically, via the Internet or by telephone, or by mailing the proxy card in the enclosed postage-prepaid envelope. You may also attend the PAA Annual Meeting and vote in person, even if you have already returned a proxy.
April 12, 2024 | | | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS
FOR THE ANNUAL MEETING OF UNITHOLDERS
TO BE HELD ON MAY 22, 2024 | | |
| | | The Notice of Annual Meeting, the proxy statement for the Annual Meeting and our 2023 Annual Report are available at http://www.astproxyportal.com/ast/02337/. | | |
| | |
| | By Order of the Board of Directors of
PAA GP Holdings LLC, general partner of
Plains GP Holdings, L.P., sole member of
Plains All American GP LLC, general partner of
Plains AAP, L.P., sole member of
PAA GP LLC, general partner of
Plains All American Pipeline, L.P. |
|
|
 |
| | Richard McGee
Secretary |
Houston, Texas
April 5, 2018
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL MEETING OF UNITHOLDERS
TO BE HELD ON MAY 15, 2018
The Notice of Annual Meeting, the proxy statement for the Annual Meeting and our 2017 Annual Report are available
at http://www.astproxyportal.com/ast/02337/.
Table of Contents
TABLE OF CONTENTS
TABLE OF CONTENTS
| | | | | |
GENERAL INFORMATION ABOUT THE PLAINS ALL AMERICAN PIPELINE, L.P.'S ANNUAL MEETING | | | | | 1 | | |
| | INFORMATION ABOUT THE PAGP AND PAA ANNUAL MEETING MEETINGS | | | | |
1 | | |
| | QUESTIONS AND ANSWERS ABOUT THE PAA ANNUAL MEETING | | | | |
32 | | |
| | | | | | | 8 | | |
| | | | | | |
715 | | |
CORPORATE GOVERNANCE AND RELATED MATTERS
| | | | | |
1324 | | |
| | EXECUTIVE OFFICERS COMPENSATION | | | | |
1626 | | |
EXECUTIVE COMPENSATION
| | | | |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT | | | | |
4260 | | |
| | EQUITY COMPENSATION PLAN INFORMATION TABLE | | | | |
4564 | | |
| | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS | | | | |
4665 | | |
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
| | | | |
REPORT OF THE AUDIT COMMITTEE | | | | |
5369 | | |
| | PRINCIPAL ACCOUNTANT FEES AND SERVICES | | | | |
5470 | | |
| | PROPOSAL 2—2 – RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM | | | | |
5571 | | |
| | PROPOSAL 3—3 – ADVISORY VOTE TO APPROVE OUR 2023 NAMED EXECUTIVE OFFICER COMPENSATION | | | | |
5672 | | |
| | PROPOSAL 4—4 – ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION | | | | |
5773 | | |
| | OTHER MATTERS FOR THE PAA ANNUAL MEETING | | | | |
5874 | | |
| | DIRECTOR NOMINATIONS AND UNITHOLDER PROPOSALS FOR 2019THE 2025 ANNUAL MEETING | | | | |
5874 | | |
| | | | |
59 | | 75 | | |
PLAINS ALL AMERICAN PIPELINE, L.P.
PROXY STATEMENT
For
2018
2024 Annual Meeting of Unitholders To Be Held On
May 15, 2018
22, 2024
GENERAL INFORMATION ABOUT THE PLAINS ALL AMERICAN PIPELINE, L.P.'S
ANNUAL MEETING
The board of directors (the "Board"“Board”) of PAA GP Holdings LLC ("(“PAGP GP"GP” or our "general partner"“general partner”), the general partner of Plains GP Holdings, L.P. ("PAGP"(“PAGP”), the sole member of Plains All American GP LLC ("(“GP LLC"LLC”), the general partner of Plains AAP, L.P. ("AAP"(“Plains AAP”), the sole member of PAA GP LLC, the general partner of Plains All American Pipeline, L.P. ("PAA"(“PAA”), is soliciting proxies to be voted on behalf of holders of our common units (other than AAP) and holders of our Series A Convertible Preferred Units ("(“Series A preferred units"units”) (holders of our common units and our Series A preferred units are collectively referred to as our "Unitholders"“Unitholders”) at the 20182024 annual meeting of Unitholders (the "PAA“PAA Annual Meeting"Meeting”). This proxy statement is being furnished to you in connection with the solicitation of proxies by and on behalf of the Board for use at the PAA Annual Meeting and includes information about the matters to be voted upon at the PAA Annual Meeting. The PAA Annual Meeting will be held on May 15, 2018,22, 2024, at 9:10:00 a.m. Central Time, in The Senatethe Texas Room located on the 12th19th Floor of TwoThree Allen Center, 1200 Smith333 Clay Street, Houston, Texas 77002. References to "PAA," "we," "us," "our," "ours"“PAA,” “we,” “us,” “our,” “ours” and similar terms refer to Plains All American Pipeline, L.P. Proxy materials, including the Notice of Annual Meeting, this proxy statement, proxy card and our Annual Report on Form 10-K for the year ended December 31, 20172023 (our "2017“2023 Annual Report"Report”), are being mailed to Unitholders beginning on or about April 5, 2018.12, 2024.
We will furnish additional copies of our 20172023 Annual Report without charge upon the written request of any record or beneficial owner of our common units or Series A preferred units whose proxy we are soliciting in connection with the PAA Annual Meeting. Please address requests for additional copies of the 20172023 Annual Report to the Investor Relations Department, Plains All American, 333 Clay Street, Suite 1600, Houston, Texas 77002.
77002, or email your request to plainsIR@plains.com.
INFORMATION ABOUT THE PAGP AND PAA ANNUAL MEETING
MEETINGS
PAGP will be holdinghold an annual meeting of its Class A, Class B and Class C shareholders (the “PAGP Annual Meeting”) immediately following the PAA Annual Meeting. At the PAGP Annual Meeting, and the PAGP shareholders will be asked to consider and vote upon the matters set forthproposals 1, 2, 3 and 4 described below. Each PAGP shareholder of record will be entitled to one vote for each Class A, Class B and Class C share owned on all matters to be considered at the PAGP annual meeting.for Proposals 1, 2, 3 and 4. On March 20, 2018, 157,011,13925, 2024, 197,252,259 Class A 126,084,572shares, 35,401,669 Class B shares and 512,337,124539,507,571 Class C shares were issued and outstanding. PAA owns all of the issued and outstanding Class C shares.shares, which serve as a pass-through voting mechanism allowing eligible PAA Unitholders to vote indirectly at the PAGP Annual Meeting by instructing PAA how to vote the Class C shares on their behalf.
At the PAA Annual Meeting, PAA Unitholders (other than Plains AAP) will vote on a pass-through basis on proposals 1, 2, 3 and 4 described below by instructing PAA how to vote the PAGP Class C shares that it owns on such proposals at the PAGP Annual Meeting. PAA will vote (or refrain from voting) the Class C shares at the PAGP Annual Meeting on behalf of and according to the direction of PAA’s Unitholders (excluding Plains AAP) with respect to proposals 1, 2, 3 and 4.
See pages 9-11 for additional information with respect to our ownership and voting structure.
QUESTIONS AND ANSWERS ABOUT THE PAA ANNUAL MEETING
The following questions and answers are intended to briefly address some commonly asked questions regarding the PAA Annual Meeting. These questions and answers may not address all questions that may be important to you as a Unitholder. Please refer to the additional information contained elsewhere in this proxy statement and the documents referred to in this proxy statement.
Q:
What is the purpose of these proxy materials?
A:
The Board is soliciting your proxy to vote at the PAA Annual Meeting because you were a Unitholder at the close of business on March 25, 2024, the record date for the PAA Annual Meeting (the “Record Date”), and you are therefore entitled to receive notice regarding the PAA Annual Meeting, and to attend and vote at the PAA Annual Meeting. This proxy statement summarizes the information that you need to know in order to cast your vote at the PAA Annual Meeting. Your vote is very important and the Board strongly encourages you to exercise your right to vote. You do not need to attend the PAA Annual Meeting to vote your units, and we encourage you to vote even if you are unable to attend the PAA Annual Meeting in person. You may vote by Internet, by telephone or by signing and returning the attached proxy card in the envelope provided. See “How do I vote?” below.
Q:
What is the recommendation of the Board?
A:
The Board unanimously recommends that you vote in the following manner:
•
FOR the election of each of Greg Armstrong, John Raymond and Bobby Shackouls as a Class III director of the Board to serve until the 2027 annual meeting;
•
FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2024;
•
FOR the approval, on a non-binding advisory basis, of our 2023 named executive officer compensation; and
•
FOR “ONE YEAR” as the frequency with which future advisory votes to approve our named executive officer compensation should be held.
Q:
When and where is the PAA Annual Meeting?
A:
The PAA Annual Meeting will be held on May 22, 2024, at 10:00 a.m. Central Time, in the Texas Room located on the 19th Floor of Three Allen Center, 333 Clay Street, Houston, Texas 77002. Only Unitholders of record as of the close of business on March 25, 2024 are entitled to vote and ask questions at the PAA Annual Meeting. If you are not a Unitholder of record but hold units in “street name” through a brokerage firm, bank, dealer or other similar organization, trustee, or nominee (generally referred to in this proxy statement as a “broker”), you may attend the PAA Annual Meeting as a guest. Please note that if you hold units in “street name” through a broker and desire to vote your units or ask questions during the PAA Annual Meeting, you must request and obtain a valid “legal proxy” from your broker and register to attend the PAA Annual Meeting as a Unitholder with Equiniti Trust Company, LLC (“EQ”).
Information on who can vote and ask questions during the PAA Annual Meeting is discussed immediately below.
Q:
Who can vote and ask questions at the PAA Annual Meeting?
A:
You are entitled to vote and ask questions at the PAA Annual Meeting if you were a Unitholder of record as of the close of business on March 25, 2024, the Record Date for the PAA Annual Meeting.
Unitholder of Record: Units Registered in Your Name. You are a Unitholder of record if your units were registered directly in your name with our transfer agent, EQ, at the close of business on March 25, 2024. As a Unitholder of record, you may vote and ask questions during the PAA
Annual Meeting. Whether or not you plan to attend the PAA Annual Meeting, we urge you to submit a proxy to ensure your vote is counted. See page 4 for detailed instructions on how to vote your units.
Beneficial Owner: Units Registered in the Name of Broker. If your units were held in an account at a broker at the close of business on March 25, 2024, then you are the beneficial owner of units held in “street name” and the broker holding your account is considered to be the Unitholder of record for purposes of voting at the PAA Annual Meeting. As a beneficial owner, you have the right to direct your broker regarding how to vote the units in your account. You are also invited to attend the PAA Annual Meeting as a guest. Because you are not the Unitholder of record, you may not vote your units or ask questions at the PAA Annual Meeting unless you request and obtain a valid legal proxy from the organization that holds your units giving you the right to vote the units and ask questions at the PAA Annual Meeting. Follow the instructions provided by your broker or bank, or contact your broker or bank to request a legal proxy form.
After obtaining a valid legal proxy from your broker, bank or other agent, in order to vote and ask questions at the PAA Annual Meeting, you must register to attend the PAA Annual Meeting as a Unitholder by submitting to EQ proof of your legal proxy reflecting the number of your units along with your name and email address. Requests for registration should be directed to proxy@equiniti.com or to facsimile number 718-765-8730. Written requests can be mailed to:
Equiniti Trust Company, LLC
Attn: Proxy Tabulation Department
55 Challenger Road, Suite 200B | Ridgefield Park, NJ 07660
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 15, 2024.
You will receive a confirmation of your registration by email after we receive your registration materials. Once registered, you may attend the PAA Annual Meeting, submit questions and vote your units during the meeting.
Q:
Who is soliciting my proxy?
A:
The Board is sending or otherwise providing you access to this proxy statement in connection with its solicitation of proxies for use at the PAA Annual Meeting.
Q:
How many votes will I have, and what is the total number of units entitled to vote at the PAA Annual Meeting?
A:
Each common unitholder (other than Plains AAP) is entitled to one vote for each common unit owned on all matters to be considered at the PAA Annual Meeting. The Series A preferred unitholders will vote on an as-converted basis, with each Series A preferred unit entitled to one vote on all matters to be considered at the PAA Annual Meeting. As of March 25, 2024, 701,071,031 common units and 71,090,468 Series A preferred units were issued and outstanding. As of March 25, 2024, Plains AAP owned 232,653,928 common units; however, as noted above, Plains AAP is not entitled to vote such common units on proposals 1, 2, 3 or 4. The following table provides the number of common units entitled to vote on each proposal:
| | Proposal | | | Common Units Entitled to Vote
(including Series A Preferred
Units on an as-converted basis) | | | Explanation | |
| | Proposals 1, 2, 3 and 4 | | | 539,507,571 | | | Excludes common units held by Plains AAP as of the Record Date. The number of common units owned by Plains AAP is, by design, equivalent to the number of outstanding PAGP Class A and Class B shares. PAGP Class A and Class B shareholders will vote on proposals 1, 2, 3 and 4 directly at the PAGP Annual Meeting. Therefore, excluding common units held by Plains AAP from the “pass-through” vote prevents double voting on these proposals within the overall capital structure of PAGP, Plains AAP and PAA. See pages 9-11 for additional information regarding our ownership and voting structure. | |
Q:
How do I vote?
A:
If you are a Unitholder of record at the close of business on the Record Date, you may vote your units by any of the following methods:
•
Voting online before the meeting. You may vote online by visiting the Internet address listed on your proxy card. Internet voting procedures have been established to verify your identity and to confirm your voting instructions. Please have your proxy card available when you visit the Internet address.
•
Voting by telephone before the meeting. You may vote by telephone by calling the toll-free number listed on your proxy card. Telephone voting procedures have been established to verify your identity, to allow you to provide proxy voting instructions and to confirm that your instructions were accurately recorded. Please have your proxy card available when you call.
•
Voting by mail before the meeting. You may vote by mail by returning your completed, signed and dated proxy card in the enclosed postage-paid return envelope. However, in order to ensure that your vote is received in a timely manner, we recommend that you vote online or by telephone as described above.
•
Voting during the meeting. If you were a Unitholder of record as of the close of business on the Record Date, you may attend the PAA Annual Meeting, ask questions and vote during the meeting. If you are a beneficial owner of units held in street name, you must be registered to attend the PAA Annual Meeting as a Unitholder and must have a valid legal proxy in order to ask questions and vote during the meeting. Please read the “Beneficial Owner: Units Registered in the Name of Broker” answer under the question “Who can vote and ask questions at the PAA Annual Meeting?” above for instructions on how to register to attend the PAA Annual Meeting and obtain a legal proxy.
Internet and telephone voting will be available to eligible Unitholders 24 hours a day until 11:59 p.m. Eastern Time on May 21, 2024, the night before the PAA Annual Meeting. If you use the Internet or the toll-free telephone number to provide your proxy voting instructions, you do not need to mail
in your proxy card. If you mail in your proxy card, it must be received by PAA before the voting polls close at the PAA Annual Meeting.
Even if you plan to attend the PAA Annual Meeting, please vote your units by proxy in advance of the PAA Annual Meeting (either online, by telephone or by mail as described above) as soon as possible so that your units will be represented at the PAA Annual Meeting if for any reason you are unable to attend.
Q:
What do I do if I want to change my vote after I have already voted by proxy?
A:
If you were a Unitholder of record as of the close of business on the Record Date, you may change your vote at any time before the voting polls close at the PAA Annual Meeting by:
•
submitting a proxy with new voting instructions using the Internet or telephone voting system (please note that the deadline for voting online or by telephone is 11:59 p.m. Eastern Time on May 21, 2024);
•
delivering a later-dated, executed proxy card or written notice of revocation of your proxy to allowEquiniti Trust Company, LLC, 55 Challenger Road, Suite 200B, Ridgefield Park, NJ 07660 no later than 5:00 p.m. Eastern Time on May 21, 2024; or
•
attending the PAA Annual Meeting and voting during the PAA Annual Meeting pursuant to the instructions above. Please note that attendance at the PAA Annual Meeting will not by itself (i.e., without also voting) revoke a previously granted proxy.
If you were a beneficial owner of common units held in street name as of the close of business on the Record Date and you have instructed your broker or other nominee to vote your units, you must follow the procedure your broker or other nominee provides to change those instructions. You may also vote during the PAA Annual Meeting if you obtain a legal proxy from your broker or other nominee and register to attend the PAA Annual Meeting pursuant to the instructions above.
Q:
What is a broker non-vote?
A:
A broker non-vote occurs when units held by a broker, bank or other nominee on behalf of a beneficial owner are not voted with respect to a particular matter because the broker lacks discretionary authority to vote the units and has not received voting instructions from the beneficial owner. Brokers, banks and other nominees only have discretionary authority to vote on routine proposals; they are prohibited from voting on non-routine proposals without instructions from the beneficial owner. The ratification of the independent auditor (Proposal 2) is the only routine matter on which brokers, banks and other nominees may vote in their discretion on behalf of beneficial owners who have not provided voting instructions. The election of directors (Proposal 1), the advisory vote to approve our 2023 named executive officer compensation (Proposal 3) and the advisory vote on the frequency of future say on pay voting (Proposal 4) are non-routine matters. If a broker returns a proxy with a voting choice selected for a routine proposal but with no voting choice selected for a non-routine proposal, the result is a broker non-vote. Broker non-votes are counted as present and entitled to vote for purposes of determining a quorum at the meeting, but are not considered votes cast and will have no impact on non-routine matters. Accordingly, we do not expect there to be any broker non-votes for Proposal 2 and broker non-votes will not be counted with respect to Proposals 1, 3 and 4.
Q:
What constitutes a quorum?
A:
The holders of a majority of the outstanding common units and Series A preferred units (on an as-converted basis) entitled to vote and represented in person or by proxy, considered together, shall constitute a quorum at the PAA Annual Meeting. Your units will be counted as present (i.e., entitled to vote and represented in person or by proxy) at the PAA Annual Meeting if:
•
you are present and vote at the meeting; or
•
you, or your broker if you are a beneficial owner of units held in street name, have submitted a properly executed proxy.
Executed proxies received but marked as abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum.
Q:
What will I be voting on and what vote is required to approve the proposals discussed in this proxy statement?
A:
Unitholders to cast(other than Plains AAP) will be casting a "pass-through"“pass-through” vote on Proposals 1, 2, 3 and 4 by instructing PAA how to vote its PAGP Class C shares on such proposals at the PAGPPAGP’s annual meeting. PAA will vote (or refrain from voting) its Class C shares on each matter submitted to PAGP'sPAGP’s shareholders in the same proportion as the Unitholders vote (or refrainvotes received from voting)or withheld by the Unitholders with respect to such matter.
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The holders of a majority of the outstanding Class A, Class B and Class C shares entitled to vote and represented in person or by proxyproposals that will constitute a quorum at the PAGP annual meeting. The following table sets forth certain information with respect to the proposals to be voted upon:
upon and the required vote for approval of such proposals is set forth in the following table:
| | Proposal | | | |
Proposal | | Voting Options | | | | | Vote Required for Approval of
Proposal at the PAGP Annual Meeting | |
|---|
To elect two | 1. The election of three Class III directors to serve on the Board until the 20212027 annual meeting. | | | You may vote "FOR"“FOR”, or you may "WITHHOLD"“WITHHOLD” authority to vote for, all, some or none of the nominees for director. | | | Directors will be elected by a plurality of the votes cast, in person or by proxy, by the holders of the Class A, Class B and Class C shares. Abstentionsshares present and brokerentitled to vote, voting as a single class. Broker non-votes are not considered votes cast and will have no effect on the election of directors. | |
To ratify | 2. The ratification of the appointment of PricewaterhouseCoopers LLP as PAA'sPAGP’s and PAGP'sPAA’s independent registered public accounting firm for the fiscal year ending December 31, 2018.2024. |
|
| You may vote "FOR"“FOR” or "AGAINST"“AGAINST” the proposal, or you may "ABSTAIN"“ABSTAIN” from voting. |
|
This | In order for this proposal to be approved, it must receive a majority of the votes cast, in person or by proxy, by the holders of the Class A, Class B and Class C shares present and entitled to vote, voting as a single class. Abstentions will be counted as votes present and entitled to vote and will have the same effect as votes "AGAINST" the“AGAINST” this proposal. BrokerWe do not expect there to be any broker non-votes will be counted as votes "FOR" thewith respect to this proposal. | |
To approve, | 3. The approval, on a non-binding advisory basis, of our 2023 named executive officer compensation. |
|
| You may vote "FOR"“FOR” or "AGAINST"“AGAINST” the proposal, or you may "ABSTAIN"“ABSTAIN” from voting. |
|
This | In order for this non-binding proposal to be approved, it must receive a majority of the votes cast, in person or by proxy, by the holders of the Class A, Class B and Class C shares present and entitled to vote, voting as a single class. Abstentions will be counted as votes present and entitled to vote and will have the same effect as votes "AGAINST" the“AGAINST” this proposal. Broker non-votes are not considered votes cast and will not be counted as either voteshave no effect on the outcome of this proposal. | |
| | Proposal | | | Voting Options | | | Vote Required for or votes againstApproval of
Proposal at the proposal.PAGP Annual Meeting | |
To vote, | 4. Voting, on a non-binding advisory basis, on the frequency with which future advisory votes to approve our named executive officer compensation should be held. |
|
| You may vote to hold future advisory votes to approve our named executive officer compensation every "ONE YEAR"“ONE YEAR”, "TWO YEARS"“TWO YEARS” or "THREE YEARS"“THREE YEARS”, or you may "ABSTAIN"“ABSTAIN” from voting. |
|
| The option (one, two or three years) that receives a majority of the votes cast, in person or by proxy, by the holders of the Class A, Class B and Class C shares present and entitled to vote, voting as a single class; provided, however, if no option receives a majority of votes cast, the option that receives the greatest number of votes cast. Abstentions and broker non-votes will not be counted as votes cast "FOR"“FOR” any alternative of a one, two or three year frequency. | |
Q:
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QUESTIONS AND ANSWERS ABOUT THE PAA ANNUAL MEETING
The following questions and answers are intended to address briefly some commonly asked questions regarding the PAA Annual Meeting. These questions and answers may not address all questions that may be important to you as a Unitholder. Please refer to the additional information contained elsewhere in this proxy statement and the documents referred to in this proxy statement.
Q:What is the purpose of these proxy materials?
A:The Board is soliciting your proxy to vote at the PAA Annual Meeting because you were a Unitholder at the close of business on March 20, 2018, the record date for the PAA Annual Meeting (the "Record Date"), and are therefore entitled to receive notice regarding the PAA Annual Meeting, and to attend and vote at the PAA Annual Meeting. This proxy statement summarizes the information that you need to know in order to cast your vote at the PAA Annual Meeting. As a Unitholder, your vote is very important and the Board strongly encourages you to exercise your right to vote. You do not need to attend the PAA Annual Meeting in person to vote your units, and we encourage you to vote even if you are unable to attend the PAA Annual Meeting. If you are unable to attend the PAA Annual Meeting in person, you may vote by Internet, by telephone or by signing and returning the attached proxy card in the envelope provided. See "How do I vote?" below.
Q:What is the recommendation of the Board?
A:The Board unanimously recommends that you vote to instruct PAA to vote the PAGP Class C shares that it owns at PAGP's annual meeting in the following manner:
•FOR the election of each of Bobby S. Shackouls and Christopher M. Temple as a Class III director of the Board to serve until the 2021 annual meeting;
•FOR the ratification of the appointment of PricewaterhouseCoopers LLP as our and PAGP's independent registered public accounting firm for the fiscal year ending December 31, 2018;
•FOR the approval, on a non-binding advisory basis, of our named executive officer compensation; and
•FOR "ONE YEAR" as the frequency with which future advisory votes to approve our named executive officer compensation should be held.
Q:When and where is the PAA Annual Meeting?
A:The PAA Annual Meeting will be held on May 15, 2018, at 9:00 a.m. Central Time, in The Senate Room, located on the 12th Floor of Two Allen Center, 1200 Smith Street, Houston, Texas 77002.
Q:Who is soliciting my proxy?
A:The Board is sending or otherwise providing you access to this proxy statement in connection with its solicitation of proxies for use at the PAA Annual Meeting.
Q:Who is entitled to vote at the PAA Annual Meeting?
A:All holders of our common units (other than AAP) and Series A preferred units at the close of business on the Record Date are entitled to receive notice of the PAA Annual Meeting and to vote the common units and Series A preferred units that they held on the Record Date at the PAA Annual Meeting.
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Each common unitholder (other than AAP) is entitled to one vote for each common unit owned on all matters to be considered at the PAA Annual Meeting. The Series A preferred unitholders will vote on an as-converted basis, with each Series A preferred unit entitled to one vote on all matters to be considered at the PAA Annual Meeting. On March 20, 2018, 441,246,656 common units and 71,090,468 Series A preferred units (a combined total of 512,337,124 common units on an as-converted basis) were issued and outstanding and entitled to vote.
Q:How do I vote?
A:If you are a Unitholder of record at the close of business on the Record Date, you may vote your units by proxy in advance of the PAA Annual Meeting by any of the following methods:
•Internet. You may visit the Internet address listed on your proxy card. Internet voting procedures have been established to verify your identity and to confirm your voting instructions. Please have your proxy card available when you visit the Internet address.
•Telephone. You may call the toll-free telephone number listed on your proxy card. Telephone voting procedures have been established to verify your identity, to allow you to provide proxy voting instructions and to confirm that your instructions were accurately recorded. Please have your proxy card available when you call.
•Mail. You may mail your completed, signed and dated proxy card in the enclosed postage-paid return envelope.
Internet and telephone voting will be available to Unitholders of record 24 hours a day until 11:59 p.m. Eastern Time on May 14, 2018, the night before the PAA Annual Meeting. If you use the Internet or the toll-free telephone number to provide your proxy voting instructions, you do not need to mail in your proxy card. If you mail in your proxy card, it must be received by PAA before the voting polls close at the PAA Annual Meeting.
You may also attend the PAA Annual Meeting and vote your units in person. Even if you plan to attend the PAA Annual Meeting, please vote your proxy in advance of the PAA Annual Meeting (by Internet, telephone or mail, as described above) as soon as possible so that your units will be represented at the PAA Annual Meeting if for any reason you are unable to attend in person.
If you are a beneficial owner of units held in street name, you must either direct your broker or other nominee as to how to vote your units, or obtain a "legal" proxy from your broker or other nominee to vote at the PAA Annual Meeting. Please refer to the voter instruction forms provided by your broker or other nominee for specific instructions on methods of voting.
Each Unitholder that attends the PAA Annual Meeting in person may be asked to present valid picture identification, such as a driver's license or passport. Please also note that if you hold your units in "street name" (that is, through a broker or other nominee), you must bring a copy of a brokerage statement reflecting your unit ownership as of the Record Date and sign in at the registration desk at the meeting. Additionally, if you attend the PAA Annual Meeting in a representative capacity for a Unitholder, you must provide evidence of your authority to attend the PAA Annual Meeting and vote on behalf of such Unitholder.
Q:What do I do if I want to change my vote after I have already voted by proxy?
A:If you are a Unitholder of record at the close of business on the Record Date, you may change your vote at any time before the voting polls close at the PAA Annual Meeting by:
•submitting a proxy with new voting instructions using the Internet or telephone voting system (please note, however, that the deadline for voting through the Internet or by telephone is 11:59 p.m. Eastern Time on May 14, 2018);
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•delivering a later-dated, executed proxy card to American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219;
•delivering a written notice of revocation of your proxy to American Stock Transfer & Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219; or
•attending the PAA Annual Meeting and voting in person. Please note that attendance at the PAA Annual Meeting will not by itself (i.e., without also voting) revoke a previously granted proxy.
If you are a beneficial owner of common or Series A preferred units held in street name and you have instructed your broker or other nominee to vote your units, you must follow the procedure your broker or other nominee provides to change those instructions. You may also vote in person at the PAA Annual Meeting if you obtain a "legal" proxy from your broker or other nominee.
Q:What is a broker non-vote?
A:The NYSE permits brokers to vote their customers' units held in "street name" on routine matters when the brokers have not received voting instructions from their customers. The NYSE does not, however, allow brokers to vote their customers' units held in street name on non-routine matters unless they have received voting instructions from their customers. In such cases, the uninstructed units for which the broker is unable to vote are called broker non-votes.
Q:What routine matters will be voted on at the PAA Annual Meeting?
A:The ratification of the independent auditor is the only routine matter on which brokers may vote in their discretion on behalf of customers who have not provided voting instructions. Broker non-votes will be counted as votes "FOR" the ratification of the independent auditor.
Q:What non-routine matters will be voted on at the PAA Annual Meeting?
A:The election of directors, the advisory vote to approve our named executive officer compensation and the advisory vote on the frequency of future advisory votes to approve our named executive officer compensation are non-routine matters. Brokers will not be allowed to vote on these matters unless they have received voting instructions from their customers. Accordingly, broker non-votes will not be counted for purposes of these matters.
Q:What constitutes a quorum?
A:The holders of a majority of the common units and Series A preferred units (on an as-converted basis) entitled to vote and represented in person or by proxy shall constitute a quorum at the PAA Annual Meeting.
Your units will be counted as present at the PAA Annual Meeting if:
•you are present and vote in person at the meeting; or
•you, or your broker if you are a beneficial owner of units held in street name, have submitted a properly executed proxy.
Proxies received but marked as abstentions and broker non-votes will be counted as present for purposes of determining the presence of a quorum.
Q:What will I be voting on?
A:The purpose of the PAA Annual Meeting is to allow the Unitholders to cast a "pass-through" vote by instructing PAA how to vote its PAGP Class C shares at PAGP's annual meeting. PAA will vote
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(or refrain from voting) its Class C shares on each matter submitted to PAGP's shareholders in the same proportion as the votes received from or withheld by the Unitholders with respect to such matter. The proposals that PAA will be voting on at PAGP's annual meeting and the required vote for PAGP's shareholders to approve such proposals is set forth above under "Information About the PAGP Annual Meeting."
Q:- Who covers the expense of the proxy solicitation?
A:
The expense of preparing, printing and mailing this proxy statement and the proxies solicited hereby will be borne by us. In addition to the use of the mail, proxies may be solicited by PAGP GP'sGP’s directors and officers, as well as by employees of GP LLC, without additional remuneration, by mail, phone, fax or in person. We will also request brokerage firms, banks, nominees, custodians and fiduciaries to forward proxy materials to the beneficial owners of our units as of the close of business on the Record Date and will provide reimbursement for the cost of forwarding the proxy materials in accordance with customary practice. Your cooperation in promptly voting your units electronically, via the Internet or by telephone, or by signing and returning the enclosed proxy card will help to avoid additional expenses. We have hired Georgeson LLC to solicit proxies for a fee of $9,000$10,500 plus reasonable expenses for additional services.
Q:
What if I do not mark a voting choice for some of the matters listed on my proxy card?
A:
If you return a signed proxy card without indicating your vote,voting choice, your units will be voted in accordance with the Board'sBoard’s recommendation for each proposal with respect to which a voting choice is not indicated.
Q:
Who will tabulate and certify the vote?
A:American Stock Transfer & Trust Company, LLC
EQ will tabulate and certify the vote, and will have a representative present at the PAA Annual Meeting toof EQ will act as the independent inspector of elections for the PAA Annual Meeting.
CORPORATE GOVERNANCE AND RELATED MATTERS
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PROPOSAL 1—ELECTION OF CLASS III DIRECTORS
AsRecent Changes
Investors have voiced a preference for certain governance practices, and since our simplification transaction in 2016 (the “Simplification Transaction”), our board and governance structure has evolved and changed in ways that we believe are meaningfully beneficial to investors. Highlights of some of the key changes are as follows:
2016
•
Replaced our dual board structure for PAA and PAGP with a unified governance structure that resulted in the Board being solely responsible for the governance of PAA and PAGP;
•
Amended our governing documents to enfranchise all shareholders of PAGP and all public common unitholders and Series A preferred unitholders of PAA by providing for shareholder elections of directors commencing in 2018 (on a staggered three-year rolling basis);
2017
•
Added Asian American director to the Board (subsequently became Chairman of the Board in January 2020);
2018
•
Held first annual meeting for the election of directors;
•
Added new independent female director to the Board;
2019
•
Amended our governing documents to require that a majority of our Board satisfy applicable stock exchange independence requirements, despite the fact that as a limited partnership we do not directlyare exempt from such requirements (nine out of 12 (75%) of our current Board members have been assessed by the Board and determined to be independent);
•
Amended our governing documents to create a strong lead independent director role in connection with the retirement of our former Chairman and the re-combination of the roles of Chairman and CEO;
•
With the assistance of our Governance Committee, initiated a comprehensive board assessment, refreshment and succession planning process that includes a periodic skills and needs assessment, the development and maintenance of a formal board succession plan and annual individual director performance evaluations;
2020
•
Added new independent director to the Board;
•
Appointed independent chairman to Compensation Committee;
•
Adopted Equity Ownership Guidelines and Clawback Policy;
2021
•
Established a new committee, the Health, Safety, Environmental and Sustainability (“HSES”) Committee, to assist the Board in its oversight of various HSES matters and facilitate the efforts of management to further strengthen our focus on sustainability and certain ESG matters;
•
Mandated that the members of all Board committees be independent despite the fact that as a limited partnership we are exempt from applicable stock exchange committee independence requirements;
•
Amended our governing documents to increase the number of directors officerssubject to public election by adding the three directors who are current or employees. former members of management;
•
Amended our governing documents to eliminate the lone remaining legacy director designation right, resulting in all Board members being subject to public election, and all non-management directors serving on the same basis in terms of rights, duties and obligations of directors; and
2022
•
Added new independent female director to the Board.
As described in the summary above, since 2016, the Board has taken numerous meaningful steps to provide PAGP shareholders and PAA unitholders the right to vote for members of the Board. At a special meeting of PAGP shareholders held in November 2016 in connection with our Simplification Transaction, PAGP shareholders overwhelmingly approved the following changes to our governing documents, among others:
•
the implementation of a unified governance structure for PAA and PAGP that resulted in the Board being solely responsible for the governance of PAGP and PAA; and
•
the division of the Board into three classes and the commencement of director elections by class starting in 2018, with the participation and enfranchisement of all shareholders of PAGP and all public common unitholders and Series A preferred unitholders of PAA.
These features distinguish us from many of our midstream master limited partnership peers. Together with the alignment of interests among investors that was created through the elimination of PAA’s incentive distribution rights in connection with the Simplification Transaction, the Board has put in place an overall governance structure that vastly improves the governance rights of our investors and which we believe is regarded by many as a structure that, together with other factors, produces a degree of alignment with our investors that places us at the top of our master limited partnership peers for the midstream sector regarding governance structure and voting rights. The Board believes that the continued implementation of the modified governance structure as approved by PAGP’s shareholders, together with the governance enhancements made in recent years, is consistent with the desires and expectations of investors in PAA and PAGP.
Our Management and Governance
Our operations and activities are managed by GP LLC, which employs our management and operational personnel (other than our Canadian personnel, who are employed by Plains Midstream Canada ULC). GP LLC is the general partner of
AAP, which is the sole member of PAA GP LLC, our general partner. PAGP is the sole member of GP LLC, and PAGP GP is the general partner of PAGP. The Board has responsibility for managing the business and affairs of PAGP, PAA and AAP. Pursuant to PAGP GP's Third Amended and Restated Limited Liability Company Agreement (the "PAGP GP LLC Agreement"), the Board consists of 12 members divided into three staggered classes (excluding those directors who are also officers), with each class serving an initial term of one, two or three years based on the expiration dates set forth below, to be followed by regular three year terms thereafter. | | | | | | |
Name
| | Class | | Expiration of
Initial Term | |
|---|
Officer Directors:
| | | | | | |
Greg L. Armstrong
| | n/a | | | n/a | |
Harry N. Pefanis
| | n/a | | | n/a | |
Willie Chiang
| | n/a | | | n/a | |
Designated Directors:
| | | | |
| |
John T. Raymond
| | I | | | 2020 | |
Robert V. Sinnott
| | II | | | 2019 | |
Oscar K. Brown
| | III | | | 2018 | |
Independent Directors:
| | | | |
| |
Everardo Goyanes
| | I | | | 2020 | |
J. Taft Symonds
| | I | | | 2020 | |
Victor Burk
| | II | | | 2019 | |
Gary R. Petersen
| | II | | | 2019 | |
Bobby S. Shackouls
| | III | | | 2018 | |
Christopher M. Temple
| | III | | | 2018 | |
Pursuant to the PAGP GP LLC Agreement, Board members are appointed as follows:
•Six of the members (three of whom must be independent directors eligible to serve on the audit committee) are eligible for election at our annual meetings upon the expiration of their initial terms, and may be removed by the Board;
•Three of the members are designated to serve on the Board by the three members of PAGP GP that currently hold board designation rights: Messrs. Raymond, Sinnott and Brown are designated by affiliates of The Energy & Minerals Group, Kayne Anderson Investment Management Inc. and Occidental Petroleum Corporation, respectively; and
•One of the members, Greg L. Armstrong, is the Chief Executive Officer, who is automatically designated as a director under the PAGP GP LLC Agreement, and two of the members, Harry N. Pefanis and Willie Chiang, are also officers of PAGP GP and were appointed by (and may be removed by) majority vote of the Board.
Any member of PAGP GP that accumulates a "qualifying interest" in AAP of at least 20% (based on the outstanding interests of AAP as of the closing of the Simplification Transactions) and does not otherwise have a PAGP GP board designation right may designate a PAGP GP director, except that there may be no more than three designated directors serving on the Board at any one time. In addition, if PAA fails to make three distributions on its Series A preferred units (whether or not consecutive), the holders of Series A preferred units will have the right to appoint a new member of
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the Board to serve until such time as all accrued and unpaid distributions on the Series A preferred units have been paid in full.
At each annual meeting, only the eligible directors of a class whose term is expiring (i.e., directors of such class who are not "designated" directors) will be up for election and, upon election, the elected directors in that class will serve for a term of three years, subject to a director's earlier resignation, death or removal. If a director is elected to the Board to fill a vacancy, that director will have the same remaining term as his or her predecessor. For additional information about the functioning and structure of our Board, please see the section of this proxy statement entitled "Corporate Governance and Related Matters" beginning on page 13.
Class III Director Nominees
The Board proposes that Messrs. Shackouls and Temple, current non-designated Class III directors, be elected to serve until the 2021 annual meeting. Messrs. Shackouls and Temple have consented to serve if elected. If either of Messrs. Shackouls or Temple becomes unavailable to serve as a director prior to the PAA Annual Meeting, the Board may designate a substitute nominee, or the Board may decide to reduce the size of the Board. In the case of a substitute nominee, the persons named as proxies will vote for the substitute nominee designated by the Board.
Bobby S. Shackouls, age 67, has served as a director of PAGP GP since January 2014. Mr. Shackouls served as Chairman of Burlington Resources Inc. from 1997 until its acquisition by ConocoPhillips in 2006, and continued to serve on the ConocoPhillips Board of Directors until his retirement in May 2011. Prior thereto, Mr. Shackouls served as President and Chief Executive Officer of Meridian Oil, Inc, a wholly owned subsidiary of Burlington Resources, from 1994-1995, and as President and Chief Executive Officer of Burlington Resources from 1995 until 2006. Mr. Shackouls currently serves as a director and member of the audit and corporate governance committees of The Kroger Co., and as a director and chairman of the compensation committee of Oasis Petroleum. He served as a director and member of the audit committee of PNGS GP LLC, the general partner of PAA Natural Gas Storage, L.P., from April 2010 through December 2013. The Board has determined that Mr. Shackouls is "independent" under applicable NYSE rules. We believe that Mr. Shackouls' extensive experience within the energy industry offers valuable perspective and, in tandem with his long history of leadership as the CEO of a public company, make him highly qualified to serve as a member of the Board.
Christopher M. Temple, age 50, has served as a director of PAGP GP since November 2016. He served as a director of PAA's general partner from May 2009 until November 2016. He is President of DelTex Capital LLC (a private investment firm) and served as Chairman of Brawler Industries, LLC, a Midland, Texas based distributor of engineered plastics used in the exploration and production of oil and gas, from September 2012 to July 2016. Mr. Temple serves on the board of HMT Tank, LLC, a provider of above-ground storage tank products and services. He also serves on the board and is chairman of the audit committee of Owl Rock Capital Corporation and Owl Rock Capital Corporation II, both of which are business development companies providing debt and equity financing to middle-market companies across a variety of industries. Mr. Temple served as the President of Vulcan Capital, the private investment group of Vulcan Inc., from May 2009 until December 2009 and as Vice President of Vulcan Capital from September 2008 to May 2009. Mr. Temple served on the board of directors and audit committee of Clear Channel Outdoor Holdings from April 2011 through May 2017. Mr. Temple previously served on the board of directors and audit committee of Charter Communications, Inc. from November 2009 through January 2011. Prior to joining Vulcan in September 2008, Mr. Temple served as a managing director at Tailwind Capital LLC from May to August 2008. Prior to joining Tailwind, Mr. Temple was a managing director at Friend Skoler & Co., Inc. from May 2005 to May 2008. From April 1996 to December 2004, Mr. Temple was a managing director at Thayer Capital Partners. Additionally, Mr. Temple was a licensed CPA serving
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clients in the energy sector with KPMG in Houston, Texas from 1989 to 1993. Mr. Temple holds a BBA, magna cum laude, from the University of Texas and an MBA from Harvard. The Board has determined that Mr. Temple is "independent" under applicable NYSE rules. Mr. Temple has a broad investment management background across a variety of business sectors, as well as experience in the energy sector. We believe that this background, along with the leadership attributes indicated by his executive experience, provide an important source of insight and perspective to the Board.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO INSTRUCT PAA TO VOTE "FOR" THE ELECTION OF EACH OF BOBBY S. SHACKOULS AND CHRISTOPHER M. TEMPLE AS A CLASS III DIRECTOR OF OUR GENERAL PARTNER'S BOARD OF DIRECTORS.
Other Directors Not Standing for Election at this Annual Meeting
Class III Designated Director (not subject to Unitholder election):
Oscar K. Brown, age 47, has served as a director of PAGP GP since August 2017. Mr. Brown is Senior Vice President, Corporate Strategy and Development, at Occidental Petroleum Corporation. In this role, he oversees Occidental's global business development functions and supports its growth path by advising and executing on new business models, commercial strategies and acquisition and divestiture opportunities. Mr. Brown joined Occidental in August 2016 from Bank of America Merrill Lynch, where he most recently served as managing director and Co-head of Americas Energy Investment Banking. He previously worked at Barclays Capital, Lehman Brothers and Credit Suisse First Boston. Mr. Brown has more than 25 years of energy banking experience in 25 countries, advising on $200 billion of M&A and financing transactions for exploration and production, integrated oil, chemical, midstream and oil field service companies. Mr. Brown serves on the boards of Houston's Alley Theatre and Junior Achievement of Southeast Texas, and is an alumnus and emeritus member of The Children's Fund. He holds a BBA degree in Finance and Marketing from the University of Texas at Austin. We believe that Mr. Brown's broad experience in the energy industry, combined with his financial and analytical background, provides the Board a distinctive and valuable perspective.
Class II Independent Directors (terms expire in 2019):
Victor Burk, age 68, has served as a director of PAGP GP since January 2014. He has been a Managing Director for Alvarez and Marsal, a privately owned professional services firm since April 2009. From 2005 to 2009, Mr. Burk was the global energy practice leader for Spencer Stuart, a privately owned executive recruiting firm. Prior to joining Spencer Stuart, Mr. Burk served as managing partner of Deloitte & Touche's global oil and natural gas group from 2002 to 2005. He began his professional career in 1972 with Arthur Andersen and served as managing partner of Arthur Andersen's global oil and natural gas group from 1989 until 2002. Mr. Burk is on the board of directors of EV Management, LLC, the ultimate general partner of EV Energy Partners, L.P., a publicly traded limited partnership engaged in the acquisition, development and production of oil and natural gas. Mr. Burk served as a director and as chairman of the audit committee of PNGS GP LLC, the general partner of PAA Natural Gas Storage, L.P., from April 2010 through December 2013. Mr. Burk also serves as a board member of the Sam Houston Area Council of the Boy Scouts of America. He received a BBA in Accounting from Stephen F. Austin State University, graduating with highest honors. The Board has determined that Mr. Burk is "independent" under applicable NYSE rules and qualifies as an "Audit Committee Financial Expert." We believe that Mr. Burk's background, spanning over 30 years of extensive public accounting and consulting in the energy industry, coupled with his demonstrated leadership abilities, brings valuable experience and insight to the Board.
Gary R. Petersen, age 71, has served as a director of PAGP GP since November 2016. He served as a director of PAA's general partner from June 2001 until November 2016. Mr. Petersen is a Managing
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Partner of EnCap Investments L.P., an investment management firm which he co-founded in 1988. He is also a director of EV Energy Partners, L.P. He had previously served as Senior Vice President and Manager of the Corporate Finance Division of the Energy Banking Group for RepublicBank Corporation. Prior to his position at RepublicBank, he was Executive Vice President and a member of the Board of Directors of Nicklos Oil & Gas Company from 1979 to 1984. He served from 1970 to 1971 in the U.S. Army as a First Lieutenant in the Finance Corps and as an Army Officer in the Army Security Agency. He is a member of the Independent Petroleum Association of America, the Houston Producers Forum and the Petroleum Club of Houston. Mr. Petersen holds BBA and MBA degrees in finance from Texas Tech University. The Board has determined that Mr. Petersen is "independent" under applicable NYSE rules. Mr. Petersen has been involved in the energy sector for a period of more than 35 years, garnering extensive knowledge of the energy sectors' various cycles, as well as the current market and industry knowledge that comes with management of approximately $18 billion of energy-related investments. In tandem with the leadership qualities evidenced by his executive background, we believe that Mr. Petersen brings numerous valuable attributes to the Board.
Class II Designated Director (not subject to Unitholder election):
Robert V. Sinnott, age 68, has served as a director of PAGP GP since October 2013. He served as a director of PAA's general partner or former general partner from September 1998 until November 2016. Mr. Sinnott is Co-Chairman of Kayne Anderson Capital Advisors, L.P. (an investment management firm). He also served as a Managing Director from 1992 to 1996, Senior Managing Director from 1996 until 2010 and Chief Executive Officer and Chief Investment Officer from 2010 until 2016. He is also President of Kayne Anderson Investment Management, Inc., the general partner of Kayne Anderson Capital Advisors, L.P. Mr. Sinnott served as a director of Kayne Anderson Energy Development Company from 2006 through June 2013. He was Vice President and Senior Securities Officer of the Investment Banking Division of Citibank from 1986 to 1992, and previously held positions with United Energy Resources, a pipeline company, and Bank of America in its oil and gas finance department. Mr. Sinnott serves as vice-chairman of the board of directors of Kayne Anderson Acquisition Corp., a blank check company that intends to acquire and operate a business in the energy industry. He also serves as a director of California Resources Corporation. Mr. Sinnott received a BA from the University of Virginia and an MBA from Harvard. Mr. Sinnott's extensive investment management background includes his current role of overseeing approximately $16 billion of energy-related investments. Coupled with his direct involvement in the energy sector, spanning more than 30 years, the breadth of his current market and industry knowledge is enhanced by the depth of his knowledge of the various cycles in the energy sector. We believe that as a result of his background and knowledge, as well as the attributes of leadership demonstrated by his executive experience, Mr. Sinnott brings substantial experience and skill to the Board.
Class I Independent Directors (terms expire in 2020):
Everardo Goyanes, age 73, has served as a director of PAGP GP since October 2013. He served as a director of PAA's general partner or former general partner from May 1999 until November 2016. He is Founder of Ex Cathedra LLC (a consulting firm). Mr. Goyanes served as Chairman of Liberty Natural Resources from April 2009 until August 2011. From May 2000 to April 2009, he was President and Chief Executive Officer of Liberty Energy Holdings, LLC (an energy investment firm). From 1999 to May 2000, he was a financial consultant specializing in natural resources. From 1989 to 1999, he was Managing Director of the Natural Resources Group of ING Barings Furman Selz (a banking firm). He was a financial consultant from 1987 to 1989 and was Vice President—Finance of Forest Oil Corporation from 1983 to 1987. From 1967 to 1982, Mr. Goyanes served in various financial and management capacities at Chase Bank, where his major emphasis was international and corporate finance to large independent and major oil companies. Mr. Goyanes sits on the board of Fifth Avenue Real Assets 3 LLC and Fifth Avenue Real Assets 4 LLC, funds advised by Bessemer Trust Company N.A.
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Mr. Goyanes received a BA in Economics from Cornell University and a Masters degree in Finance (honors) from Babson Institute. The Board has determined that Mr. Goyanes is "independent" under applicable NYSE rules and qualifies as an "Audit Committee Financial Expert." Mr. Goyanes' qualifications as an Audit Committee Financial Expert are supplemented by extensive experience comprising direct involvement in the energy sector over a span of more than 30 years. We believe that this experience, coupled with the leadership qualities demonstrated by his executive background bring important experience and skill to the Board.
J. Taft Symonds, age 78, has served as a director of PAGP GP since November 2016. He served as a director of PAA's general partner from June 2001 until November 2016. Mr. Symonds is Chairman of the Board of Symonds Investment Company, Inc. (a private investment firm). From 1978 to 2004 he was Chairman of the Board and Chief Financial Officer of Maurice Pincoffs Company, Inc. (an international marketing firm). Mr. Symonds has a background in both investment and commercial banking, including merchant banking in New York, London and Hong Kong with Paine Webber, Robert Fleming Group and Banque de la Societe Financiere Europeenne. He was Chairman of the Houston Arboretum and Nature Center and currently serves as a director of Howard Supply Company LLC. Mr. Symonds previously served as a director of Tetra Technologies Inc., Schilling Robotics LLC and Free Flow Wines LLC, where he served on the audit committee. Mr. Symonds received a BA from Stanford University and an MBA from Harvard. The Board has determined that Mr. Symonds is "independent" under applicable NYSE rules and qualifies as an "Audit Committee Financial Expert." In addition to his qualifications as an Audit Committee Financial Expert, Mr. Symonds has a broad background in both commercial and investment banking, as well as investment management, all with a heavy emphasis on the energy sector. We believe that Mr. Symonds' background offers to the Board a distinct and valuable knowledge base representative of both the capital and physical markets and refined by the leadership qualities evident from his executive experience.
Class I Designated Director (not subject to Unitholder election):
John T. Raymond, age 47, has served as a director of PAGP GP since October 2013. He served as a director of PAA's general partner from December 2010 until November 2016. Mr. Raymond is an owner and founder of The Energy & Minerals Group, which is the management company for a series of specialized private equity funds. EMG was founded in 2006 and focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. As of September 30, 2017, EMG has approximately $15.8 billion of regulatory assets under management and approximately $10.5 billion in commitments have been allocated across the energy sector since inception. Previous to that time, Mr. Raymond held leadership positions with various energy companies, including President and CEO of Plains Resources Inc. (the predecessor entity for Vulcan Energy), President and Chief Operating Officer of Plains Exploration and Production Company and Director of Development for Kinder Morgan, Inc. Mr. Raymond has been a direct or indirect owner of PAA's general partner since 2001 and served on the board of PAA's general partner from 2001 to 2005. He serves on numerous other boards, including NGL Energy Holdings LLC, the general partner of NGL Energy Partners, L.P., Tallgrass MLP GP, LLC, the general partner of Tallgrass Energy Partners, L.P. and Tallgrass Management, LLC, the general partner of Tallgrass Energy GP, L.P. Mr. Raymond received a BSM degree from the A.B. Freeman School of Business at Tulane University with dual concentrations in finance and accounting. We believe that Mr. Raymond's experience with investment in and management of a variety of upstream and midstream assets and operations provides a valuable resource to the Board.
Officer Directors (not classified and not subject to Unitholder election):
Greg L. Armstrong, age 59, has served as Chairman of the Board and Chief Executive Officer of PAGP GP since July 2013 and as Chairman of the Board and Chief Executive Officer of GP LLC since
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PAA's formation in 1998. He also served as a director of PAA's general partner or former general partner from PAA's formation until November 2016. In addition, he was President, Chief Executive Officer and director of Plains Resources Inc. from 1992 to May 2001. He previously served Plains Resources as: President and Chief Operating Officer from October to December 1992; Executive Vice President and Chief Financial Officer from June to October 1992; Senior Vice President and Chief Financial Officer from 1991 to 1992; Vice President and Chief Financial Officer from 1984 to 1991; Corporate Secretary from 1981 to 1988; and Treasurer from 1984 to 1987. Mr. Armstrong is a director and Deputy Chairman of the Federal Reserve Bank of Dallas, and a director of National Oilwell Varco, Inc. Mr. Armstrong is also a member of the advisory board of the Maguire Energy Institute at the Cox School of Business at Southern Methodist University, and is Chairman of the National Petroleum Council.
Harry N. Pefanis, age 60, has served as a Director of PAGP GP since February 2017 and as President and Chief Commercial Officer of GP LLC since January 2018. He served as President and Chief Operating Officer from our formation in 1998 through December 2017. He was also a director of our former general partner. In addition, he was Executive Vice President—Midstream of Plains Resources from May 1998 to May 2001. He previously served Plains Resources as: Senior Vice President from February 1996 until May 1998; Vice President—Products Marketing from 1988 to February 1996; Manager of Products Marketing from 1987 to 1988; and Special Assistant for Corporate Planning from 1983 to 1987. Mr. Pefanis was also President of several former midstream subsidiaries of Plains Resources until our formation. Mr. Pefanis is a director of Settoon Towing. Mr. Pefanis also serves as President and Chief Commercial Officer of PAGP GP and served as President and Chief Operating Officer of PAGP GP from July 2013 through December 2017.
Willie Chiang, age 57, has served as a Director of PAGP GP since February 2017 and as Executive Vice President and Chief Operating Officer of GP LLC since January 2018. He served as Executive Vice President and Chief Operating Officer (U.S.) from August 2015 through December 2017. Prior to joining Plains, Mr. Chiang served as Executive Vice President—Operations for Occidental Petroleum Corporation from 2012 until 2015. From 1996 until 2012, he served in various positions at ConocoPhillips, including most recently as Senior Vice President—Refining, Marketing, Transportation and Commercial. Mr. Chiang also serves as Executive Vice President and Chief Operating Officer of PAGP GP and served as Executive Vice President and Chief Operating Officer (U.S.) of PAGP GP from August 2015 through December 2017.
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CORPORATE GOVERNANCE AND RELATED MATTERS
Our Management and Governance
As a limited partnership, we do not directly have directors, officers or employees. Our operations and activities are managed by GP LLC, which employs our management and operational personnel (other than our Canadian personnel, who are employed by Plains Midstream Canada ULC). GP LLC is the general partner of AAP, which is the sole member of our general partner. PAGP is the sole member of GP LLC, and PAGP GP is the general partner of PAGP. PAGP does not directly own any operating assets or have any operating activities apart from those conducted by PAA. The Board of PAGP GP has responsibility for managing the business and affairs of PAGP PAA and AAP.
PAA.
Our Unitholders are limited partners and do not directly or indirectly participate in our management or operation. Unlike holders of common stock in a corporation, our Unitholders have only limited voting rights on matters affecting our business or governance, subject in all cases to any specific unitholder rights contained in our partnership agreement. As a result, priorIn connection with the Simplification Transaction completed in November 2016, we expanded the voting rights of our Unitholders to include the election of directors and, in 2018, we have not historically held regularbegan holding annual meetings for this purpose.
Our Ownership and Voting Structure
The Simplification Transaction completed in November 2016 resulted in a structure that includes two public companies (PAA and PAGP) governed by a single Board. The Board is located at PAGP’s general partner, PAGP GP. The Simplification Transaction also provided that the equity holders of unitholdersboth PAA and PAGP would be afforded the right to vote in the election of directors.
PAGP has three classes of voting equity, as follows:
•
PAGP Class A shares, which are listed on Nasdaq;
•
PAGP Class B shares, which represent non-economic limited partner voting interests and are privately held by certain legacy investors and management; and
•
PAGP Class C shares, which are also non-economic limited partner voting interests. The PAGP Class C shares are held by PAA solely for the purpose of electingcreating a mechanism through which PAA equity holders (other than Plains AAP) can participate in the election of directors or soliciting approval of any other routine matters.PAGP GP.
With respect to the election of directors, the PAGP Class A, Class B and Class C shares vote together as a single class. PAGP equity holders vote directly at the PAGP Annual Meeting. PAA equity holders (which include holders of PAA’s publicly held Common units and Series A preferred units) vote indirectly by instructing PAA how to vote the Class C shares that it owns on their behalf at the PAGP Annual Meeting. In addition,order to receive voting instructions from PAA voting equity holders, PAA holds its annual meeting immediately prior to the PAGP Annual Meeting. The voting instructions received at the PAA annual meeting are “passed through” by PAA by virtue of its voting of the Class C shares at the PAGP Annual Meeting in accordance with such instructions.
On a combined basis, as of the Record Date, the voting rights of PAGP and PAA equity holders in connection with the election of directors were allocated as follows:
| | | Voting Class | | | | Percentage of
Overall Voting
Rights | | | | Number of
Voting
Shares/Units | | |
| | | PAGP Class A Shares (Nasdaq: PAGP) | | | | | | 25.5% | | | | | 197.3 million | | |
| | | PAGP Class B Shares | | | | | | 4.6% | | | | | 35.4 million | | |
| | | PAGP Class C Shares | | | | | | | | | | | | | |
| | | •
On Behalf of PAA Common Unitholders (excluding Plains AAP) (Nasdaq: PAA) | | | | | | 60.7% | | | | | 468.4 million | | |
| | | •
On Behalf of PAA Series A Preferred Unitholders | | | | | | 9.2% | | | | | 71.1 million | | |
| | | TOTAL | | | | | | 100.0% | | | | | 772.2 million | | |
The following chart further illustrates our partnership agreement limits any fiduciary duties our general partner might owe to our Unitholders. As a general partner, our general partner is liable for allownership structure as of the Record Date:
Considering the overall consolidated ownership and voting structure of PAGP and PAA, the following table lists who we believe are the top 10 holders of our debts (tovoting securities based on combined holdings of PAGP Class A Shares, PAGP Class B Shares, PAA Common Units (excluding Plains AAP) and PAA Series A Preferred Units. These holdings are based on Schedule 13F filings as of December 31, 2023 and other publicly available information; the extenttable below does not paid fromtake into account the holdings of investors who are not required to file a Schedule 13F or who do not otherwise publicly disclose their holdings. It should be noted that Schedule 13F requires certain institutional investment managers to report holdings over which they exercise investment discretion (i.e., the power to buy or sell securities); such institutional investment managers may or may not also have voting discretion with respect to such holdings. (Holdings in 000s)
| | | Name | | | | PAGP
Class A
Shares | | | | PAGP
Class B
Shares | | | | PAA
Common
Units | | | | PAA
Series A
Preferred
Units | | | | Total
Holdings | | | | Percent of
Consolidated
Voting
Structure | | |
| | | ALPS Advisors | | | | | | 783 | | | | | | | — | | | | | | | 60,732 | | | | | | | — | | | | | | | 61,515 | | | | | | | 8.0% | | | |
| | | EMG Investments/John Raymond | | | | | | 273 | | | | | | | 11,459 | | | | | | | 1,603 | | | | | | | 20,376 | | | | | | | 33,710 | | | | | | | 4.4% | | | |
| | | Invesco Advisors | | | | | | 3,135 | | | | | | | — | | | | | | | 29,916 | | | | | | | — | | | | | | | 33,052 | | | | | | | 4.3% | | | |
| | | Tortoise Capital Advisors | | | | | | 11,538 | | | | | | | — | | | | | | | 18,351 | | | | | | | — | | | | | | | 29,889 | | | | | | | 3.9% | | | |
| | | Harvest Fund Advisors | | | | | | 2,810 | | | | | | | — | | | | | | | 23,220 | | | | | | | — | | | | | | | 26,030 | | | | | | | 3.4% | | | |
| | | EnCap | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 25,357 | | | | | | | 25,357 | | | | | | | 3.3% | | | |
| | | Goldman Sachs Asset Management | | | | | | 6,547 | | | | | | | — | | | | | | | 15,941 | | | | | | | — | | | | | | | 22,487 | | | | | | | 2.9% | | | |
| | | Energy Income Partners | | | | | | 11,312 | | | | | | | — | | | | | | | 4,385 | | | | | | | — | | | | | | | 15,697 | | | | | | | 2.0% | | | |
| | | ClearBridge Investments | | | | | | 8,332 | | | | | | | — | | | | | | | 6,704 | | | | | | | — | | | | | | | 15,036 | | | | | | | 2.0% | | | |
| | | Mirae Asset Global Investments | | | | | | 1,369 | | | | | | | — | | | | | | | 12,908 | | | | | | | — | | | | | | | 14,277 | | | | | | | 1.8% | | | |
See “Security Ownership of Certain Beneficial Owners and Management” beginning on page 60 for additional information regarding beneficial ownership of our assets), except for indebtedness or other obligations that are made specifically non-recourse to it. Our general partner has the sole discretion to incur indebtedness or other obligations onsecurities, including ownership by our behalf on a non-recourse basis to the general partner. Our general partner has in the past exercised such discretion, in most instances involving payment liability,Directors and intends to exercise such discretion in the future.executive officers.
Board Leadership Structure and Role in Risk Oversight
Our CEO also
Mr. Chiang serves as Chairman of the Board.Board and as CEO, and Mr. Shackouls serves as Lead Director. Our governing documents require that for so long as the Board Chair and CEO roles are held by the same person, one of our independent directors must serve as the Lead Director, and such governing documents also clearly delineate the respective responsibilities of the Board Chair and the Lead Director. The Lead Director is responsible for, among other things, developing and communicating the agenda for, and presiding at, meetings of the non-management directors, collaborating with the Board Chair on Board meeting agendas, working with the Board Chair to establish parameters for the quality, amount and timeliness of the information flow between management and the Board, and generally acting as a liaison between the non-management directors and the Board Chair. The Board has no set policy with respect to the separation of the offices of chairmanBoard Chair and CEO; rather that relationshipthe Board believes it is currently definedin the best interests of PAA and governed byPAGP for the PAGP GP LLC AgreementBoard to review ongoing conditions and circumstances and make an appropriate determination to separate, or maintain as combined, the employment agreementCEO and Board Chair roles at the time a new CEO succeeds the current CEO, or upon a significant change in circumstances. The Board Chair/CEO regularly communicates with the CEO, which currently require coincidence ofLead Director to make sure the offices. However, pursuantBoard is receiving the information it needs and has the opportunity to provide feedback and input to management, in each case as required for the terms ofBoard to discharge its oversight role.
Board Role in Risk Oversight
With respect to the PAGP GP LLC Agreement, if and when our Board elects a successor to our current CEO, by majority vote our Board may determine to separate the offices of CEO and Chairman of the Board. We do not have a lead independent director. The management of enterprise-level risk (ELR) may be defined as(“ELR”), which is the process of identifying, managing and monitoring events that present opportunities and risks with respect to the operation of our business and the creation of value for our unitholders. Theunitholders, the Board has delegated primary responsibility to management the primary responsibility for ELR management, while the Board has retained responsibility forretaining oversight of management in that regard.responsibility. Management evaluates short-, medium- and long-term risks on an ongoing basis and provides a formal ELR assessment to the Board at least once every year.
year and provides updates on other areas of potential risk on at least a quarterly basis.
We believe that our Board leadership and committee structure supports the Board’s risk oversight function by facilitating open and regular communication between management and the directors, which allows informed oversight of management’s processes for identifying and managing significant risks and their impact on PAA’s business. The Board’s various committees (Audit, Governance, Compensation and HSES) assist the Board with respect to its oversight of risks related to the specific areas of focus for each committee.
Non-Management Executive Sessions and UnitholderShareholder Communications
Non-management directors meet in executive session in connection with each regular Board meeting. On a rotating basis (determined alphabeticallyThese sessions are presided over by last name), one of the non-management directors acts as presiding director at each such regularly scheduled executive session.Lead Director. As circumstances warrant, non-management directors may also meet in executive sessions of special meetings of the Board. Interested partiesUnitholders can communicate directly with non-management directors regarding PAA’s business and affairs by mail in care of the General Counsel and Secretary or in care of the Vice President of Internal Audit at Plains All American Pipeline, L.P., 333 Clay Street, Suite 1600, Houston, Texas 77002. Such communications should specify the intended recipient or recipients. Commercial solicitations or communications will not be forwarded.disregarded.
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Independence Determinations and Audit Committee
Because we are a limited partnership, the listing standards of the NYSENasdaq do not require that we or our general partner have a majority of independent directors on the Board. Nonetheless, the PAGP GP LLC Agreement was amended in 2019 to require that our Board or that we establish or maintainhave a nominating or compensation committeemajority of the Board. Wedirectors who are however, required to have an audit committee consisting of at least three members, all of whom are required to be "independent"independent as defined in applicable NYSENasdaq and SEC rules. To be considered independent under NYSENasdaq listing standards, our Board must determine that a director has no material relationship with us other thanthat would interfere with the exercise of independent judgment in carrying out his or her responsibilities as a director. The standardsapplicable Nasdaq and SEC rules specify the criteria by which the independence of directors willmust be determined, including guidelines for directors and their immediate family members with respect to employment or affiliation with us or with our independent public accountants.
We have an audit committee The Board has assessed the independence of the nine directors who are not current or former members of management (Messrs. Burk, McCarthy, Petersen, Raymond, Shackouls, Temple and Ziemba, Ms. DeSanctis and Ms. Pruner) and has concluded that all of such directors are independent under applicable Nasdaq and SEC standards.
Audit Committee
Our Audit Committee reviews our external financial reporting, engages our independent auditors, and reviews the adequacy of our internal accounting controls.controls and discusses with management our major financial risk exposures and steps management has taken to monitor and control such exposures. The charter of our audit committeeAudit Committee is available on our website. See "—“— Meetings and Other Information"Information” for information on how to access or obtain copies of this charter. The Board has determined that each member of our audit committeeAudit Committee (Messrs. Burk Goyanes(chair) and Symonds)Ziemba, Ms. DeSanctis and Ms. Pruner) is (i) "independent"independent under applicable NYSENasdaq and SEC rules, and (ii) financially literate. The Board has also determined that each of Mr. Burk and Ms. Pruner qualifies as an "AuditAudit Committee Financial Expert" as that term is defined in Item 407 of Regulation S-K. None of the members of our audit committee has any relationships with any of PAGP GP, PAGP or us, other than as a director, shareholder or unitholder.
Compensation Committee; Compensation Committee Interlocks and Insider Participation
Although not required by NYSENasdaq listing standards, we have a compensation committeeCompensation Committee that reviews and makes recommendations to the Board regarding the compensation for theour executive officers and administers our long-term equity compensationincentive plans for officers and key employees. The charter of our compensation committee is available on our website. See "—Meetings and Other Information" for information on how to access or obtain copies of this charter. The compensation committee currently consists of Messrs. Petersen, Raymond and Sinnott. Under applicable stock exchange rules, none of the members of our compensation committee is required to be "independent." The compensation committee has the sole authority to retain any compensation consultants to be used to assist the committee, but did not retain any consultants in 2017. The compensation committeeCompensation Committee has delegated limited authority to the CEO to administer our long-term incentive plans with respect to employees other thanand non-Section 16 officers below the Senior Vice President level. The charter of our Compensation Committee is available on our website. See “— Meetings and Other Information” for information on how to access or obtain copies of this charter. The Compensation Committee currently consists of Messrs. Raymond (chair), Petersen, Shackouls and Temple. Under applicable Nasdaq rules, none of the members of our Compensation Committee are required to be independent; however, the charter of our Compensation Committee requires that all members of the committee be
independent and the Board has determined that all of the current members of the Compensation Committee are independent under applicable Nasdaq and SEC standards. The Compensation Committee has the sole authority to retain any compensation consultants to assist the committee. Since 2019, the Compensation Committee has engaged Meridian Compensation Partners, LLC (“Meridian”) to conduct independent annual reviews and benchmark studies of our executive officers.compensation program and practices.
During 2017,2023, none of the members of the compensation committeeCompensation Committee was an officer or employee of ours or any of our subsidiaries, or served as an officer of any company with respect to which any of our executive officers served on such company'scompany’s board of directors. In addition, none of the members of the compensation committeeCompensation Committee are former employees of ours or any of our subsidiaries. Mr. Raymond is associated with The Energy & Minerals Group (“EMG”) and Mr. Petersen is associated with EnCap Mr. Raymond is associatedInvestments LP (“EnCap”). We have ordinary course business relationships with entities affiliated with EMG and EnCap; however, the Board has determined that these relationships do not impact Mr. Sinnott is associated with Kayne Anderson and its affiliates. We have relationships with these entities.Raymond’s or Mr. Petersen’s independence. See "Certain“Certain Relationships and Related Transactions."”
Governance and Other Committees
Committee
Although not required by NYSENasdaq listing standards, we also have a governance committeeGovernance Committee that periodically reviews our governance guidelines.structure, policies and principles, oversees the Board’s annual self-assessment and committee and individual director evaluation processes, and assists with succession planning and other governance-related activities, including identifying and assessing director nominees. See “Proposal 1 — Election of Class III Directors — Director and Nominee Experience and Qualifications” for additional information regarding activities of our Governance Committee. The charter of our governance committeeGovernance Committee is available on our website. See "—“— Meetings and Other Information"Information” for information on how to access or obtain copies of this charter. The governance committeeGovernance Committee currently consists of Messrs. Shackouls (chair), McCarthy and Petersen Shackouls and Symonds.Ms. Pruner. Under applicable stock exchangeNasdaq rules, none of the members of our governance committee is
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Governance Committee are required to be "independent." With respectindependent; however, the charter of our Governance Committee requires that all members of the committee be independent and the Board has determined that all of the current members of the Governance Committee are independent under applicable Nasdaq and SEC standards.
HSES Committee
In February 2021, the Board established the HSES Committee to any director nominations to be made byassist the Board in connectionits evaluation and oversight of our (i) management of HSES matters, including compliance with director elections or inapplicable laws and regulations; (ii) management of systems and plans to protect the eventhealth and safety of a vacancy inemployees, contractors, customers, the three required independent director seatsenvironment, the communities where we operate, our assets, and our reputation; and (iii) plans to adjust to HSES trends and related risks to more effectively achieve our long-term business and sustainability objectives. Through the discharge of its oversight responsibilities, the HSES Committee facilitates the efforts of management to further strengthen our focus on sustainability and certain ESG matters. The charter of our HSES Committee is available on our website. See “— Meetings and Other Information” for information on how to access or obtain copies of this charter. The HSES Committee currently consists of Messrs. Ziemba (chair), McCarthy and Temple and Ms. DeSanctis. The Board in each casehas determined that all of the current members of the HSES Committee are independent under applicable Nasdaq and SEC standards.
Meetings and Other Information
During 2023, our Board had four meetings, our Audit Committee had nine meetings, our Compensation Committee had two meetings, our Governance Committee had one meeting and our HSES Committee had five meetings. In addition, members of our Compensation Committee and Governance Committee held numerous conference calls and discussions throughout the year on various compensation and governance-related matters. All directors have access to the extent requested by the Chairmanmembers of management, and a substantial amount of information transfer and informal communication occurs between meetings. In 2023, all of our directors attended all meetings of the Board and applicable committees of the governance committee will assist in identifying and screening potential candidates. Upon request,Board on which the governance committee is also available to assist in identifying and screening potential candidates for any vacancy with respect to directorsdirector served, other than independent directorsone director who missed one committee meeting.
Board members are encouraged, but not required, to attend our annual meetings; eight Board members attended our annual meeting in 2023.
All of our standing committees have charters. Our committee charters and governance guidelines, as well as our Code of Business Conduct (which describes our Core Values) and our Code of Ethics for Senior Financial Officers (which applies to our principal executive officer, principal financial officer and principal accounting officer), are available under the Structure and Governance tab in the Investor Relations section of our Internet website at http://www.plains.com. We intend to disclose any amendment to or directors designated by a designating member. The governance committee will base any recommendations on an assessmentwaiver of the skills, experienceCode of Ethics for Senior Financial Officers and characteristicsany waiver of the candidateour Code of Business Conduct on behalf of an executive officer or director either on our Internet website or in the context of the needs of the Board. The governance committee does not have a policy with regard to the consideration of diversity in identifying director nominees; therefore, diversity may or may not be considered in connection with the assessment process. As a minimum requirement for the three required independent Board seats, any candidate must be "independent" and qualify for servicean 8-K filing. We regularly post important information on the audit committee under applicable SEC and NYSE rules and the PAGP GP LLC Agreement. In addition, our website, including information regarding our sustainability efforts.
Conflicts Committee/Fiduciary Duties
Our partnership agreement allows for the establishment or activation of a conflicts committee as circumstances warrant to review conflicts of interest between us and our general partner or its owners. Such committee will typically consist of a minimum of two independent, non-employee members of the Board. Our partnership agreement provides that any matters approved by the conflicts committee will be conclusively deemed to be fair and reasonable to us, approved by all of our partners, and not a breach by our general partner of any duties owed to us or our unitholders.Unitholders. See "Certain“Certain Relationships and Related Transactions—Transactions — Review, Approval or Ratification of Transactions with Related Persons."”
Our partnership agreement limits any fiduciary duties our general partner might owe to our Unitholders. Our general partner is liable for all of our debts (to the extent not paid from our assets), except for indebtedness or other obligations that are made specifically non-recourse to it. Our general partner has the sole discretion to incur indebtedness or other obligations on our behalf on a non-recourse basis to the general partner. Our general partner has in the past exercised such discretion, in most instances involving payment liability, and may exercise such discretion again in the future.
PROPOSAL 1 — ELECTION OF CLASS III DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF GREG ARMSTRONG, JOHN RAYMOND AND BOBBY SHACKOULS TO SERVE AS A CLASS III DIRECTOR ON OUR GENERAL PARTNER’S BOARD OF DIRECTORS UNTIL THE 2027 ANNUAL MEETING.
Board Structure
General Overview and Other Information
DuringBoard Makeup.
Our Board has responsibility for managing the last fiscal year,business and affairs of PAGP and PAA. The Board currently has 12 members, including the CEO, who currently serves as Chairman of the Board. As contemplated by our governing documents, because the roles of CEO and Board had seven meetings,Chair are held by the same person, the Board has designated one of our audit committee had eight meetingsindependent directors (Bobby Shackouls) to serve as Lead Director. Our governing documents also require that at least a majority of directors must meet the independence requirements of the national securities exchange on which the securities of PAA and our compensation committee had two meetings.PAGP are listed (currently Nasdaq). The Board is divided into three staggered classes such that the terms for the directors within each class expire on a rotating three-year basis, as set forth below. The Board (excluding directors whose terms are expiring) and, subject to certain ownership and notice requirements, holders of common units or Series A preferred units have the right to nominate individuals to stand for election at an annual meeting. For a description of such ownership and notice requirements, see “Director Nominations and Unitholder Proposals for the 2025 Annual Meeting” on page 74.
Individuals elected at an annual meeting will serve for a term of three years, subject to their earlier resignation, death or removal. If an individual is elected to the Board to fill a vacancy, that director will have the same remaining term as his or her predecessor. All directors have accessstanding for election at the 2024 PAA and PAGP Annual Meetings were nominated by the Board (excluding the vote of the directors whose terms are expiring); no other nominations were received.
| | | | | | | Independent | | | | Audit
Committee | | | | Compensation
Committee | | | | Governance
Committee | | | | HSES
Committee | | | | Board Chair | | | | Lead
Director | | |
| | | Class I Directors
(Term expires 2026) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Willie Chiang,
Chairman of the
Board and CEO | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Ellen DeSanctis | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Alexandra D. Pruner | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Lawrence M. Ziemba | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Class II Directors
(Term expires 2025) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Victor Burk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Kevin S. McCarthy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Harry N. Pefanis,
President | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Gary R. Petersen | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | Independent | | | | Audit
Committee | | | | Compensation
Committee | | | | Governance
Committee | | | | HSES
Committee | | | | Board Chair | | | | Lead
Director | | |
| | | Class III Directors
(Term expires 2024) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Greg L. Armstrong,
Senior Advisor to
the CEO (former Chairman of the
Board and CEO)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | John T. Raymond* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Bobby S. Shackouls* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Christopher M. Temple
(Not standing for re-election) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | * | | | Nominated by the Board for election at the 2024 Annual Meeting. | |
| | | | | Determined by the Board to be independent under applicable Nasdaq and SEC rules. | |
| | | | | Company Employee — independence has not been assessed by the Board. | |
| | | | | Committee Member | |
| | | | | Committee Chair | |
| | | | | Board Chair | |
| | | | | Lead Director | |
Director and Nominee Experience and Qualifications
With respect to membersany director nominations made by the Board in connection with annual director elections or in the event of management,a vacancy on the Board, in each case to the extent requested by the Chairman of the Board, the Governance Committee assists in identifying and a substantial amountscreening potential candidates. The Governance Committee makes its recommendations based on an assessment of information transferthe skills, experience and informal communication occurs between meetings. Nonecharacteristics of the candidate in the context of the needs of the Board. It is the policy and practice of the Governance Committee and the Board to consider diversity (including diversity of gender, race and ethnicity) in connection with the process of identifying and assessing potential Board candidates.
Our board assessment, refreshment and succession planning process involves (i) the periodic assessment of the skills, background and experience of our directors, attended fewer than 75%which is used to identify potential enhancement areas relative to the ideal mix of skills, background and experience for our board, (ii) the development and maintenance of a board succession plan that identifies near and longer-term actions and includes succession plans for each board committee, and (iii) the annual evaluation by each director of the aggregate numberperformance of meetingsevery other director in a variety of categories that directly impact overall board performance and effectiveness. Board succession planning efforts and individual director evaluations are updated on a regular basis with assistance and oversight of the Governance Committee. The Governance Committee also oversees the Board’s annual self-assessment process as well as the process by which the Board assesses the effectiveness of its various committees.
In evaluating director nominees and applicable committeesin reviewing the qualifications and experience of the directors continuing in office, the Governance Committee and Board on which the director served. As discussed above, GP LLC manages our operationsconsider a variety of factors, including independence, financial literacy, personal and activities,professional accomplishments, diversity and GP LLC is managed by or under the directionexperience in light of the Board, whose members, prior to 2018, were either designated by certain members of PAGP GP or appointed by voteneeds of the Board. Accordingly, unlike holdersFor incumbent directors, factors also include past performance on the Board. The Board has determined that it is beneficial to have individuals on the Board with the following skills, experiences, and characteristics (See the Director Skills Matrix below for an overview of common stock inthe skills, experiences and characteristics of our current Board members):
| | | •
Public Company Experience (Officer/Director) | | | | •
Industry Experience (Upstream/Midstream/Downstream) | | |
| | | •
Finance/Accounting | | | | •
Private Equity | | |
| | | •
Business Development/Strategy/Commercial | | | | •
Diversity (Gender/Race/Ethnicity) | | |
| | | •
Legal/Governance/Government Relations | | | | •
International | | |
| | | •
Operations/Engineering/Construction/Technical | | | | •
Cybersecurity/IT | | |
| | | | | | | •
Energy Evolution | | |
Director Skills Matrix
| | | | | | | Armstrong | | | | Burk | | | | Chiang | | | | DeSanctis | | | | McCarthy | | | | Pefanis | | | | Petersen | | | | Pruner | | | | Raymond | | | | Shackouls | | | | Temple | | | | Ziemba | | |
| | | Public Company Experience | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Finance/Accounting | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Business Development/
Strategy/Commercial | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Legal/Governance/
Government Relations | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Operations/Engineering/
Construction/
Technical | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | |
| | | Industry Experience | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Private Equity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | |
| | | Diversity | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | International | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | |
| | | Cybersecurity/IT | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | |
| | | Energy Evolution | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | ✓ | | | |
Board Diversity Matrix
The following information is provided pursuant to Nasdaq Listing Rule 5605(f) and 5606:
| | | Board Diversity Matrix (As of March 25, 2024) | | |
| | | Total Number of Directors | | | | 12 | | |
| | | | | | | Female | | | | Male | | | | Non-Binary | | | | Did Not
Disclose | | |
| | | Part I: Gender Identity | | |
| | | Directors | | | | 2 | | | | 10 | | | | | | | | | | |
| | | Part II: Demographic Background | | |
| | | African American or Black | | | | | | | | | | | | | | | | | | |
| | | Alaskan Native or Native American | | | | | | | | | | | | | | | | | | |
| | | Asian | | | | | | | | 1 | | | | | | | | | | |
| | | Hispanic or Latinx | | | | | | | | | | | | | | | | | | |
| | | Native Hawaiian or Pacific Islander | | | | | | | | | | | | | | | | | | |
| | | White | | | | 2 | | | | 9 | | | | | | | | | | |
| | | Two or More Races or Ethnicities | | | | | | | | | | | | | | | | | | |
| | | LGBTQ+ | | | | | | |
| | | Did Not Disclose Demographic Background | | | | | | |
Class III Directors Standing for Election at the 2024 PAA and PAGP Annual Meetings
The Board has nominated Messrs. Armstrong, Raymond and Shackouls, current Class III directors, for election at the 2024 PAA and PAGP Annual Meetings. Mr. Temple, a corporation, our unitholders have only limited voting rights on matters affecting our businesscurrent Class III director, is not standing for re-election at the 2024 PAA and PAGP Annual Meetings. Each nominee has consented to serve if elected and, if elected, will serve until the 2027 annual meeting, subject to their earlier resignation, death or governance, subject in all casesremoval. If any of the nominees becomes unavailable to any specific unitholder rights contained in our partnership agreement. Asserve as a result,director prior to 2018, we have not historically held regular annual meetingsthe 2024 PAA and PAGP Annual Meetings, the Board may designate a substitute nominee, or the Board may decide to reduce the size of unitholdersthe Board. In the case of a substitute nominee, the persons named as proxies will vote for the purpose of electing directors or soliciting approval of any other routine or non-routine matters. All of our standing committees have charters. Our committee charterssubstitute nominee designated by the Board.
| | | GREG L. ARMSTRONG Not Independent PAGP/PAA Director since 1998 Former Chairman and CEO Committees: None | | | | Greg L. Armstrong, age 65, has served as a director of PAGP GP since 2013. He has also served as Senior Advisor to the CEO since January 1, 2020. Mr. Armstrong served as Chairman of the Board of PAGP GP from July 2013 through December 31, 2019 and as Chief Executive Officer of PAGP GP from July 2013 until his retirement from such position in October 2018. He also served as Chief Executive Officer of GP LLC from PAA’s formation in 1998 until his retirement from that position in October 2018. He served as a director of PAA’s general partner or former general partner from PAA’s formation until November 2016 when the Board of PAGP GP assumed responsibility for PAA in addition to PAGP and Plains AAP. In addition, he was President, Chief Executive Officer and director of Plains Resources Inc. from 1992 to May 2001 and served in various roles of increasing responsibility from 1981 to 1992. Mr. Armstrong served as a director of the Federal Reserve Bank of Dallas from 2015 to 2021, retiring as Chair at the end of 2021. Mr. Armstrong also serves as a director of the Memorial Hermann Health System and NOV, Inc. Mr. Armstrong is also a member of the advisory board of the Maguire Energy Institute at the Cox School of Business at Southern Methodist University, the Baker Institute and Veriten, and is a past Chairman of the National Petroleum Council. Mr. Armstrong’s experience with PAA since its formation, including as former Chairman and CEO, and his long-time involvement in the energy industry, provide the Board with invaluable insight and perspective. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
International | | |
| | | JOHN T. RAYMOND Independent PAGP/PAA Director
since 2010 Committees: Compensation (chair) | | | | John T. Raymond, age 53, has served as a director of PAGP GP since October 2013. He served as a director of PAA’s general partner from December 2010 until November 2016. Mr. Raymond is the founder and majority owner of EMG, which is the management company for a series of specialized private equity funds. EMG was founded in 2006 and focuses on investing across various facets of the global natural resource industry including the upstream and midstream segments of the energy complex. As of September 30, 2023, EMG had approximately $14 billion of assets under management and approximately $12 billion in commitments have been allocated across the energy sector since inception. From 1998 until founding EMG, Mr. Raymond held various executive leadership positions with several energy companies, including Plains Resources Inc. (the publicly traded predecessor company to Vulcan Energy), Plains Exploration and Production Company, Kinder Morgan, | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
Private Equity | | |
| | | | | | | Inc. and Ocean Energy, Inc. From 1992 to 1998, he was a Vice President with Howard Weil Labouisse Friedrichs, Inc. Mr. Raymond has been a direct or indirect owner of PAA’s general partner since 2001 and served on the board of PAA’s general partner from 2001 to 2005. He serves on numerous other private company boards and currently serves on the board of NGL Energy Holdings LLC, the general partner of NGL Energy Partners, L.P., and ESM Acquisition Corp. Mr. Raymond is also co-founder and portfolio manager of EMG Advisors. Mr. Raymond received a BSM degree from the A.B. Freeman School of Business at Tulane University with dual concentrations in finance and accounting and currently sits on the board of the Business School Council. He also serves as a director on the board of the American Heart Association, as a member of the MD Anderson Cancer Center Board of Visitors and is a member of YPO. The Board has determined that Mr. Raymond is “independent” under applicable Nasdaq and SEC rules. We believe that Mr. Raymond’s experience with investment in and management of a variety of upstream and midstream assets and operations provides a valuable resource to the Board. | | | | •
International •
Energy Evolution | | |
| | | BOBBY S. SHACKOULS Lead Director Independent PAGP/PAA Director
since 2010 Committees: Governance (chair) Compensation | | | | Bobby S. Shackouls, age 73, has served as a director of PAGP GP since January 2014 and as Lead Director since January 2020. Mr. Shackouls served as Chairman of Burlington Resources Inc. from 1997 until its acquisition by ConocoPhillips in 2006, and continued to serve on the ConocoPhillips Board of Directors until his retirement in May 2011. Prior thereto, Mr. Shackouls served as President and Chief Executive Officer of Meridian Oil, Inc., a wholly owned subsidiary of Burlington Resources, from 1994 to 1995, and as President and Chief Executive Officer of Burlington Resources from 1995 until 2006. Mr. Shackouls served as a director of The Kroger Co. from 1999 until January 2021, as a director of Oasis Petroleum from 2012 until November 2020, and as a director of Quintana Energy Services from January 2019 until July 2020. He served as a director and member of the audit committee of PNGS GP LLC, the general partner of PAA Natural Gas Storage, L.P., from April 2010 through December 2013. The Board has determined that Mr. Shackouls is “independent” under applicable Nasdaq and SEC rules. We believe that Mr. Shackouls’ extensive experience within the energy industry offers valuable perspective and, in tandem with his long history of leadership as the CEO of a public company, make him highly qualified to serve as a member of the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
International | | |
Other Directors (Directors with terms expiring after the 2024 PAA and governance guidelines, as well as our Code of Business Conduct and our Code of Ethics for Senior Financial Officers (which applies to our principal executive officer, principal financial officer and principal accounting officer), are available under the Structure and Governance tab under "Company Information"PAGP Annual Meetings)
Class I Directors (terms expire in the Investor Relations section of our Internet website athttp://www.plainsallamerican.com. We intend to disclose any amendment to or waiver of the Code of Ethics for Senior Financial Officers and any waiver of our Code of Business Conduct on behalf of an executive officer or director either on our Internet website or2026):
| | | WILLIE CHIANG Not Independent PAGP/PAA Director since 2017 Chairman and CEO Committees: None | | | | Willie Chiang, age 63, has served as a director of PAGP GP since February 2017, as Chief Executive Officer of PAGP GP and GP LLC since October 2018 and as Chairman of the Board since January 2020. He served as Executive Vice President and Chief Operating Officer of PAGP GP and GP LLC from January 2018 until October 2018. He also served as Executive Vice President and Chief Operating Officer (U.S.) of PAGP GP and GP LLC from August 2015 through December 2017. Prior to joining Plains, Mr. Chiang served as Executive Vice President — Operations for Occidental Petroleum Corporation from 2012 until 2015. From 1996 until 2012, he served in various positions at ConocoPhillips, including most recently as Senior Vice President — Refining, Marketing, Transportation and Commercial. He previously served on the boards of DCP Midstream and Chevron Phillips Chemical. He serves as chair of the United Way of Greater Houston and is on the board of Performing Arts Houston. Mr. Chiang is a member of the Energy Advisory Council of the Federal Reserve Bank of Dallas and is also involved in a number of industry organizations including the American Petroleum Institute (API), American Fuel & Petrochemical Manufacturers (AFPM) and National Petroleum Council. He received a BS in Mechanical Engineering from South Dakota School of Mines and Technology and completed the Advanced Management Program at the University of Pennsylvania. Mr. Chiang’s role as CEO and his broad experience in the energy industry, together with his leadership capabilities and strategic focus, make him highly qualified to serve on the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
Diversity •
International •
Energy Evolution | | |
| | | ELLEN R. DESANCTIS Independent PAGP/PAA Director
since 2022 Committees: Audit HSES | | | | Ellen R. DeSanctis, age 67, has served as a director of PAGP GP since August 2022. She recently served as Senior Vice President of Corporate Relations for ConocoPhillips, where she worked from 2012 until her retirement in 2022. In that capacity, she was responsible for investor relations, corporate communications and charitable programs. Prior to ConocoPhillips, Ms. DeSanctis had responsibility for similar functions, as well as strategic planning roles, for a number of upstream energy companies, including Petrohawk Energy Corporation, Rosetta Resources, Burlington Resources, Vastar Resources and ARCO. Ms. DeSanctis spent her early career as an engineer for Shell Oil Company. Ms. DeSanctis serves on the board of SilverBow Resources, Inc. She also serves as a member of the board of directors of St. Agnes Academy in Houston and served as past chair of the Girl Scouts of San Jacinto Council. Ms. DeSanctis holds a BA in Geological and Geophysical Sciences from Princeton University and an MBA from UCLA. The Board has determined that Ms. DeSanctis is “independent” under applicable Nasdaq and SEC rules. Ms. DeSanctis’s diverse, strategic and stakeholder-focused background brings a valuable perspective to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
Diversity •
International | | |
| | | ALEXANDRA D. PRUNER Independent PAGP/PAA Director since 2018 Committees: Audit Governance | | | | Alexandra D. Pruner, age 62, has served as a director of PAGP GP since December 2018. Ms. Pruner has served as a Senior Advisor of Perella Weinberg Partners (“PWP”), a global independent advisory firm providing strategic and financial advice and asset-management services, and its energy division, Tudor, Pickering, Holt & Co., since December 2018. She previously served as Partner and Chief Financial Officer of PWP from December 2016 through November 2018. She served as CFO and a member of the Management Committee at Tudor, Pickering, Holt & Co. from the firm’s founding in 2007 until its combination with PWP in 2016. Ms. Pruner served as a director and member of the audit committee of Anadarko Petroleum Corporation from December 2018 until August 2019. She has also served as a director of NRG Energy, Inc. since October 2019, as chair of the board of Malta Inc. since April 2022, and as a director of Encino Acquisition Partners, LLC since November 2019 and as chair of the board since December 2021. She is the founder and a board member of Women’s Global Leadership Conference in Energy & Technology, is an Emeritus Director of the Amegy Bank Development Board, and is Chair of Brown University’s President’s Advisory Council on the Economics Department. She also serves on the Board of the Houston Zoo and the Texas Medical Center, among other volunteer efforts. Ms. Pruner holds a BA in Economics from Brown University. The Board has determined that Ms. Pruner is “independent” under applicable Nasdaq and SEC rules and qualifies as an “Audit Committee Financial Expert.” Ms. Pruner’s extensive experience in the energy industry from a variety of perspectives, along with her strong finance and investment banking background, make her uniquely qualified to serve on the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Industry Experience •
Diversity •
International •
Cybersecurity/IT •
Energy Evolution | | |
| | | LAWRENCE M.
ZIEMBA Independent PAGP/PAA Director
since 2020 Committees: Audit HSES (chair) | | | | Lawrence M. Ziemba, age 68, has served as a director of PAGP GP since January 2020. Mr. Ziemba served as Executive Vice President, Refining, and on the executive committee of Phillips 66 from May 2012 until his retirement in December 2017. From 2001 to May 2012, he served in various downstream positions with ConocoPhillips, including President, Global Refining, and chairman of WRB LLC, a downstream joint venture with Cenovus, a Canadian oil producer. He also held various positions of increasing responsibility with Tosco/Unocal from 1977 to 2001. He has held a number of industry leadership positions, including with API and AFPM. Mr. Ziemba has served on the board of directors of PBF Energy since 2023. From 2020 through 2022 he served as a director of PBF Logistics GP LLC. He also served on the board of trustees of Duchesne Academy in Houston. Mr. Ziemba received a BS in mechanical engineering from the University of Illinois — Champaign and an MBA from the University of Chicago. The Board has determined that Mr. Ziemba is “independent” under applicable Nasdaq and SEC rules. We believe that his operations, technical and project management expertise, coupled with his business sense and understanding of strategic positioning in the energy space, adds a diverse operating and downstream perspective to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
International •
Cybersecurity/IT •
Energy Evolution | | |
Class II Directors (terms expire in an 8-K filing.2025):
| | | VICTOR BURK Independent PAGP/PAA Director
since 2010 Committees: Audit (chair) | | | | Victor Burk, age 74, has served as a director of PAGP GP since January 2014. He is a Senior Advisor for Alvarez and Marsal, a privately owned professional services firm, where he served as Managing Director from April 2009 through December 2022. From 2005 to 2009, Mr. Burk was the global energy practice leader for Spencer Stuart, a privately owned executive recruiting firm. Prior to joining Spencer Stuart, Mr. Burk served as managing partner of Deloitte & Touche’s global oil and natural gas group from 2002 to 2005. He began his professional career in 1972 with Arthur Andersen and served as managing partner of Arthur Andersen’s global oil and natural gas group from 1989 until 2002. Mr. Burk served on the board of directors and audit committee of EV Energy Partners, L.P. from September 2006 until June 2018. Mr. Burk served as a director and as chair of the audit committee of PNGS GP LLC, the general partner of PAA Natural Gas Storage, L.P., from April 2010 through December 2013. Mr. Burk also serves as a board member of the Sam Houston Area Council of the Boy Scouts of America. He received a BBA in Accounting from Stephen F. Austin State University, graduating with highest honors. The Board has determined that Mr. Burk is “independent” under applicable Nasdaq and SEC rules and qualifies as an “Audit Committee Financial Expert.” We believe that Mr. Burk’s background, spanning over 30 years of extensive public accounting and consulting experience in the energy industry, coupled with his demonstrated leadership abilities, bring valuable experience and insight to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Industry Experience •
International | | |
| | | KEVIN S. MCCARTHY Independent PAGP/PAA Director
since 2020 Committees: Governance HSES | | | | Kevin S. McCarthy, age 64, has served as a director of PAGP GP since October 2020. He served as Vice Chairman at Kayne Anderson from 2019 to 2023. During his 19-year tenure at Kayne Anderson, he co-founded the firm’s energy infrastructure securities activities, and served as CEO and Chairman of the Board of Directors for Kayne Anderson’s closed-end funds. Prior to joining Kayne Anderson in 2004, Mr. McCarthy was global head of energy investment banking at UBS Securities LLC and held similar positions at PaineWebber Incorporated and Dean Witter Reynolds. Mr. McCarthy serves as a director of Kinetik Holdings Inc. and Chord Energy Corporation, and previously served as a director of Whiting Petroleum Corporation (Chairman), Altus Midstream Company, Range Resources Corporation, ONEOK, Inc., Emerge Energy Services LP and K-Sea Transportation Partners L.P. He also sits on the board of directors of the Gladney Fund, a Fort Worth based adoption agency. Mr. McCarthy earned a BA in economics and geology from Amherst College and an MBA in Finance from the Wharton School at the University of Pennsylvania. The Board has determined that Mr. McCarthy is “independent” under applicable Nasdaq and SEC rules. Mr. McCarthy’s extensive investment management background and involvement in the energy sector, along with the breadth and depth of his market and industry knowledge, brings substantial experience, insight and skill to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Industry Experience •
Private Equity | | |
| | | HARRY N. PEFANIS Not Independent PAGP/PAA Director
since 2017 President Committees: None | | | | Harry N. Pefanis, age 66, has served as a director of PAGP GP since February 2017 and as President of PAGP GP and GP LLC since March 2021. He previously served as President and Chief Commercial Officer of PAGP GP and GP LLC from January 2018 until March 2021. He served as President and Chief Operating Officer of GP LLC from PAA’s formation in 1998 through December 2017, and as President and Chief Operating Officer of PAGP GP from July 2013 through December 2017. He was also a director of PAA’s former general partner. In addition, he was Executive Vice President — Midstream of Plains Resources from May 1998 to May 2001. He previously served Plains Resources as: Senior Vice President from February 1996 until May 1998; Vice President — Products Marketing from 1988 to February 1996; Manager of Products Marketing from 1987 to 1988; and Special Assistant for Corporate Planning from 1983 to 1987. Mr. Pefanis was also President of several former midstream subsidiaries of Plains Resources prior to PAA’s formation. Mr. Pefanis served as a director of Oasis Midstream Partners, L.P. from July 2018 until February 2022. He is also a director of the Memorial Hermann Foundation and a trustee of the University of Oklahoma Foundation. Mr. Pefanis’s involvement with PAA since its formation and his considerable operational, commercial, accounting and financial experience brings important and valuable skills to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Operations/Engineering/ Construction/Technical •
Industry Experience •
International | | |
| | | GARY R. PETERSEN Independent PAGP/PAA Director
since 2001 Committees: Compensation Governance | | | | Gary R. Petersen, age 77, has served as a director of PAGP GP since November 2016. He served as a director of PAA’s general partner from June 2001 until November 2016. Mr. Petersen is a Managing Partner of EnCap, an investment management firm which he co-founded in 1988. He also served as a director of EV Energy Partners, L.P. from September 2006 until June 2018. He had previously served as Senior Vice President and Manager of the Corporate Finance Division of the Energy Banking Group for RepublicBank Corporation. Prior to his position at RepublicBank, he was Executive Vice President and a member of the Board of Directors of Nicklos Oil & Gas Company from 1979 to 1984. He served from 1970 to 1971 in the U.S. Army as a First Lieutenant in the Finance Corps and as an Army Officer in the Army Security Agency. He is a member of the Independent Petroleum Association of America, the Houston Producers Forum and the Petroleum Club of Houston. Mr. Petersen is a director of the Memorial Hermann Health System and the Houston Museum of Natural Science. He also sits on the board of trustees of The Council on Recovery. Mr. Petersen holds BBA and MBA degrees in finance from Texas Tech University. The Board has determined that Mr. Petersen is “independent” under applicable Nasdaq and SEC rules. Mr. Petersen has been involved in the energy sector for over 35 years, garnering extensive knowledge of the energy sectors’ various cycles, as well as the current market and industry knowledge that comes with management of approximately $18 billion of energy-related investments. In tandem with the leadership qualities evidenced by his executive background, we believe that Mr. Petersen brings numerous valuable attributes to the Board. | | | | Board Qualifications: •
Public Company Experience •
Finance/Accounting •
Business Development/ Strategy/Commercial •
Legal/Governance/ Government Relations •
Industry Experience •
Private Equity •
International | | |
The following table sets forth certain information with respect to our executive officers (for purposes of Item 401(b) of Regulation S-K) as of the date of this proxy statement. Executive officers are appointed by the Board. There is no family relationship between any executive officer and director.
| | | Name | | | | Age
(as of 3/25/24) | | | | Position | | |
Name
| | Age (as of
3/20/18) | | Position |
|---|
Greg L. Armstrong*
| | 59Willie Chiang* | | | | | | 63 | | | | | Chairman of the Board and Chief Executive Officer and Director | | |
| | Harry N. Pefanis* | | | | | | 66 | | | | | President and Director | | |
| | | Al Swanson | | | | | | 60 | | President, Chief Commercial Officer and Director |
Willie Chiang*
| | 57 | | Executive Vice President and Chief OperatingFinancial Officer and Director | | |
| | Richard K. McGee | | 57 | | | | 63 | | | | | Executive Vice President, General Counsel and Secretary | | |
Daniel J. Nerbonne
| | 61Chris R. Chandler | | Executive Vice President—Operations and Engineering |
Al Swanson
| | 54 | | 52 | | | | | Executive Vice President and Chief FinancialOperating Officer | | |
| | Jeremy L. Goebel | | | | | | 46 | | | | | Executive Vice President and Chief Commercial Officer | | |
| | | Chris Herbold | | 45 | | | | 51 | | | | | Senior Vice President—AccountingPresident, Finance and Chief Accounting Officer | | |
Biographical information for Messrs. Armstrong,Chiang and Pefanis and Chiang is located under Proposal 1—1 — Election of Class III Directors.
Al Swanson has served as Executive Vice President and Chief Financial Officer of GP LLC since February 2011. He previously served as Senior Vice President and Chief Financial Officer from November 2008 through February 2011, as Senior Vice President — Finance from August 2008 until November 2008 and as Senior Vice President — Finance and Treasurer from August 2007 until August 2008. He served as Vice President — Finance and Treasurer from August 2005 to August 2007, as Vice President and Treasurer from February 2004 to August 2005 and as Treasurer from May 2001 to February 2004. In addition, he held finance related positions at Plains Resources including Treasurer from February 2001 to May 2001 and Director of Treasury from November 2000 to February 2001. Prior to joining Plains Resources, he served as Treasurer of Santa Fe Snyder Corporation from 1999 to October 2000 and in various capacities at Snyder Oil Corporation including Director of Corporate Finance from 1998, Controller — SOCO Offshore, Inc. from 1997, and Accounting Manager from 1992. Mr. Swanson began his career with Apache Corporation in 1986 serving in internal audit and accounting. Mr. Swanson also serves as Executive Vice President and Chief Financial Officer of PAGP GP.
Richard K. McGee has served as Executive Vice President, General Counsel and Secretary of GP LLC since February 2013. He served as Vice President, General Counsel and Secretary from March 2012 until February 2013 and served as Vice President and Deputy General Counsel from August 2011 through March 2012. He also served as Vice President—President — Legal and Business Development of PAA'sPAA’s natural gas storage business from September 2009 through March 2012. From January 1999 to July 2009, he was employed by Duke Energy, serving as President of Duke Energy International from October 2001 through July 2009 and serving as general counsel of Duke Energy Services from January 1999 through September 2001. He previously spent 12 years at Vinson & Elkins L.L.P., where he was a partner with a focus on acquisitions, divestitures and development work for various clients in the energy industry. Mr. McGee also serves as Executive Vice President, General Counsel and Secretary of PAGP GP.Daniel J. Nerbonne has served as Executive Vice President—Operations and Engineering since August 2016. He served as Senior Vice President—Engineering from February 2013 until August 2016 and as Vice President—Engineering from February 2005 until February 2013. Prior to joining Plains, Mr. Nerbonne was General Manager of Portfolio Projects for Shell Oil Products US and served in various capacities with Shell Pipeline Company or its predecessors from 1998 to January 2005. From 1980 to 1998, Mr. Nerbonne held numerous positions of increasing responsibility in engineering, operations, and business development, including Vice President of Business Development with Texaco Trading and Transportation or its affiliates. Mr. Nerbonne also serves as Executive Vice President—Operations and Engineering of PAGP GP.
Al Swanson
Chris R. Chandler has served as Executive Vice President and Chief FinancialOperating Officer of GP LLC since February 2011.March 2019. He previously served as Senior Vice President — Strategic Planning and Chief Financial Officer from November 2008 through February 2011, as Senior Vice President—Finance from August 2008Acquisitions since joining Plains in May 2018 until November 2008 and as Senior Vice President—Finance and Treasurer from August 2007 until August 2008. He served as Vice President—Finance and Treasurer from August 2005 to August 2007, as Vice President and Treasurer from February 2004 to August 2005 and as Treasurer from May 2001 to February 2004. In addition, he held finance related positions at Plains Resources including Treasurer from February 2001 to May 2001 and DirectorMarch 2019. Mr. Chandler has more than 25 years of Treasury from November 2000 to February 2001.energy industry experience. Prior to joining Plains, Resources, he served in a number of leadership roles at Phillips 66, most recently as Treasurer of Santa Fe Snyder Corporation from 1999 to October 2000General Manager — Corporate Strategy, and previously as General Manager — Midstream Commercial and Business Development, as well as numerous leadership roles in various capacities at Snyder Oil Corporation including Director of Corporate Finance from 1998, Controller—SOCO Offshore, Inc. from 1997, and Accounting Manager from 1992.refining. Mr. Swanson began his career with Apache Corporation in 1986 serving in internal audit and accounting. Mr. SwansonChandler also serves as Executive Vice President and Chief FinancialOperating Officer of PAGP GP.
Jeremy L. Goebel has served as Executive Vice President—President and Chief Commercial Officer since March 2021. He previously served as Executive Vice President — Commercial of GP LLC from March 2019 until March 2021, as Senior Group Vice President — Commercial from May 2018 to March 2019, as Senior Vice President — Acquisitions and Strategic Planning from April 2017 until May 2018, as Vice President — Acquisitions and Strategic Planning from July 2015 until April 2017, as Assistant Vice President — Lease Supply from July 2014 until July 2015, and as Managing Director — Acquisitions and Strategic Planning from January 2013 until July 2014. Prior to joining Plains in 2013, he was employed by Simmons & Company International. Mr. Goebel has over 20 years of energy and investment banking experience. Mr. Goebel also serves as Executive Vice President and Chief Commercial Officer of PAGP GP.
Chris Herbold has served as Senior Vice President, Finance and Chief Accounting Officer of GP LLC since August 2021, and served as Senior Vice President and Chief Accounting Officer of GP LLC from August 2018 until August 2021. He served as Vice President — Accounting and Chief Accounting Officer sincefrom August 2010.2010 until August 2018. He served as Controller of PAA from 2008 until August 2010. He previously served as Director of Operational Accounting from 2006 to 2008, Director of Financial Reporting and Accounting from 2003 to 2006 and Manager of SEC and Financial Reporting from 2002 to 2003. Prior to joining PAA in April 2002, Mr. Herbold spent seven years working for the accounting firm Arthur Andersen LLP. Mr. Herbold also serves as Senior Vice President—AccountingPresident, Finance and Chief Accounting Officer of PAGP GP.
Compensation Committee Report
The compensation committeeCompensation Committee reviews and makes recommendations to the Board regarding the compensation for our executive officers and directors. In fulfilling its oversight responsibilities, the compensation committeeCompensation Committee reviewed and discussed the following compensation discussionCompensation Discussion and analysisAnalysis (sometimes referred to as “CD&A”) with management and, based on such review and discussion, has recommended to the Board that the compensation discussionCompensation Discussion and analysisAnalysis be included in this proxy statement.
John T. Raymond, Chair
Gary R. Petersen
Bobby S. Shackouls
Christopher M. Temple | | |
| | Robert V. Sinnott,Chairman |
| | Gary R. Petersen |
| | John T. Raymond |
Compensation Discussion and Analysis
Background
All of our officers and employees are employed by GP LLC. Under our partnership agreement, we are required to reimburse our general partner and its affiliates for all employment-related costs, including compensation for
For 2023, our Named Executive Officers (defined in the Summary Compensation Table below). For 2017, our Named Executive Officers(sometimes referred to as “NEOs”) include our CEO, our President, our CFO, and the three most highly compensated executive officers (other than our CEO and CFO), as well as one additional individual. Therefore, as used throughout this. Our NEOs for 2023 include the following individuals:
| | | Named Executive Officer | | | | Title | | |
| | | Willie Chiang | | | | Chairman and Chief Executive Officer | | |
| | | Harry Pefanis | | | | President | | |
| | | Al Swanson | | | | EVP and Chief Financial Officer | | |
| | | Richard McGee | | | | EVP, General Counsel and Secretary | | |
| | | Chris Chandler | | | | EVP and Chief Operating Officer | | |
| | | Jeremy Goebel | | | | EVP and Chief Commercial Officer | | |
Executive Compensation
DiscussionGeneral Philosophy and
Analysis, the term Named Executive Officers includes Messrs. Armstrong, Pefanis, Chiang, Swanson, Nerbonne and vonBerg.Objectives
Since our inception, we have employed aApproach
Our executive compensation philosophy that emphasizes pay for performance, at both on an individual and entity level, and places the majoritya significant portion of each Named Executive Officer'sOfficer’s compensation at risk. We believe this approach aligns the interests of our executive officers with the interests of our equity holders and at the same time allows us to attract, motivate and retain key executives. The table below highlights some of the key features of our executive compensation program:
| | | What We Do | | | | What We Don’t Do | | |
| | | ✓
We emphasize pay for performance ✓
Over 80% of target NEO compensation is variable and/or at risk ✓
Our annual bonus program is 100% performance based with payout based on a formulaic framework ✓
50% of NEO long-term equity incentives are performance based, requiring performance over a multi-year period ✓
Compensation program design mitigates against excessive risk taking ✓
Independent compensation consultant ✓
Regular investor engagement on compensation and other matters ✓
Equity Ownership Guidelines for executive officers and directors ✓
Clawback Policy that applies to incentive-based and other compensation | | | | No guaranteed bonuses No excise tax gross ups Directors and officers are prohibited from hedging or pledging company securities Our equity plan prohibits backdating or repricing of options No significant perquisites for our executive officers No single-trigger change in control protections in our long-term incentive plan grants
| | |
Unitholder Engagement
| | | 98% Say on Pay
Support in 2023 | | |
Our investor relations team and members of our senior management team regularly meet with investors and other stakeholders to seek input and feedback on a wide range of topics, including executive compensation. On an annual basis, as part of our ongoing investor outreach and engagement process, we actively solicit feedback from investors regarding our executive compensation programs and other important matters, including our evolving governance practices and sustainability efforts. In connection with this process during 2023, we reached out to more than 20 of our largest unaffiliated investors representing, as of December 31, 2023, approximately 40% of our outstanding voting equity (excluding executive officers and Directors who collectively hold approximately 10% of our outstanding voting equity).
| | | Outreach in 2023 to
unaffiliated holders
of ~40% of total
outstanding equity | | |
Overall, the design of our 2023 executive compensation program did not materially change relative to 2022. The Compensation Committee and our management team are constantly reviewing the design of our programs to ensure that they remain aligned with investor interests and evolving best practices. We will continue to seek direct input from our investors as part of that process.
Our Commitment to Pay for Performance
Our executive compensation philosophy is focused on a long-term pay for performance culture designed to attract and retain key management talent in a competitive industry and market. Our program combines relatively low base pay (as a percentage of total rewards) with higher variable, at-risk compensation opportunities based on objective and transparent performance requirements. As demonstrated in the graphic below, in 2023, at target, approximately 89% of our CEO’s compensation and approximately 82% of our other NEOs’ compensation consisted of at-risk compensation.
Majority of NEO Pay At-Risk and Performance-Based
*
The “Other NEOs” graphic excludes Mr. Pefanis. Mr. Pefanis is a co-founder and substantial equity owner and for the last several years has requested to not participate in the long-term incentive program, which results in an at-risk compensation percentage for Mr. Pefanis of 67%.
At-risk compensation is typically tied to the achievement of one or more performance metrics that measure value creation over both the near and longer term, as well as service period requirements. The primary short-term financial metrics are annual earnings and cash flow levels as represented by Adjusted EBITDA1 attributable to PAA and distributable cash flow (“DCF”) per common unit equivalent (“CUE”). The primary long-term measureperformance measures included in our equity incentive grants are DCF per CUE over a 3-year period (with a leverage modifier) and relative TSR over a 3-year period. We believe our short- and long-term performance metrics are consistent with our overall financial strategy of maintaining financial flexibility and generating attractive unitholder returns.
1
Earnings before interest, taxes, depreciation and amortization (including our performance is our abilityproportionate share of depreciation and amortization, including write-downs related to sustaincanceled projects and increase our distributable cash flowimpairments, of unconsolidated entities), gains and make quarterly distributions to our unitholders. losses on asset sales and asset impairments, goodwill impairment losses and gains or losses on and impairments of investments in unconsolidated entities, adjusted for certain selected items impacting comparability.
We believe our pay-for-performance approach aligns the interests of our executive officers with thatthe interests of our equity holders, and atholders. We also believe that our pay-for-performance approach helps us achieve the same time enables us to maintain a lower leveloverall objectives of base overhead in the event our operating and financial performance is below expectations. Our executive compensation is designed to program, which are to:
•
attract and retain individuals with the background and skills necessary to successfully execute our business model in a demanding environment,environment;
•
pay for performance by tying a majority of NEO pay (58% for the CEO and 55% on average for the other NEOs) to motivate those individuals to reachachievement of specific near-term and long-term goals that drive long-term growth in a way that aligns their interestunitholder value; and
•
directly align our NEOs with that of our unitholders through the use of equity incentives and to reward success in reaching such goals. encouragement of long-term unit ownership.
Compensation Elements and Objectives
We use three primary elements of compensation in combination with market competitive benefits to fulfill that design—achieve our executive compensation program objectives — salary, annual cash bonusincentive awards and long-term equity incentive awards. Cash bonusesOur mix of compensation elements is designed to reinforce near-term and equity incentives (as opposed to salary) represent the performance driven elements. They are also flexible in applicationlong-term business and can be tailored to meet our objectives. The determination of specific individuals' cash bonuses is based on their relative contribution to achieving or exceeding annual goals and/or performance against opportunities and challenges and the determination of specific individuals' long-term incentive awards is based on their expected contribution in respect of longer term performance objectives. We do not maintain a defined benefit or pension plan for our employees, including our Named Executive Officers, as we believe such plans primarily reward longevity and not performance. We provide a basic benefits package generally to all employees, including our Named Executive Officers, which includes a 401(k) plan and health, disability and life insurance. In instances considered necessary for the execution of their job responsibilities, we have also reimbursed certain of our Named Executive Officers and other employees for club dues and similar expenses; however, club dues reimbursements for Named Executive Officers were discontinued in 2017. We consider these benefits and reimbursements to be typical of other employers, and we do not believe they are distinctive of our compensation program.
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Elements of Compensation
Salary. We do not "benchmark" our salary or bonus amounts. In practice, we believe our salaries are generally competitive with the narrower universe of large-cap master limited partnerships, but are moderate relative to the broad spectrum of energy industry competitors for similar talent.
Cash Bonuses. Our cash bonuses include annual discretionary bonuses in which all of our Named Executive Officers potentially participate, as well as a quarterly bonus program in which Mr. vonBerg participates.
Long-Term Incentive Awards. The primary long-term measure of our performance is our ability to sustain and increase our distributable cash flow and make quarterly distributions to our unitholders. Historically, we have generally used performance-indexed phantom unit grants issued under our Long-Term Incentive Plans to encouragestrategic objectives, recognize and reward timely achievement of targeted distribution levelsperformance, motivate long-term value creation and align the long-term interests of our Named Executive Officersexecutives with those of our unitholders. These grants require minimum service periods as further described belowequity holders. The following table sets forth the key elements of our 2023 executive compensation program:
| | | What We Pay | | | | Why We Pay It | | | | Key Features | | |
| | | Base Salary | | | | Attract and retain high-performing executives by providing a secure and appropriate level of base pay | | | | •
Foundational element of our compensation program; short-term and long-term incentive compensation components are based on a percentage of base salary •
Subject to adjustment periodically based in part on competitive market data •
Smallest component of NEO compensation | | |
| | | Annual Cash Incentive Awards | | | | Motivate and reward near-term performance and retention | | | | •
100% performance based •
Encourages achievement of objective and transparent annual business, ESG and individual goals established at beginning of year •
Payout based on formulaic framework | | |
| | | Long-Term Equity Incentive Awards | | | | Motivate and reward long-term performance and retention and create additional alignment with investors | | | | •
Long-term equity incentives are 50% performance-based and 50% time-based •
Performance-based awards earned based upon performance over cumulative three-year period •
Performance metrics include relative TSR with negative TSR modifier, and DCF/CUE with leverage modifier (potential downward adjustment only) •
Distribution Equivalent Rights (“DERs”) associated with long-term equity awards provide additional potential motivation and alignment with other equity holders | | |
| | | What We Pay | | | | Why We Pay It | | | | Key Features | | |
| | | Employee Benefits | | | | Attract and retain talent | | | | •
Customary health and welfare benefits for all U.S. employees, including 401(k) Plan •
No defined benefit or pension plans •
No significant perquisites | | |
2023 Independent Benchmark Study of Executive Compensation
With respect to our 2023 executive compensation program, our Compensation Committee engaged Meridian to provide independent counsel, including a benchmarking review of our executive officer compensation. In connection with its engagement of Meridian, the Compensation Committee evaluated and confirmed Meridian’s independence relative to existing PAA or PAGP relationships or potential conflicts, in orderline with Nasdaq requirements.
Business consolidation and unique operating models create some challenges in identifying directly comparable peer companies. Accordingly, we take a broad view of comparability to encourage long-term retention. A phantom unit is the rightinclude organizations that are similar to receive, upon the satisfactionours and that we believe we compete with for attracting and retaining executive talent. Our primary compensation benchmarking peer group for 2023 included 11 companies across a wide range of vesting criteria specifiedrevenues, asset values and enterprise values that are primarily engaged in the grant, a common unit (or cash equivalent). We do not use options as a form of incentive compensation. Unlike "vesting" of an option, vesting of a phantom unit results in delivery of a common unit or cash of equivalent value as opposed to a right to exercise. Terms of historical phantom unit grants have varied, but generally phantom units vest upon the later of achievement of performance threshold levels and continued employment for periods ranging from two to five years. These performance thresholds have historically been generally consistent with our targeted range for distribution growth and provide for the Named Executive Officers to receive distributions on phantom units prior to vestingmidstream business in the underlying common units (referredUnited States (the entities in the benchmarking peer group are listed in the table below).
Meridian utilized publicly available information to as distribution equivalent rights, or "DERs"). In 2007,analyze compensation practices of the owners of AAP authorizedcompanies in the creation of Class B units of AAP ("AAP Management Units"), each of which represents a profits interest in AAP, and authorized the compensation committee to issue grants of AAP Management Units to create additionalbenchmarking peer group, including how pay is divided among long-term incentives, for our management designed to attract talentannual incentives and encourage retention over an extended periodbase pay. Meridian also compared the amount and structure of time.
The AAP Management Units are subject to restrictions on transfer and generally become incrementally "earned" (entitled to receive distributions) upon achievement of certain performance thresholds that are aligned with the interests of our common unitholders.
To encourage retention following achievement of the applicable performance benchmarks, AAP retained a call right to purchase any earned AAP Management Units at a discount to fair market value that is generally exercisable upon the termination of a holder's employment with GP LLC and its affiliates (other than termination under certain circumstances such as a termination without cause or by the employeecompensation for good reason) prior to certain stated dates. If a holder of an AAP Management Unit remains employed past such designated date (or prior to such date such holder is terminated without cause or quits for good reason), any earned units are no longer subject to the call right and are deemed to have "vested." As of March 20, 2018, all AAP Management Units previously granted to Messrs. Armstrong, Pefanis, Swanson and vonBerg and a portion of the AAP Management Units previously granted to Mr. Nerbonne had vested and have been converted as described below and are no longer outstanding. As of March 20, 2018, Mr. Chiang owned 375,521 AAP Management Units that have not met the earnings thresholds and Mr. Nerbonne owned 56,328 AAP Management Units that have not met the earnings thresholds. The vesting date for the AAP Management Units held by Messrs. Chiang and Nerbonne is January 1, 2023. The size of the discount to fair market value reflected in the potential call right purchase price decreases over time pursuant to a formula set forth in each AAP Management Unit grant agreement. AAP Management Unit grants also provide that all earned AAP Management Units and a portion of any unearned and unvested AAP Management Units
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will vest upon a change of control. All earned AAP Management Units will also vest if AAP does not timely exercise its call right.
As long as the PAGP Class A shares are publicly traded, each vested AAP Management Unit may be converted into Class A units of AAP ("AAP units") and a like number of PAGP Class B shares based on a conversion ratio of approximately 0.941. Following any such conversion, the resulting AAP units and PAGP Class B shares are exchangeable for PAGP Class A shares or redeemable for PAA common units, in each case on a one-for-one basis as provided in the AAP limited partnership agreement. See "Certain Relationships and Related Transactions—AAP Management Units."
Prior to the Simplification Transactions, the entire economic burden of the AAP Management Units was borne by AAP. However, in connection with the closing of the Simplification Transactions, AAP received one PAA common unit for each outstanding earned and vested AAP Management Unit (on a post-conversion basis), and PAA withheld approximately 800,000 units from the Simplification Transactions consideration for future distributions to AAP when and if any outstanding but unearned AAP Management Units become earned.
Relation of Compensation Elements to Compensation Objectives
Our compensation program is designed to motivate, reward and retain our executive officers. Cash bonuses serve as a near-term motivation and reward for achieving the annual goals established at the beginning of each year. Phantom unit awards (and associated DERs) and AAP Management Units provide motivation and reward over both the near-term and long-term for achieving performance thresholds necessary for earning and vesting. The level of annual bonus and phantom unit awards reflect our relatively moderate salary profile and the significant weighting towards performance based, at-risk compensation. Salaries and cash bonuses (particularly quarterly bonuses), as well as currently payable DERs associated with unvested phantom units and earned AAP Management Units subject to AAP's call right, serve as near-term retention tools. Longer-term retention is facilitated by the minimum service periods of up to five years associated with phantom unit awards, the long-term vesting profile of the AAP Management Units and, in the case of certain executives directly involved in activities that generate partnership earnings, annual bonuses that are payable over a three-year period. To facilitate the compensation committee in reviewing and making recommendations, a compensation "tally sheet" is prepared by the CEO and General Counsel and provided to the compensation committee.
We stress performance-based compensation elements to attempt to create a performance-driven environment in which our executive officers are (i) motivated to perform over both the short termbenchmarking peer group. Meridian’s benchmark study was presented to the Compensation Committee in November 2023.
To provide a broader context to the Compensation Committee, Meridian also provided the Committee with relevant data from six additional midstream companies, nine upstream companies (used exclusively for pay mix comparison purposes), and relevant survey data (used as a secondary reference for additional context); however, the benchmarking peer group listed in the table below served as the primary source of external comparative information.
Meridian’s benchmark study presented to the Compensation Committee in November 2023 included the following summary findings:
•
Total target compensation for all NEOs on average falls within the middle range of our peers; and
•
Total target compensation for the CEO ranks below the median relative to peers.
For a portion (25%) of the long-term incentive awards granted to our executive officers in 2023, we included relative TSR as a performance metric for the three-year performance period ending June 30, 2026. The entities in our 2023 compensation benchmarking peer group and the long term, (ii) appropriately rewardedentities and indices in our TSR Comparator Peer Group for their servicesthe 2023 long-term incentive awards include the following:
| | | Entity/Index Name (Ticker) | | | | 2023 Compensation
Benchmarking
Peer Group | | | | 2023 TSR Comparator
Peer Group | | |
| | | Energy Transfer LP (ET) | | | | | | | | | | |
| | | Enterprise Products Partners LP (EPD) | | | | | | | | | | |
| | | Kinder Morgan Inc. (KMI) | | | | | | | | | | |
| | | The Williams Companies Inc. (WMB) | | | | | | | | | | |
| | | MPLX LP (MPLX) | | | | | | | | | | |
| | | ONEOK Inc. (OKE) | | | | | | | | | | |
| | | Targa Resources Corp. (TRGP) | | | | | | | | | | |
| | | Western Midstream Partners LP (WES) | | | | | | | | | | |
| | | EnLink Midstream LLC (ENLC) | | | | | | | | | | |
| | | Magellan Midstream Partners LP (MMP) | | | | | | | | | | |
| | | Equitrans Midstream Corporation (ETRN) | | | | | | | | | | |
| | | Crestwood Equity Partners LP (CEQP) | | | | | | | | | | |
| | | Genesis Energy LP (GEL) | | | | | | | | | | |
| | | NuStar Energy LP (NS) | | | | | | | | | | |
| | | S&P 500 Index (SPX) | | | | | | | | | | |
| | | Alerian Midstream Energy Index (AMNA) | | | | | | | | | | |
Additional Information Regarding Compensation Practices and (iii) encouraged to remain with us even after meeting long-term performance thresholds in order to meet the minimum service periods and realize the opportunity to earn future rewards. We believeProcesses
Set forth below is additional information regarding our compensation philosophypractices and processes as implemented by application of the three primary compensation elements (i) aligns the interests of our Named Executive Officers with our unitholders, (ii) positions usthey relate to achieve our business goals, and (iii) effectively encourages the exercise of sound judgment and risk-taking that is conducive to creating and sustaining long-term value. We believe the processes employed by the compensation committee and by the Board in applying the elements of our compensation (as discussed in more detail below) provide an adequate level of oversight with respect to the degree of risk being taken by management to achieve short-term performance goals. See "Relation of Compensation Policies and Practices to Risk Management."Application of Compensation Elements
program:
Base Salary. We do Historically, we have not make systematicmade regular annual adjustments to the base salaries of our Named Executive Officers. We do, however, makehave made salary adjustments as necessary to maintain hierarchical relationships
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among senior management levels after new senior management members are added to keep pace with our overall growth. Since the date of our initial public offering in 1998 (or date of employment, if later) through December 31, 2017, Mr. Armstrong has received one salary adjustment, Mr. Pefanis has received two salary adjustments, Mr. Swanson has received five salary adjustments, Mr. Nerbonne has received three salary adjustments and Mr. vonBerg has received two salary adjustmentsperiodically in connection with taking on increasingpromotions, the assumption of increased responsibilities and promotions. During 2016 and 2017, Mr. Armstrong unilaterally electedor to forego approximately 90% of his annual base salary.
address changes in competitive market data. Base salaries were not adjusted in 2023.
Annual Discretionary Bonuses.Cash Incentive Awards. Annual discretionary bonusescash incentive awards (or bonuses) are determined within a formulaic framework that includes an annual bonus target for each Named Executive Officer, expressed as a percentage of base salary, and the determination of an actual payout as a percentage of such target amount based on ourcompany performance relative to our annual plan forecastspecific goals, and public guidance (typically provided quarterly in conjunction with release of earnings),individual contributions. Annual company goals typically include financial, safety, environmental and other quantitativespecified goals, and qualitativeeach goal, as well as the individual performance component, is assigned a weighting or percentage share of the total payout opportunity. Annual goals and objectives, as well as weightings and potential payout ranges (expressed as a percentage of target) are established at the beginning of each year. Such annual objectivesyear and are discussed and reviewed with the Board in conjunction with the review and authorizationapproval of theour annual plan. Payout percentages relative to achievement of specified goals may range from 0 – 200% of an individual’s target opportunity. The final amounts that are paid may be adjusted by the Compensation Committee and the Board based on factors it deems relevant. Such adjustments may be positive or negative depending on the circumstances.
2023 Annual Bonus Formula
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At the end of each year, the CEO performs a quantitative and qualitative assessment of ourassesses the Company’s performance relative to our goals. Key quantitative measures include earnings before interest, taxes, depreciationgoals and amortization (including our proportionate shareobjectives established at the beginning of depreciation and amortization of unconsolidated entities) and adjusted for certain selected items impacting comparability ("Adjusted EBITDA"), relative to established guidance, as well as distributable cash flow and distributable cash flow per unit. Our primary performance metric is our ability to sustain and increase our distributable cash flow and make cash distributions to our unitholders. Accordingly, although net income and net income per common unit are monitored to highlight inconsistencies with primary performance metrics, as is our market performance relative to our MLP peers and major indices, these metrics are considered secondary performance measures.the year. The CEO'sCEO’s written analysis of our performance examines our accomplishments and shortfalls relative to established goals and objectives and also assesses overall performance against opportunities and challenges, taking into account controllable and non-controllable factors encountered during the year. The resulting documentCEO also assesses the individual performance and contributions of each NEO (other than himself) towards the satisfaction of the various goals and objectives established at the beginning of the year. The CEO submits his report and the supporting detail is submitted to the Compensation Committee and Board for review and comment. Based on the conclusions set forth in the annual performance review,assessment, the CEO submits recommendations to the compensation committeeCompensation Committee the results of the formulaic bonus calculations, along with any recommendations for bonuses to our otheradjustments, for all Named Executive Officers taking into account the relative contributionother than himself. In connection with his assessment of theCompany and individual officer. There are no set formulas for determining the annual discretionary bonus for our Named Executive Officers; however, pursuant to his employment agreement, Mr. Chiang is entitled to a minimum bonus of $1.25 million for 2017. Factors considered byperformance, the CEO in determining the level of bonus in general include (i) also considers various factors, including:
•
whether or not we achieved the goals established for the year and any notable shortfalls relative to expectations; (ii)
•
the level of difficulty associated with achieving such objectives based on the opportunities and challenges encountered during the year; (iii)
•
current year operating and financial performance relative to both public guidance and prior year'syear’s performance; (iv)
•
significant transactions or accomplishments for the period not included in the goals for the year; (v)
•
our relative prospects at the end of the year with respect to future growth and performance; and (vi)
•
our equity price performance and returns during the year and our positioning at the end of the year with respect to our targeted leverage metrics and credit profile.
The CEO takes these factors into consideration as well asCompensation Committee may adjust the relative contributions of each of our Named Executive Officers to the year's performanceCEO’s recommendations upward or downward in developing his recommendations for bonus amounts. Theseits discretion. The Compensation Committee’s recommendations are reviewed by and discussed with the compensation committee, adjusted as appropriate, andthen submitted to the Board for itsfinal review and approval. Similarly,
As noted above, the compensation committee typicallyCEO does not make a recommendation with respect to his own bonus. The Compensation Committee assesses the CEO's contributionCEO’s performance and contributions toward meeting ourthe goals and objectives established at the beginning of the year, and then recommends to the Board a total bonus payout for the CEO that it believes to be commensurate with such contribution. In several historical instances,performance and contributions.
Long-Term Incentive Awards. We use performance and time-based phantom unit grants issued under our Long-Term Incentive Plans to incentivize and retain our executive officers and encourage and reward timely achievement of targeted metrics designed to align the CEO andlong-term interests of the President have requested that the bonus amount recommended by the compensation committee be reduced to maintain a closer relationship to bonuses awarded to the other Named Executive Officers and, for 2015, 2016 and 2017, have stated that they would neither request nor accept a cash bonus.
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U.S. Bonus Based on Adjusted EBITDA—Mr. vonBerg and certain other memberswith those of our U.S.-based senior management teamunitholders.
2023 Annual LTIP Award; Determination of Units for Annual Grants
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NEOs are directly involved in activities that generate partnership earnings. These individuals, along with other employees in our marketing and business development groups, participate in a quarterly bonus pool, the sizeeligible to receive an annual grant of which isphantom units based on adjusted EBITDA, which directly rewards for quarterly performance the commerciala formula tied to salary and asset managing employees who participate. This quarterly incentive provides a direct incentive to optimize quarterly performance even when, on an annual basis, other factors might negatively affect bonus potential.PAA’s unit price. The size of the bonus pool, and the allocation of quarterly bonus amounts among all participantsannual grant for a specified individual is based on relativea designated target percentage of their base salary that takes into account their expected contribution is recommended by Mr. Pefanis and reviewed, modified and approved by Mr. Armstrong, as appropriate. Messrs. Pefanis and Armstrong do not participate in the quarterly bonus pool. The quarterly bonus amounts for Mr. vonBerg are taken into consideration in determining the recommended annual discretionary bonus submitted by the CEO to the compensation committee. Long-Term Incentive Awards. We have not historically made systematic annualrespect of longer term performance objectives.
Annual equity grants
of phantom unit awards to our Named Executive Officers. Although we have made "off cycle" awards from time to time to retain talent and incentivize performance during challenging market conditions, generally our objective has been to time the granting of awards such that the creation of new long-term incentives coincides with the satisfaction of performance thresholds under existing awards. Achievement of performance targets does not shorten the minimum service period requirement. Thetypically require minimum service periods of
three years in order to encourage long-term retention. A phantom unit grant provides the
new awards are generally synchronizedholder with the
remaining time-vesting requirementsright to receive, upon the satisfaction of
outstanding awardsvesting criteria specified in
the grant, a
manner designed to encourage extended retentionPAA common unit (or cash equivalent). We do not use options as a form of
ourincentive compensation. Terms of phantom unit grants may vary, but generally phantom units vest upon the later of achievement of designated performance thresholds and continued employment for a full three-year period. Phantom unit grants for the Named Executive
Officers. Accordingly, these new arrangements inherently take into accountOfficers typically include DERs, and for awards granted in 2023, DERs on the
valueperformance-based portion of
such awards
where performance levels have been achieved but have not yet vested dueaccrue from the grant date and will be payable only if and to
ongoing service period requirements, but do not take into consideration previous awards that have fully vested. For 2016 and 2017, our CEO and President have each stated that they would neither request nor accept any long-term incentive awards. The compensation committee does not plan to issue any additional AAP Management Units.
Application in 2017
At the beginning of 2017, we established several internal quantitative and qualitative financial, commercial, operational and organizational goals that included implementing strategic plan initiatives, advancing multi-year programs and initiatives to prepareextent the organization for future growth, and enhancing and improving our focus on safe, compliant and reliable operations. We also provided public financial guidance for 2017 noting that we expected 2017 to be extremely challenging over the first half or so of the year and characterizing 2017 as a transition year. We stated that the most important quantitative measure for assessing PAA's performance during 2017 would be the level of preliminary 2018 adjusted EBITDA guidance providedunderlying phantom units vest at the end of the year, which was considered to be most reflectivethree-year performance period. DERs on the time-based portion of PAA's positioningsuch awards accrue for the future.
PAA reported 2017 Net Income Attributable to PAA, Adjusted EBITDAfirst year following the grant date, with such accrued amount being paid out on the first anniversary of the grant date, and Implied Distributable Cash Flowthen are paid on a quarterly basis thereafter.
2023 Performance Overview and Specific Application of approximately $0.85 billion, $2.1 billionCompensation Elements in 2023
At the beginning of 2023, we established key quantitative financial, safety and $1.3 billion, respectively.(1) Although meaningfully profitableenvironmental objectives, along with several qualitative goals. These objectives and goals are summarized in a challenging environment, PAA's overall financial and operating results fell short of our 2017 guidance. PAA's fee-based businesses performed slightly ahead of our 2017 guidance, growing approximately 12% over 2016 levels. However, PAA's margin-based activities came in +/-
(1)Adjusted EBITDA and Implied Distributable Cash Flow are non-GAAP financial measures. Information regarding these non-GAAP financial measures, including a reconciliation to the most directly comparable GAAP measures, is included under the caption "Non-GAAP Financial Measures" beginning on page 83table below.
| | | 2023 Performance Objectives and Results (all figures rounded) | | |
| | | Quantitative Goals | | |
| | | Metrics | | | | 2023 Goals | | | | 2023 Results | | |
| | | Adjusted EBITDA attributable to PAA(1) | | | | $2.50 billion | | | | $2.71 billion | | |
| | | Implied DCF per common unit and CUE(1) | | | | $2.33 | | | | $2.46 | | |
| | | Safety and Environmental | | | | •
Total Recordable Injury Rate:0.25 •
Federally Reportable Releases: 10 | | | | •
Total Recordable Injury
Rate: 0.31 •
Federally Reportable Releases: 19 | | |
| | | Qualitative Goals | | |
| | | •
Financial: strengthen financial positioning and flexibility; achieve a leverage ratio of ~3.5x or lower by year end; deliver $579 million of Adjusted Free Cash Flow after Distributions; and increase returns of free cash flow after distributions to unitholders. •
Investment: maintain capital discipline by completing our capital program and maintaining prudent risk adjusted return hurdles for projects under development; advance key projects, including emerging energy opportunities, that will support future growth and returns; and optimize existing assets. •
Operations and Management: advance and complete key programs and initiatives, including efforts designed to improve the efficiency and scalability of our operations and accounting processes and information systems; progress sustainability goals; and advance key initiatives related to talent development/management, diversity and inclusion, succession planning, employee wellness and performance management. | | |
| | | (1)
Adjusted EBITDA attributable to PAA and Implied DCF are non-GAAP financial measures. Information regarding these non-GAAP financial measures, including a reconciliation to the most directly comparable GAAP measures, is included under the caption “Non-GAAP Financial Measures” beginning on page 73 of PAA’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the SEC. | | |
Set forth below are some highlights regarding our 2023 performance relative to our goals and objectives for the year:
•
With respect to Adjusted EBITDA attributable to PAA, we exceeded our goal by 8% driven primarily by volume growth, higher commodity prices and operating performance.
•
In addition to the results set forth in the table above, we also reported Adjusted Free Cash Flow after Distributions of approximately $809 million (vs. our goal for the year ended December 31, 2017 as filedof $579 million).
•
We reduced our debt by approximately $700 million and returned approximately $750 million to common equity holders via distributions. We exited the year with a leverage ratio of 3.1x and approximately $2.6 billion of committed liquidity.
•
Despite a strong multi-year improvement trend, we did not achieve our annual goals regarding safety and environmental metrics. We experienced 19 federally reportable releases (“FRR”) versus a target of 10 and we had a total recordable injury rate (“TRIR”) of 0.31 versus a target of 0.25. However, excluding non-preventable injuries, the SEC.
TableTRIR for 2023 would have been 0.23, or slightly below the target of Contents
$300 million short of our 2017 guidance0.25. In addition, injury severity and prior-year results, butlost workdays were generally consideredreduced relative to be as favorable as market conditions would permit.
During 2017, PAA also took a number of steps to significantly reduce debt, restore strong distribution coverage and drive sustainable distribution growth capacity. These steps included, among others, the reset of our annualized distribution level to $1.20 per common unit from the prior $2.20 level.
2022 levels.
In developing his annual bonus compensation recommendations, our CEO primarily considered thesethe quantitative factors and context described above, as well as several qualitativeabove. Other factors and positive achievements. Specific achievements considerednoted by our CEO as being relevant to his assessment of our 2023 performance included the following: •Executed
We enhanced our existing assets through the completion of three bolt-on acquisitions;
•
We added additional dedicated acres to the POP JV and extended contracts;
•
We continued to advance several debottlenecking projects at our NGL facilities designed to improve efficiencies;
•
We completed the sale of our minority interest in the Keyera Ft. Sask JV and a $1.1 billion expansionportion of our owned rail car fleet;
•
We captured efficiency improvements at our Empress straddle plants;
•
We delivered our capital program generally on time and on budget, including development of key assets in the Permian Basin;
within budget; and
•Completed the acquisition of a strategic crude oil gathering system in the Northern Delaware Basin for approximately $1.2 billion;
•Completed approximately $1.1 billion of non-core asset sales at attractive valuations and
We advanced efforts on additional asset sales that we plan to complete in 2018;
•Raised $2.5 billion of common and non-convertible perpetual preferred equity; and
•Reduced long-term debt by $0.9 billion and total debt by $1.9 billion, while maintaining a high level of liquidity. We also undertook a comprehensive review of our organizational structure and made a number of changes to improve our effectiveness and efficiency, announced the timing for implementing our CEO succession plan,several emerging energy projects and continued to make improvementsmeaningful progress on our efforts to improve effectiveness and efficiency in thea variety of areas, ofincluding employee development and succession planning, internal systems and processes, safety, integrity, environmental stewardship and environmental compliance.
Several of the actions taken in 2017 contributed to securing significant commitments in early 2018 that allowed us to sanction a major Permian Basin pipeline project and further enhance PAA's long-term positioning. Relative to the performance construct deemed most important at the beginning of 2017, the foregoing accomplishments collectively enabled us to provide 2018 adjusted EBITDA guidance representing an approximate 10% increase over 2017 levels with visibility for further growth in 2019.
sustainability.
2023 Compensation Elements
For 2017,2023, the elements of compensation were applied as described below.
Base Salary. During 2017, in connection with the overall organization review, the compensation committee and the Board approved salary increases for our Named Executive Officers (other than Mr. Armstrong) in amounts ranging from $100,000 There were no adjustments to $150,000. For the second consecutive year, Mr. Armstrong made the unilateral election to forego a significant portion of his base salary. See "—Employment Contracts" for additional information regarding the base salaries of our Named Executive Officers with employment contracts.in 2023. The 2023 annual base salaries for our NEOs were as follows:
| | | Named Executive Officer | | | | Annual Base Salary | | |
| | | Willie Chiang | | | | | $ | 800,000 | | | |
| | | Harry Pefanis | | | | | $ | 600,000 | | | |
| | | Al Swanson | | | | | $ | 550,000 | | | |
| | | Richard McGee | | | | | $ | 550,000 | | | |
| | | Chris Chandler | | | | | $ | 600,000 | | | |
| | | Jeremy Goebel | | | | | $ | 600,000 | | | |
Annual Cash Bonuses. Messrs. Armstrong and Pefanis have indicated that neither of them will request nor accept a bonus for 2017. The CEO'sIncentive Awards. There were no adjustments to the annual bonus recommendationstargets for the remaining Named Executive Officers for 2017 were based on his assessment of PAA's quantitative and qualitative performance as well as the individual's performance against goals, opportunities and challenges, taking into consideration both controllable and non-controllable factors. Based on the CEO's annual performance review and recommendations, the compensation committee recommended to the Board and the Board approved the annual bonuses reflected in the Summary Compensation Table and notes thereto.
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Long-Term Incentive Awards. In July 2017, our Named Executive Officers (otherin 2023. The 2023 annual bonus targets for our NEOs, expressed as a percentage of base salary, were as follows:
| | | Named Executive Officer | | | | Annual Bonus Target
(as a Percentage of Base Salary) | | |
| | | Willie Chiang | | | | | | 250% | | | |
| | | Harry Pefanis | | | | | | 200% | | | |
| | | Al Swanson | | | | | | 150% | | | |
| | | Richard McGee | | | | | | 150% | | | |
| | | Chris Chandler | | | | | | 150% | | | |
| | | Jeremy Goebel | | | | | | 150% | | | |
The goals (and weightings) for 2023 cash incentive awards established at the beginning of the year were company performance (60% overall weighting allocated among Adjusted EBITDA attributable to PAA (40%), DCF per common unit and CUE (40%) and safety/environmental (20%)) and individual performance (40% weighting). The minimum and maximum payout levels of 0% and 200%, respectively, for Adjusted EBITDA attributable to PAA and DCF per common unit and CUE were set at 92.5% and 110%, respectively, of the applicable target with linear interpolation between those points. The minimum and maximum payout levels of 0% and 200%, respectively, for safety (TRIR) and environmental (FRR)
metrics were set at a range of between 0.28 (min) to 0.22 (max) for TRIR and a range of between 13 (min) and 7 (max) for FRR, in both cases with linear interpolation between those points. Individual performance metric payouts were determined by the Compensation Committee based on its assessment of individual contributions towards our 2023 goals and objectives.
Company Performance (60% weight)
The tables below reflect the weighting, payout range and actual results for each company performance metric. Individual performance scores and payout calculations are set forth below under “— Individual Performance.”
Company Performance Payout Thresholds & Ranges: (interpolate between points)
| | | (60% weighting) | | | Threshold | | | Target | | | Max | | | | 2023 Formulaic
Payout
Calculation | |
| | | Adjusted EBITDA attributable to PAA/DCF (% Target) | | | | | 92.50% | | | | | | 100% | | | | | | 110% | | | | |
| | | Safety (TRIR) | | | | | 0.28 | | | | | | 0.25 | | | | | | 0.22 | | | | |
| | | Environmental (FRR) | | | | | 13 | | | | | | 10 | | | | | | 7 | | | | |
| | | Payout | | | | | 0% | | | | | | 100% | | | | | | 200% | | | | |
| | | Company Performance Metrics | | | Weight | | | Threshold | | | Target | | | Max | | | Result | | | Payout % | | | Wgtd % | | |
| | | Adjusted EBITDA attributable to PAA(1) | | | | | 40% | | | | | $ | 2,313 | | | | | $ | 2,500 | | | | | $ | 2,750 | | | | | $ | 2,684 | | | | | | 174% | | | | | | 70% | | | |
| | | Implied DCF/Common Unit and CUE(1) | | | | | 40% | | | | | $ | 2.16 | | | | | $ | 2.33 | | | | | $ | 2.56 | | | | | $ | 2.43 | | | | | | 141% | | | | | | 56% | | | |
| | | Safety (TRIR)(2) | | | | | 10% | | | | | | 0.28 | | | | | | 0.25 | | | | | | 0.22 | | | | | | 0.31 | | | | | | 50% | | | | | | 5% | | | |
| | | Environmental (FRR) | | | | | 10% | | | | | | 13 | | | | | | 10 | | | | | | 7 | | | | | | 19 | | | | | | 0 | | | | | | 0% | | | |
| | | Company Performance Subtotal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 131% | | | |
(1)
For purposes of the 2023 annual bonus calculation, Adjusted EBITDA and DCF/CUE were adjusted downward to $2.684 billion and $2.43, respectively, to remove the impact of unplanned interest income.
(2)
The Committee approved a 50% discretionary payout for the TRIR metric given that 2023 TRIR would have been 0.23 (same level as 2022) if non-preventable incidents were excluded and that injury severity/lost workdays were down relative to 2022.
Individual Performance (40% weight)
As noted above, individual performance accounts for 40% of the annual bonus opportunity for our Named Executive Officers. Each officer’s individual contributions toward satisfaction of company goals and objectives is evaluated and payouts may range from 0-200% of target. During 2023, the executive leadership team executed well in an uncertain and volatile environment allowing Plains to successfully capture multiple upsides in the business and deliver results that exceeded plan. The individual payout scores for our NEOs for 2023 are set forth in the table below and take these factors into account, together with the specific items described for each NEO in the table.
| | | Name | | | | Individual Performance Highlights | | | | Payout
Score | | |
| | | Willie Chiang | | | | •
Overall leadership, culture and tone setting •
Investor and rating agency engagement/messaging, capital allocation, ESG/sustainability •
Led strategic positioning for 2024+ •
Ongoing Board initiatives, leadership development/succession | | | | 175% | | |
| | | Harry Pefanis | | | | •
Significant role in key strategic decisions/initiatives •
Leadership of long-term efficiency initiative •
Mentored/developed key individuals and provided strategic/tactical advice on commercial matters •
Strategic positioning for 2024+ •
Develop/maintain/enhance major commercial relationships | | | | 100%* | | |
| | | Al Swanson | | | | •
Finance group leadership in volatile environment •
Driver of organizational focus on maximizing free cash flow and maintaining capital discipline, financial flexibility and ample committed liquidity •
Key role in developing financial strategy for 2024+ •
Key role in driving updated capital allocation framework/leverage targets •
Facilitated effort to improve credit ratings | | | | 160% | | |
| | | Richard McGee | | | | •
Legal/Land and HR group oversight/leadership during very active year •
Leadership/oversight of legal efforts in support of key acquisition, divestiture, JV and other transactions and key commercial arrangements •
Oversight of effort to manage/mitigate Line 901 and other litigation exposure and advance positioning for resolution •
Key role in investor engagement effort and various Board/governance/HR/compensation initiatives | | | | 160% | | |
| | | Chris Chandler | | | | •
Drive operating excellence and continued multi-year trend of HSE and reliability improvements •
Operational reliability and successful capital program to capture Permian growth •
Record operations personal and process safety performance •
Strong NGL operations performance to capture NGL production and border flows in Canada •
Optimization of Empress complex to improve margin, efficiency and yield •
Operations integration of three Permian acquisitions •
Development and sanctioning of PFS Phase 1 Project •
Timely completion of Plains executed scope of Wink to Webster project | | | | 175% | | |
| | | Jeremy Goebel | | | | •
Overall commercial organization leadership •
Led key commercial strategies that drove financial overperformance vs. plan •
Solid execution enabled capture of unforecasted market opportunities •
Led key business development initiatives •
OMOG, LM and Southern Delaware transactions •
$310 million in divestitures (KFS and railcar sales) •
Commercial contracting in support of Ft. Sask debottleneck/expansion •
Increased Permian dedicated acreage by ~150,000 acres •
Significant additional volume capture (Permian and elsewhere) •
Drove NGL strategy/execution (including IPL/Co-ed restructuring) •
Oversight of emerging energy effort •
Significant role in attractive positioning of business for 2024+ | | | | 175% | | |
*
Mr. Pefanis requested a 100% cap/limit for his individual payout score.
After applying the individual performance scores set forth in the table above ranging from 100% to 175%, the total formulaic bonus payout calculation for our NEOs ranged from 119% to 149%, as set forth in the table below.
| | | Named Executive Officer | | | 2023 Target
Bonus
Amount | | | Company Results | | | Individual Results | | | Percent of
Target
Bonus
Earned | | | 2023 Actual
Bonus
Amount(1) | | |
| | Company
Score | | | | | | Weight | | | | | | Individual
Score | | | | | | Weight | | | | |
| | | Willie Chiang | | | | $ | 2,000,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 175% | | | | x | | | | | 40% | | | | = | | | | | 149% | | | | | $ | 2,975,000 | | | |
| | | Harry Pefanis | | | | $ | 1,200,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 100% | | | | x | | | | | 40% | | | | = | | | | | 119% | | | | | $ | 1,425,000 | | | |
| | | Al Swanson | | | | $ | 825,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 160% | | | | x | | | | | 40% | | | | = | | | | | 143% | | | | | $ | 1,180,000 | | | |
| | | Richard McGee | | | | $ | 825,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 160% | | | | x | | | | | 40% | | | | = | | | | | 143% | | | | | $ | 1,180,000 | | | |
| | | Chris Chandler | | | | $ | 900,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 175% | | | | x | | | | | 40% | | | | = | | | | | 149% | | | | | $ | 1,340,000 | | | |
| | | Jeremy Goebel | | | | $ | 900,000 | | | | | | 131% | | | | x | | | | | 60% | | | | + | | | | | 175% | | | | x | | | | | 40% | | | | = | | | | | 149% | | | | | $ | 1,340,000 | | | |
(1)
Final amounts were rounded up to the nearest multiple of $5,000.
Long-Term Incentive Awards. The annual LTIP targets for the Named Executive Officers, expressed as a percentage of base salary, and the value of the 2023 annual LTIP awards to the Named Executive Officers are set forth in the table below:
| | | Named Executive
Officer | | | | Annual LTIP
Award Target
Value (as
a percentage of
base salary) | | | | 2023 Annual
LTIP Award
Value | | | | 2023 Annual
Phantom Units
Granted(1) | | | | Time-Based
Phantom Units
(50%) | | | | Performance-
Based
Phantom Units
(50%) | | |
| | | Willie Chiang | | | | | | 600% | | | | | | $ | 4,800,000 | | | | | | | 324,100 | | | | | | | 162,050 | | | | | 162,050 | | |
| | | Harry Pefanis | | | | | | 500% | | | | | | | n/a(2) | | | | | | | n/a(2) | | | | | | | n/a(2) | | | | | n/a(2) | | |
| | | Al Swanson | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | 51,075 | | |
| | | Richard McGee | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | 51,075 | | |
| | | Chris Chandler | | | | | | 325% | | | | | | $ | 1,950,000 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | 65,825 | | |
| | | Jeremy Goebel | | | | | | 325% | | | | | | $ | 1,950,000 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | 65,825 | | |
(1)
Based on a volume weighted average price per unit for the 10-trading day period beginning five days before and ending five days after the ex-dividend date for the August 2023 distribution ($14.81).
(2)
Annual LTIP grants were not awarded to Mr. Pefanis as he requested to not participate in the 2023 long-term incentive program.
The 2023 time-based phantom units will vest (become payable 1-for-1 in PAA common units) on the August 2026 distribution date. The performance-based phantom units will potentially vest on the August 2026 distribution date at a scaled payout range of between 0% to 200% based on:
(i)
50% Relative TSR with Negative TSR Modifier: PAA’s TSR measured over the three-year period ending June 30, 2026 compared to the TSR of the TSR Comparator Peer Group identified on page 31 (if PAA’s relative TSR results in a payout of over 100%, but actual TSR is negative, the payout on this portion of the award will be reduced by 25 gross percentage points, but not below 100%); and
(ii)
50% DCF per CUE with Leverage Modifier: PAA achieving cumulative DCF per CUE of $7.45 over the three-year period ending June 30, 2026 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 2026 is higher than Messrs. Armstrongthe leverage ratio that equals the upper end of our then applicable guidance range).
DERs associated with the time-based phantom units will accrue for the first year and Pefanis, who declined to accept such awards) received supplemental LTIP awards. These supplemental awards, which include DERs payableaccrued amount will be paid in cash will vest 100%in a lump sum on the May 2019August 2024 distribution paymentdate; beginning in November 2024, DERs on such time-based phantom units will be paid quarterly until the associated
phantom units vest. DERs associated with the performance-based phantom units will accrue during the three-year performance period and be paid in cash in a lump sum on the August 2026 distribution date with respect to the number of such phantom units, if any, that vest on such date. See the "Grants“Grants of Plan Based Awards Table"Table” below for additional information. In 2018, we modifiedinformation regarding the practice of granting larger LTIP awards every two to three years in favor of smaller2023 annual awards. Accordingly, in March 2018, the Board authorized the grant of LTIP awards to certain Named Executive Officers. Messrs. Armstrong and Pefanis declined to accept any new awards. The awards to the remaining Named Executive Officers are designed to incentivize continued growth and fundamental performance, as well as encourage retention. The phantom units covered by these awards will vest in May 2021; provided, however, that 50% of the awards may vest prior to the May 2021 distribution date if and when we achieve a trailing four quarter distributable cash flow per common unit of $2.30, a 26% increase over the comparable metric for 2017. These phantom units include tandem DERs. The 2018 awards included grants to our Named Executive Officers as follows: Mr. Armstrong—none; Mr. Pefanis—none; Mr. Chiang—50,000; Mr. Swanson—30,000; Mr. Nerbonne—25,000 and Mr. vonBerg—none.
In March 2018, the Board amended the performance terms of 252,667 LTIP awards collectively held by Messrs. Chiang, Swanson and Nerbonne and 431,849 AAP Management Units collectively held by Messrs. Chiang and Nerbonne to modify the performance threshold metric from annualized quarterly distributions per unit to DCF per unit on a trailing four quarter basis. Prior to the modification, the performance thresholds for the LTIP awards and the AAP Management Units were indexed to achievement of annualized quarterly distribution levels ranging from $2.30 per unit to $2.65 per unit and $2.20 per unit to $2.80 per unit, respectively. These modifications were made primarily to insure that the performance metric for these awards remained tied to PAA's underlying financial performance notwithstanding the Board's decision in August 2017 to reduce our distribution in order to retain a meaningful amount of cash flow to improve our distribution coverage and reduce leverage. The service periods and other terms were not modified. The modifications impacted aggregate outstanding LTIP and AAP Management Unit awards (on a post-conversion basis) as follows: Mr. Chiang—528,489; Mr. Swanson—46,000 and Mr. Nerbonne—84,690. The modified performance levels for the LTIP awards are now based on distributable cash flow per unit on a trailing four quarter basis ranging from $2.30 to $2.65, and the modified performance levels for the AAP Management Units are now based on distributable cash flow per unit on a trailing four quarter basis ranging from $1.90 to $2.50.
grants.
Other Compensation Related Matters
Equity Ownership. Our Named Executive Officers and directors collectively own substantial equity in the Partnership as well as interests in PAA and PAGP including unvested long-term equity awards. As of March 25, 2024, the general partner. Although we encourage our Named Executive Officers to acquire and retain ownershipbeneficially owned, in the Partnership, we do not haveaggregate, approximately 12.6 million units of equity interests in PAA and/or PAGP with an approximate market value of $216 million, and all executive officers and directors beneficially owned, in the aggregate, approximately 81.0 million units of equity interests in PAA and/or PAGP with an approximate market value of $1.4 billion.
Equity Ownership Guidelines. We maintain Equity Ownership Guidelines to further align the interests of our executive officers and directors with the interests of our unitholders by requiring each to achieve and maintain a policy requiring maintenance of a specifiedminimum equity ownership level. OurUnder these guidelines, each executive officer and director is expected to continuously own PAA and/or PAGP securities with a value equal to a specified multiple of his or her base salary or annual cash retainer as follows:
| | | Title | | | | Multiple of Base Salary or
Annual Cash Retainer | | |
| | | CEO | | | | | | 6x | | | |
| | | President | | | | | | 5x | | | |
| | | EVP | | | | | | 3x | | | |
| | | SVP | | | | | | 1x | | | |
| | | Director | | | | | | 5x | | | |
Executive officers and directors are expected to meet these guidelines within five years after the later of becoming subject to the guidelines or the date of adoption of the guidelines. The compliance date for current executive officers and directors is November 2025, except for Mr. McCarthy whose compliance date is August 2026 and Ms. DeSanctis whose compliance date is August 2027. All current executive officers and directors are on track to meet the applicable guidelines on their respective compliance dates. Executive officers and directors are required to hold 100% of units/shares acquired upon vesting of phantom units or phantom shares until ownership guidelines are met (“hold until met” requirement).
Anti-Hedging and Pledging Policies. We have policies and procedures in place that prohibit our directors and officers, including our Named Executive Officers, from using puts, calls, options or optionsother derivative securities to hedge the economic risk of their ownership.equity ownership in us, and from engaging in other types of hedging transactions, including prepaid variable forwards, equity swaps, collars and exchange funds. Our policies also prohibit pledging company securities or holding such securities as marginable securities in a margin account.
Clawback Policy. Since November 2020, we have had in place a Clawback Policy to further align the interests of our executive officers with the interests of our unitholders, incentivize appropriate behaviors and discourage excessive risk taking. The Clawback Policy was amended and restated in November 2023 to conform to Nasdaq listing standards adopted pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. As amended and restated, the Clawback Policy includes the following clawback triggers and related recoveries:
•
Material financial restatements that result in over-payment of March 20, 2018, our Named Executive Officers beneficially owned, in the aggregate, directly or indirectly approximately 17 million PAA common or common equivalent units with an approximate market value of over $350 million, which was significantly greater than the combined aggregate salaries and bonuses of these individuals for 2017. Recovery of Prior Awards. Except as provided by applicable laws and regulations, we do not have a policy with respect to adjustment orincentive-based compensation (Company must seek recovery of awardsany excess compensation awarded or payments if relevant company performance measures upon which previous awards were based are restatedpaid); and
•
Detrimental conduct that results in significant financial, reputational or otherwise adjusted in a manner that would have reduced the size of such award or payment if previously known.
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Section 162(m). With respectother harm to the deduction limitations under Section 162(m)Company (Company may seek recovery or forfeiture of any performance-based compensation or time-based equity awards granted or paid during the 3-year period prior to discovery of the Code, we are a limited partnership and do not fall within the definition of a "corporation" under Section 162(m)misconduct).
Change in Control Triggers. The employment agreements for Messrs. Armstrong, Pefanis and Chiang, the Our long-term incentive plan grant agreements to our Named Executive Officers, and the AAP Management Unit grant agreements to which certain of our Named Executive Officers are a party include severance payment provisions orgrants provide for accelerated vesting triggered upon a change of control as(as defined in the respective agreements. In the case of the long-term incentive plan grants, the provisionsuch agreements), but such vesting becomes operative only if the change in control is accompanied by a change“change in status (such asstatus” (which includes the termination of employment by GP LLC)LLC without cause and certain other circumstances involving a voluntary separation or retirement). We believe this "double trigger"“double trigger” arrangement is appropriate because it provides assurance to the executive, but does not offer a windfall to the executive when there has been no real change in employment status. TheIn addition, the provisions in theMr. Pefanis’ legacy employment agreementsagreement provide for Messrs. Armstrong and Pefanis become operative onlya severance payment if the executivehe terminates employment within three months of thefollowing a change in control. Messrs. Armstrong andMr. Pefanis agreed to a conditional waiver of these provisions with respect to all prior qualifying transactions. Mr. Chiang's employment agreement provides for accelerated vesting of his 2015 long-term incentive plan grant and AAP Management Unit grant in the event of a change of control prior to December 31, 2018 if, in connection therewith, he is not designated to receive a promotion to the top leadership position of GP LLC and terminates his employment within a period of 90 days following such change of control. See "—Employment Contracts" and "—“— Potential Payments Upon Termination or Change-in-Control."” The provision of severance or equity acceleration for certain terminations and change of control helptransactions helps to create a retention tool by assuring the executive that the benefit of the employment arrangement will be at least partially realized despite the occurrence of an event that wouldcould materially alter the employment arrangement.
Section 162(m). With respect to the deduction limitations under Section 162(m) of the Internal Revenue Code, we are a limited partnership and do not fall within the definition of a “corporation” under Section 162(m).
Relation of Compensation Policies and Practices to Risk Management
Our compensation policies and practices are designed to provide rewards for short-term and long-term performance, both on an individual basis and at the entity level. In general, optimal financial and operational performance, particularly in a competitive business, requires some degree of risk-taking. Accordingly, the use of compensation as an incentive for performance can foster the potential for management and others to take unnecessary or excessive risks to reach thetargeted performance thresholds. For us, such risks would primarily attach to certain commercial merchant activities conducted in our Supply and Logistics segment as well as to the execution of investment capital expansion projects and acquisitions and the realization of associated returns. From a risk management perspective, our policy is to conduct our commercial activities within pre-defined risk parameters that are closely monitored and are structured in a manner intended to control and minimize the potential for unwarranted risk-taking. We also routinely monitor and measure the execution and performance of ourinvestment capital projects and acquisitions relative to expectations. Our compensation arrangements contain a number of design elements that serve to minimize the incentive for unwarranted risk-taking to achieve short-term, unsustainable results, including splitting the awards into a number of tranches and delaying the vesting date for various tranches, in addition to subjecting such awards to forfeiture for terminations related to violations of our risk management policies and practices or of our Code of Business Conduct. In addition, the vesting criteria for our long-term incentive awards are typically based on the passage of time and performance thresholds associated with distributable cash flow and/orachieving specified long-term financial goals. Also, the paymentfact that we utilize a variety of distributions from currently available cash. See "Compensation Discussionmetrics in connection with our incentive arrangements (both short and Analysis—Relationlong term), including a leverage modifier in the case of Compensation Elementsour long-term incentive plan grants, provides a structural mitigant against excessive risk taking to Compensation Objectives."achieve performance targets.
In combination with our risk-management practices and the processes employed by the Compensation Committee and the Board, we do notbelieve there is an adequate level of oversight with respect to the degree of risk being taken by management to achieve short- and long-term performance goals and we believe that risks arising from our compensation policies and practices for our employees are not reasonably likely to have a material adverse effect on us.
Summary Compensation Table
The following table sets forth certain compensation information for our ChiefNamed Executive Officer, Chief Financial Officer, President and Chief Commercial Officer andOfficers. As a result of his request to not participate in the 2023 long-term incentive program, Mr. Pefanis is not one of our three most highly compensated executive officers in 2017 other than our CEO and CFO (collectively, our "Namedfor 2023, but he has been included as a Named Executive Officers"). We reimburse our general partner and its affiliates for expenses incurred on our behalf, includingOfficer given the costssignificance of officer compensation. Mr. Chiang joined PAA in August 2015; therefore, his salary and bonus amounts for 2015 reflect a partial yearrole as President of employment.Plains.
| | | Name and Current Principal
Position | | | | Year | | | | Salary
($) | | | | Stock
Awards
($)(1) | | | | Non-Equity
Incentive
Plan
Compensation
($)(2) | | | | All Other
Compensation
($)(3) | | | | Total
($) | | |
| | | Willie Chiang | | | | | | 2023 | | | | | | | 800,000 | | | | | | | 3,658,279 | | | | | | | 2,975,000 | | | | | | | 20,640 | | | | | | | 7,453,919 | | | |
| | | Chairman and Chief
Executive Officer | | | | | | 2022 | | | | | | | 750,000 | | | | | | | 3,927,000 | | | | | | | 3,600,000 | | | | | | | 19,140 | | | | | | | 8,296,140 | | | |
| | | | 2021 | | | | | | | 600,000 | | | | | | | 2,053,850 | | | | | | | 1,720,000 | | | | | | | 18,360 | | | | | | | 4,392,210 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Harry Pefanis | | | | | | 2023 | | | | | | | 600,000 | | | | | | | — | | | | | | | 1,425,000 | | | | | | | 20,640 | | | | | | | 2,045,640 | | | |
| | | President | | | | | | 2022 | | | | | | | 550,000 | | | | | | | — | | | | | | | 2,105,000 | | | | | | | 19,140 | | | | | | | 2,674,140 | | | |
| | | | 2021 | | | | | | | 400,000 | | | | | | | — | | | | | | | 1,150,000 | | | | | | | 18,360 | | | | | | | 1,568,360 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Al Swanson | | | | | | 2023 | | | | | | | 550,000 | | | | | | | 1,153,018 | | | | | | | 1,180,000 | | | | | | | 20,640 | | | | | | | 2,903,658 | | | |
| | | Executive Vice President and
Chief Financial Officer | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,450,000 | | | | | | | 19,140 | | | | | | | 3,218,645 | | | |
| | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 980,000 | | | | | | | 18,360 | | | | | | | 2,219,627 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Richard McGee | | | | | | 2023 | | | | | | | 550,000 | | | | | | | 1,153,018 | | | | | | | 1,180,000 | | | | | | | 20,640 | | | | | | | 2,903,658 | | | |
| | | Executive Vice President,
General Counsel and Secretary | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,515,000 | | | | | | | 19,140 | | | | | | | 3,283,645 | | | |
| | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,050,000 | | | | | | | 18,360 | | | | | | | 2,289,627 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Chris Chandler | | | | | | 2023 | | | | | | | 600,000 | | | | | | | 1,485,999 | | | | | | | 1,340,000 | | | | | | | 20,640 | | | | | | | 3,446,639 | | | |
| | | Executive Vice President and
Chief Operating Officer | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | |
| | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,010,000 | | | | | | | 18,360 | | | | | | | 2,249,627 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Jeremy Goebel | | | | | | 2023 | | | | | | | 600,000 | | | | | | | 1,485,999 | | | | | | | 1,340,000 | | | | | | | 20,640 | | | | | | | 3,446,639 | | | |
| | | Executive Vice President and
Chief Commercial Officer | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | |
| | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,170,000 | | | | | | | 18,360 | | | | | | | 2,409,627 | | | |
| | | | | | | | | | | | | | | | | | | |
Name and Principal Position | | Year | | Salary
($) | | Bonus
($) | | Stock
Awards
($)(1) | | All Other
Compensation
($)(2) | | Total
($) | |
|---|
Greg L. Armstrong | | | 2017 | | | 40,000 | | | — | | | — | | | 2,500 | | | 42,500 | |
Chairman and Chief Executive | | | 2016 | | | 40,000 | | | — | | | — | | | 2,575 | | | 42,575 | |
Officer | | | 2015 | | | 375,000 | | | — | | | — | | | 17,340 | | | 392,340 | |
Harry N. Pefanis | | |
2017 | | |
350,000 | | |
— | | |
— | | |
17,160 | | |
367,160 | |
President and Chief Commercial | | | 2016 | | | 300,000 | | | — | | | — | | | 17,340 | | | 317,340 | |
Officer | | | 2015 | | | 300,000 | | | — | | | — | | | 17,340 | | | 317,340 | |
Willie Chiang | | |
2017 | | |
325,000 | | |
1,250,000 | | |
1,714,700 | | |
17,160 | | |
3,306,860 | |
Executive Vice President and | | | 2016 | | | 250,000 | | | — | | | 2,542,650 | | | 17,340 | | | 2,809,990 | |
Chief Operating Officer | | | 2015 | | | 89,102 | | | 500,000 | | | 5,330,830 | | | 5,886 | | | 5,925,818 | |
Al Swanson | | |
2017 | | |
325,000 | | |
800,000 | | |
923,300 | | |
17,160 | | |
2,065,460 | |
Executive Vice President and | | | 2016 | | | 250,000 | | | — | | | 2,126,580 | | | 17,340 | | | 2,393,920 | |
Chief Financial Officer | | | 2015 | | | 250,000 | | | 900,000 | | | — | | | 17,340 | | | 1,167,340 | |
Daniel J. Nerbonne | | |
2017 | | |
325,000 | | |
800,000 | | |
923,300 | | |
19,960 | | |
2,068,260 | |
Executive Vice President— | | | 2016 | | | 232,292 | | | — | | | 2,122,694 | | | 25,638 | | | 2,380,624 | |
Operations and Engineering | | | | | | | | | | | | | | | | | | | |
John vonBerg | | |
2017 | | |
275,000 | | |
1,060,000 |
(3) | |
923,300 | | |
17,160 | | |
2,275,460 | |
Executive Vice President | | | 2016 | | | 250,000 | | | 1,825,000 | (3) | | — | | | 17,340 | | | 2,092,340 | |
| | | 2015 | | | 250,000 | | | 3,650,000 | (3) | | — | | | 17,340 | | | 3,917,340 | |
(1)
(1)- Grant date fair values are presented for (i)
LTIP phantom unit grants awarded to Messrs. Chiang, Swanson, NerbonneMcGee, Chandler and vonBergGoebel in 2017,August 2021, 2022 and 2023, and (ii) LTIPa portion of phantom unit grants awarded to Messrs. Chiang, SwansonChandler and NerbonneGoebel in 2016, (iii) LTIP phantom unit grants awarded to Mr. ChiangNovember 2019, which were amended in 2015, and (iv) AAP Management Unit grants awarded to Mr. Chiang in 2015.February 2022. Dollar amounts in the table represent the aggregate grant date fair value of phantom units and AAP Management Units awarded based on the probable outcome of underlying performance conditions pursuant to FASB ASC Topic 718. See Note 17 to our Consolidated Financial Statements included in our 2023 Annual Report for further discussion regarding the calculation of grant date fair values.
For LTIP phantom unit grants awarded to Messrs. Chandler and AAP Management Unit grants awardedGoebel in 2015, the performance threshold for the first tranche of vesting wasNovember 2019, 50% were deemed probable of occurringvesting on the grant date. The aggregateprobability-based fair value of the phantom unit grants awarded in November 2019 was $3,901,500; the maximum grant date fair value of phantom unit grants and AAP Management Unit grants awarded to Mr. Chiang in 2015,November 2019, assuming that the highest level of performance conditions will be met, was $17,197,332. $6,865,000 for each of Messrs. Chandler and Goebel. The November 2019 phantom unit grants were amended in February 2022 to replace the original DCF/CUE metric in the performance-based portion of the award with a relative TSR metric. As a result of the amendment, 100% of the grants were deemed probable of vesting on the amendment date. The amounts
presented for each of Messrs. Chandler and Goebel for 2022 include aggregate incremental fair value of $2,486,671 resulting from the amendment of the performance-based portion of the November 2019 awards. The incremental fair value represents the net increase in fair value of the amended awards relative to the fair value on the original grant date.
For LTIP phantom unit grants awarded in 2016, the performance thresholds for the first, second and third tranches of vestingAugust 2021, 75% were deemed probable of occurringvesting on the grant date. The maximum grant date fair value of phantom unit grants awarded in 2016,August 2021, assuming that the highest level of performance conditions will be met, was: $3,724,600was $2,738,466 for Mr. Chiang $3,115,120and $1,095,022 for Mr.each of Messrs. Swanson, McGee, Chandler and $2,803,217 for Mr. Nerbonne. Goebel.
For LTIP phantom unit grants awarded in 2017, vesting wasAugust 2022, 75% were deemed probable of occurringvesting on the grant date. Therefore, theThe maximum grant date fair value of phantom unit grants awarded in 2017August 2022, assuming that the highest level of performance conditions will be met, was $7,854,000 for Mr. Chiang, $2,474,010 for each of Messrs. Swanson and McGee, and $3,189,795 for each of Messrs. Chandler and Goebel.
For phantom unit grants awarded in August 2023, 75% were deemed probable of vesting on the grant date. The maximum fair value of phantom unit grants awarded in August 2023, assuming that the highest level of performance conditions will be met, was $4,877,705 for Mr. Chiang, $1,537,358 for each of Messrs. Swanson and McGee, and $1,981,333 for each of Messrs. Chandler and Goebel.
As referenced previously, Mr. Pefanis is a co-founder and substantial equity owner and for the same as the value reportedlast several years, despite being eligible for equity awards, has requested to not participate in the table.long-term incentive program.
(2)
Amounts in this column for 2023 were rounded up to the nearest $5,000. See Note 16 to our Consolidated Financial Statements included in our 2017“2023 Compensation Elements — Annual ReportCash Incentive Awards” above for further discussion regarding the calculation of grant date fair values.additional information.
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GP LLC matches 100% of employees'employees’ contributions to its 401(k) plan in cash, subject to certain limitations in the plan. All Other Compensation for 20172023 includes $2,348$19,800 in such matching contributions for Mr. Armstrong and $16,200 for each of Messrs. Pefanis, Chiang, Swanson, Nerbonne and vonBerg.the Named Executive Officers. The remaining amount represents premium payments on behalf of such Named Executive Officer for group term life insurance and, for Mr. Nerbonne only, a car allowance of $2,800 (payment of a car allowance to Mr. Nerbonne was discontinued in 2017).
(3)For Mr. vonBerg, includes quarterly bonuses aggregating $685,000, $1,825,000 and $2,750,000 and annual bonuses of $375,000, $-0- and $900,000 in 2017, 2016 and 2015, respectively. Annual bonuses are payable 60% at the time of the award and 20% in each of the two succeeding years.insurance.
Grants of Plan-Based Awards Table
The following table sets forth summary information regarding all grants of plan-based awards made to our Named Executive Officers during the fiscal year ended December 31, 2017:2023:
| | | Name | | | | Grant Date | | | | Estimated Future Payouts Under
Non-Equity Incentive Plan Awards | | | | Estimated Future Payouts Under
Equity Incentive Plan Awards(1) | | | | All Other
Stock Awards:
Number of
Shares of
Stock or Units
(#)(2) | | | | Grant Date
Fair Value
Of Stock and
Option Awards
($)(3) | | |
| | Threshold
($) | | | | Target
($) | | | | Maximum
($) | | | | Threshold
(#) | | | | Target
(#) | | | | Maximum
(#) | | |
| | | Willie Chiang | | | | | | 2/16/23 | | | | | | | — | | | | | | | 2,000,000 | | | | | | | 4,000,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 162,050 | | | | | | | 324,100 | | | | | | | 162,050 | | | | | | | 3,658,279 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Harry Pefanis | | | | | | 2/16/23 | | | | | | | — | | | | | | | 1,200,000 | | | | | | | 2,400,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Al Swanson | | | | | | 2/16/23 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 51,075 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | | | 1,153,018 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Richard McGee | | | | | | 2/16/23 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 51,075 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | | | 1,153,018 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Chris Chandler | | | | | | 2/16/23 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,825 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | | | 1,485,999 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Jeremy Goebel | | | | | | 2/16/23 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,825 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | | | 1,485,999 | | | |
| | | | | | | | | | |
Name | | Grant
Date | | All Other
Stock Awards:
Number Of
Shares Of
Stock or
Units (#) | | Grant Date Fair
Value Of Stock and
Option Awards ($)(2) | |
|---|
Greg L. Armstrong | | | — | | | — | | | — | |
Harry N. Pefanis | | | — | | | — | | | — | |
Willie Chiang | | | 7/5/17 | | | 65,000 | (1) | | 1,714,700 | |
Al Swanson | | | 7/5/17 | | | 35,000 | (1) | | 923,300 | |
Daniel J. Nerbonne | | | 7/5/17 | | | 35,000 | (1) | | 923,300 | |
John vonBerg | | | 7/5/17 | | | 35,000 | (1) | | 923,300 | |
(1)
(1)- Represents performance-based phantom units granted in August 2023. These phantom units
which includewill potentially vest on the August 2026 distribution date at a scaled payout range of between 0% and 200% based on: (i) with respect to 50% of the performance-based award, PAA’s TSR over the three-year period ending June 30, 2026 relative to the TSR of the TSR Comparator Peer Group described on page 31 (payout may be reduced if absolute TSR is negative); and (ii) with respect to the other 50% of the performance-based award, PAA achieving cumulative DCF per CUE of $7.45 over the three-year period ending June 30, 2026 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 2026 is greater than the upper end of our guidance range). DERs payableassociated with these performance-based awards will accrue during the three-year performance period and be paid in cash in a lump sum on the August 2026 distribution date with respect to the number of such phantom units, if any, that vest on such date.
(2)
Represents time-based phantom units granted in August 2023. These phantom units will vest 100% on the May 2019August 2026 distribution payment date.
(2) DERs associated with these time-based awards will accrue for the first year and such accrued amount will be paid in cash in a lump sum on the August 2024 distribution date; beginning in November 2024, DERs on such time-based portion will be paid quarterly until the associated phantom units vest.
(3)
Represents the aggregate grant date fair values of LTIP phantom units granted in 2017August 2023 based on the probable outcome of underlying performance conditions pursuant to FASB ASC Topic 718. Vesting of the LTIPFor phantom units grantedunit grants awarded in 2017 wasAugust 2023, 75% were deemed probable of occurringvesting on the grant date. Therefore, theThe maximum grant date fair value of phantom unit grants awarded in 2017 isAugust 2023, assuming that the same as the value reported in the table.highest level of performance conditions will be met, was $4,877,705 for Mr. Chiang, $1,537,358 for each of Messrs. Swanson and McGee, and $1,981,333 for each of Messrs. Chandler and Goebel.
Narrative Disclosure to Summary Compensation Table
A narrative description of all material factors necessary to an understanding of the information included in the above Summary Compensation Table is included in "—“— Compensation Discussion and Analysis"Analysis” and in the footnotes to such table.
Mr. ArmstrongChiang’s previous employment agreement was amended and restated in connection with his promotion to CEO in October 2018. Pursuant to the amended and restated agreement, which may be terminated by the Company or by Mr. Chiang at any time, Mr. Chiang’s compensation, which is employed as Chairmandescribed throughout this Executive Compensation section, is subject to adjustment by the Compensation Committee and Chief Executive Officer. full Board.
The initial three-year term of Mr.
Armstrong's employment agreement commenced on June 30, 2001, and is automatically extended for one year on June 30 of each year (such that the term is reset to three years) unless Mr. Armstrong receives notice from the chairman of the compensation committee that the Board has elected not to extend the agreement. Mr. Armstrong has agreed, during the term of the agreement and for five years thereafter, not to disclose (subject to typical exceptions, including, but not limited to, requirement of law or prior disclosure by a third party) any confidential information obtained by him while employed under the agreement. The agreement provided for a base salary of $330,000 per year, subject to annual review. In 2005, Mr. Armstrong's annual salary was increased to $375,000. For 2016 and 2017, Mr. Armstrong unilaterally elected to forego approximately 90% of his annual base salary.
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Mr. Pefanis is employed as President and Chief Commercial Officer. The initial three-year term of Mr. Pefanis'Pefanis’ current employment agreement commenced on June 30, 2001, and is automatically extended for one year on June 30 of each year (such that the term is reset to three years) unless Mr. Pefanis receives notice from the Chairman of the Board that the Board has elected not to extend the agreement. Pursuant to Mr. Pefanis has agreed, during the term of thePefanis’ agreement, and for one year thereafter, not to disclose (subject to typical exceptions) any confidential information obtained by him while employed under the agreement. The agreement provided for a base salary of $235,000 per year, subject to annual review. In 2005, Mr. Pefanis' annual salary was increased to $300,000, and in 2017, his annual salary was increased to $400,000.
In connection with Mr. Chiang's employment in August 2015, GP LLC and Mr. Chiang entered into an agreement setting forth the terms of his employment. The agreement,Pefanis’ compensation, which may be terminated by either party at any time, provides for a base salary of $250,000 per year, and a minimum bonus of $500,000 for 2015 and $1.25 million for each of 2016 and 2017. GP LLC's obligation to pay the minimum bonusis described throughout this Executive Compensation section, is subject to Mr. Chiang's continued employment through the bonus payment date. For 2016, in consideration of weaker than expected financial and operating performance and challenging industry conditions, Mr. Chiang elected to forego his right to receive a cash bonus. Mr. Chiang was hired with the expectation that, contingent on his performance, he would be offered the top executive leadership position of GP LLC (the "Executive Promotion") no later than December 31, 2018 (the "Reference Date"). Consistent with such expectation and as an inducement to Mr. Chiang, Mr. Chiang's employment agreement provides for the accelerated vesting of the phantom units and AAP Management Units he received in 2015 in the event his employment is terminated under certain circumstances prior to the Reference Date. These circumstances include the following: (i) if Mr. Chiang has not received the Executive Promotion and is terminated other than for cause prior to the Reference Date; (ii) if Mr. Chiang has not received the Executive Promotionadjustment by the Reference DateCompensation Committee and Mr. Chiang resigns within 90 days thereafter or if Mr. Chiang has not received the Executive Promotion and terminates his employment for "good reason" prior to the Reference Date; and (iii) if a change of control occurs prior to the Reference Date and in connection therewith Mr. Chiang is not designated to receive the Executive Promotion and terminates his employment within 90 days of such change of control. Mr. Chiang's employment agreement also provides that in the event of his death or disability prior to the second anniversary of his employment date under circumstances where less than 187,760 of his AAP Management Units have previously become "earned", he will immediately vest in such number of AAP Management Units as may be necessary to cause the number of vested AAP Management Units to equal 187,760. Mr. Chiang also entered into ancillary agreements pursuant to which he has agreed to maintain confidentiality and not to solicit customers, assets or employees for a period of two years following termination of his employment. In 2017, Mr. Chiang's annual salary was increased to $400,000.
full Board. See "—Compensation Discussion and Analysis" for a discussion of how we use salary and bonus to achieve compensation objectives. See "—“— Potential Payments upon Termination or Change-In-Control"Change-In-Control” for a discussion of the provisions in Messrs. Armstrong's, Pefanis' and Chiang'sMr. Pefanis’ employment agreementsagreement related to termination, change of control and related payment obligations.
Outstanding Equity Awards at Fiscal Year-End
The following table sets forth certain information regarding outstanding equity awards as in effect at December 31, 20172023 with respect to our Named Executive Officers:
| | | Name | | | | Unit Awards | | |
| | Number of
Shares or
Units of Stock
That Have
Not Vested (#) | | | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)(1) | | | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested (#) | | | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested ($)(1) | | |
| | | Willie Chiang | | | | | | — | | | | | | | — | | | | | | | 500,000(2) | | | | | | | 7,575,000 | | | |
| | | | | | | | | — | | | | | | | — | | | | | | | 62,870(3) | | | | | | | 952,481 | | | |
| | | | | | | | | 150,300(5) | | | | | | | 2,277,045 | | | | | | | 150,300(6) | | | | | | | 2,277,045 | | | |
| | | | | | | | | 220,000(7) | | | | | | | 3,333,000 | | | | | | | 220,000(8) | | | | | | | 3,333,000 | | | |
| | | | | | | | | 162,050(9) | | | | | | | 2,455,058 | | | | | | | 162,050(10) | | | | | | | 2,455,058 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Harry Pefanis | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Al Swanson | | | | | | — | | | | | | | — | | | | | | | 25,150(3) | | | | | | | 381,023 | | | |
| | | | | | | | | 60,100(5) | | | | | | | 910,515 | | | | | | | 60,100(6) | | | | | | | 910,515 | | | |
| | | | | | | | | 69,300(7) | | | | | | | 1,049,895 | | | | | | | 69,300(8) | | | | | | | 1,049,895 | | | |
| | | | | | | | | 51,075(9) | | | | | | | 773,786 | | | | | | | 51,075(10) | | | | | | | 773,786 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Richard McGee | | | | | | — | | | | | | | — | | | | | | | 25,150(3) | | | | | | | 381,023 | | | |
| | | | | | | | | 60,100(5) | | | | | | | 910,515 | | | | | | | 60,100(6) | | | | | | | 910,515 | | | |
| | | | | | | | | 69,300(7) | | | | | | | 1,049,895 | | | | | | | 69,300(8) | | | | | | | 1,049,895 | | | |
| | | | | | | | | 51,075(9) | | | | | | | 773,786 | | | | | | | 51,075(10) | | | | | | | 773,786 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Chris Chandler | | | | | | — | | | | | | | — | | | | | | | 25,150(3) | | | | | | | 381,023 | | | |
| | | | | | | | | 250,000(4) | | | | | | | 3,787,500 | | | | | | | 250,000(4) | | | | | | | 3,787,500 | | | |
| | | | | | | | | 60,100(5) | | | | | | | 910,515 | | | | | | | 60,100(6) | | | | | | | 910,515 | | | |
| | | | | | | | | 89,350(7) | | | | | | | 1,353,653 | | | | | | | 89,350(8) | | | | | | | 1,353,653 | | | |
| | | | | | | | | 65,825(9) | | | | | | | 997,249 | | | | | | | 65,825(10) | | | | | | | 997,249 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Jeremy Goebel | | | | | | — | | | | | | | — | | | | | | | 25,150(3) | | | | | | | 381,023 | | | |
| | | | | | | | | 250,000(4) | | | | | | | 3,787,500 | | | | | | | 250,000(4) | | | | | | | 3,787,500 | | | |
| | | | | | | | | 60,100(5) | | | | | | | 910,515 | | | | | | | 60,100(6) | | | | | | | 910,515 | | | |
| | | | | | | | | 89,350(7) | | | | | | | 1,353,653 | | | | | | | 89,350(8) | | | | | | | 1,353,653 | | | |
| | | | | | | | | 65,825(9) | | | | | | | 997,249 | | | | | | | 65,825(10) | | | | | | | 997,249 | | | |
| | | | | | | | | | | | | |
| | Unit Awards | |
|---|
Name | | Number of
Shares or
Units of Stock
That Have
Not Vested (#) | | Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)(1) | | Equity
Incentive
Plan Awards:
Number of
Unearned
Shares,
Units or
Other Rights
That Have
Not Vested (#) | | Equity
Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares,
Units or
Other Rights
That Have
Not Vested ($)(1) | |
|---|
Greg L. Armstrong | | | 50,000 | (2) | | 1,032,000 | | | — | | | — | |
Harry N. Pefanis | | |
45,000 |
(2) | |
928,800 | | |
— | | |
— | |
Willie Chiang | | |
— | | |
— | | |
375,521 |
(3) | |
7,759,084 | |
| | | — | | | — | | | 120,000 | (5) | | 2,476,800 | |
| | | 110,000 | (6) | | 2,270,400 | | | 55,000 | (6) | | 1,135,200 | |
| | | 65,000 | (8) | | 1,341,600 | | | — | | | — | |
Al Swanson | | |
33,333 |
(2) | |
687,993 | | |
— | | |
— | |
| | | 92,000 | (6) | | 1,898,880 | | | 46,000 | (6) | | 949,440 | |
| | | 35,000 | (8) | | 722,400 | | | — | | | — | |
Daniel J. Nerbonne | | |
18,000 |
(2) | |
371,520 | | |
— | | |
— | |
| | | — | | | — | | | 56,328 | (4) | | 1,163,855 | |
| | | 63,333 | (6) | | 1,307,193 | | | 31,667 | (6) | | 653,607 | |
| | | 25,000 | (7) | | 516,000 | | | — | | | — | |
| | | 35,000 | (8) | | 722,400 | | | — | | | — | |
John vonBerg | | |
25,000 |
(2) | |
516,000 | | |
— | | |
— | |
| | | 35,000 | (8) | | 722,400 | | | — | | | — | |
(1)
(1)- Market value of phantom units reported in these columns is calculated by multiplying the closing market price ($
20.64)15.15) of ourPAA’s common units aton December 29, 20172023 (the last trading day of the fiscal year) by the number of units. No discount is applied for remaining performance threshold or service period requirements. Market value of AAP Management Units is calculated by (i) assuming that such AAP Management Units are converted into AAP units based on the conversion factor of approximately 0.941 AAP units and PAGP Class B shares for each AAP Management Unit, (ii) assuming the exchange of the resulting AAP units and PAGP Class B shares for PAGP Class A shares on a one-for-one basis, and (iii) multiplying such resulting number of PAGP Class A shares by the closing market price ($21.95) of PAGP's Class A shares at December 29, 2017 (the last trading day of the fiscal year).
(2)
Represents the unvested portion of phantom units granted to Mr. Chiang in 2013 under our Long-Term Incentive Plan. All performance thresholds have been met. Accordingly, subject to continued employment, theseAugust 2018. These phantom units, which were granted in connection with Mr. Chiang’s promotion to CEO, will vest as follows: (i) 25% will vest upon the later of October 1, 2023 and the first distribution date on which PAA will have generated DCF per common unit of at least $3.00 on a trailing four quarter basis, and (ii) 75% will vest upon the August 2018later of October 1, 2023 and the first distribution date.date on which PAA will have generated DCF per common unit of at least $3.50 on a trailing four quarter basis, in both cases with the initial performance-related measurement period beginning on or after January 1, 2021. Upon vesting, the phantom units are payable on a one-for-one basis in PAA common units. All of the DERs associated with theseAny phantom units are currently payable.or DERs that have not vested by October 1, 2025 will expire at that time. The DERs expire when the associated phantom units vest.
(3)Represents the pre-conversion number of AAP Management Units held by Mr. Chiang, each of which represents a profits interest in AAP, entitling him to participate in future profits and losses from operations, current distributions from operations, and an interest in future appreciationhave associated DERs that have vested or depreciation in AAP's asset values, but does not represent an interest in the capital of AAP on the
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applicable grant date of the AAP Management Units. In March 2018, these AAP Management Units were modified such that they will become earnedvest as follows: (i) 50% will become earned uponone-third vested on the generation byMay 2019 distribution date as a result of PAA of distributable cash flowgenerating DCF per common unit of at least $1.90 per common unit$2.50 on a trailing four quarter basis, (ii) 25%one-third will become earned uponvest on the generation byfirst distribution date on which PAA of distributable cash flowgenerates DCF per common unit of at least $2.10$2.60 on a trailing four quarter basis, and (iii) one-third will vest on the first distribution date on which PAA generates DCF per common unit of at least $2.80 on a trailing four quarter basis; provided that in the case of the performance thresholds described in clauses (ii) and (iii) immediately preceding, the applicable trailing four quarter period must begin on or after January 1, 2020.
(3)
Represents 50% of phantom units granted in August 2019 that will vest on the first distribution date following PAA’s achievement of DCF per common unit of at least $2.65 on a trailing four quarter basis. The applicable trailing four quarter period for determining whether the requisite DCF per common unit has been achieved for vesting of such phantom units may not begin until after December 31, 2020. The associated DERs will vest on the first distribution date following January 1, 2021 on which PAA achieves DCF per common unit of at least $2.50 on a trailing four quarter basis. Any phantom units and associated DERs that have not vested by the August 2024 distribution date will expire at that time.
(4)
Represents the applicable portion of one-time special retention phantom unit awards granted in November 2019. The original terms of these phantom units provided that they would vest (i) 50% on the August 2026 distribution date, (ii) 25% on the later of the August 2026 distribution date and the first distribution date following PAA’s achievement of DCF per common unit and CUE of at least $2.80 on a trailing four quarter basis, and (iii) 25% will become earned uponon the generation by PAAlater of distributable cash flowthe August 2026 distribution date and the first distribution date following PAA’s achievement of DCF per common unit and CUE of at least $2.30 per common unit$3.15 on a trailing four quarter basis. Distributable cash flow is subjectVesting of a portion of the associated DERs was also tied to adjustment under certain circumstances to account for significant asset sales. These AAP Management Units are subject to a call right in the event Mr. Chiang's employment is terminated under certain circumstances prior to December 31, 2022. If Mr. Chiang remains employed after such date, his AAP Management Units will be deemed to have vested. Mr. Chiang's employment agreement provides for the accelerated vestingPAA’s achievement of his AAP Management Units under certain circumstances prior to December 31, 2018. See "—Employment Contracts" and "—Potential Payments Upon Termination or Change-in-Control."(4)Represents AAP Management Units originally granted to Mr. Nerbonne in July 2015. In March 2018, these AAP Management Units were modified such that they will become earned as follows: (i) 25% upon the generation by PAA of distributable cash flow of $1.90specified DCF per common unit or more on a trailing four quarter basis; (ii) 25% uponand CUE levels. The vesting terms with respect to the generation by PAAperformance-based portion of distributable cash flow of $2.10 per common unit or more on a trailing four quarter basis; (iii) 25% upon the generation by PAA of distributable cash flow of $2.30 per common unit or more on a trailing four quarter basis; and (iv) 25% upon the generation by PAA of distributable cash flow of $2.50 per common unit or more on a trailing four quarter basis. Distributable cash flow will be subject to adjustment under certain circumstances to account for significant asset sales.
(5)Represents phantom units granted to Mr. Chiang in 2015 under our Long-Term Incentive Plan. In March 2018, the performance thresholds for these phantom units (50% of the amount awarded) were modified so that they became tied toamended in February 2022. As amended, the achievement of certain levels of distributable cash flow per commonNovember 2019 phantom unit on a trailing four quarter basis as opposed to annualized distributions per common unit. Taking such modifications into account, the phantom unitsawards will vest as follows: (i) 40%50% will vest on the laterAugust 2026 distribution date (this is unchanged from the original terms), and (ii) up to 50% will potentially vest at a scaled payout range of between 0% and 100% based on the TSR ranking of PAA relative to a designated comparator group as measured over a four and one-half year period beginning on January 1, 2022 and ending on June 30, 2026. The unvested DERs associated with the November 2019 phantom unit awards that were originally tied to achievement of DCF/CUE targets were also amended such that they began accruing on January 1, 2022 and will be paid in cash in a lump sum on the August 20182026 distribution date andwith respect to the date PAA generates distributable cash flownumber of $2.30 per common unitphantom units, if any, that vest on a trailing four quarter basis; (ii) 30%such date.
(5)
Represents time-based phantom units granted in August 2021 that will vest on the later ofAugust 2024 distribution date. The associated DERs accrued for the first year and such accrued amount was paid in cash in a lump sum on the August 20192022 distribution date anddate; beginning in November 2022, the date PAA generates distributable cash flow of $2.40 per common unit on a trailing four quarter basis; and (iii) 30% on the later of the August 2020 distribution date and the date PAA generates distributable cash flow of $2.50 per common unit on a trailing four quarter basis. Distributable cash flow will be subject to adjustment under certain circumstances to account for significant asset sales. The phantom units also vest upon termination of employment under certain circumstances. See "—Employment Contracts" and "—Potential Payments Upon Termination or Change-in-Control." Any phantom units that have not vested as of the August 2021 distribution date will be forfeited. Upon vesting, the phantom units are payable on a one-for-one basis in common units. The phantom units have associated DERs that are currently vested and payablebegan being paid quarterly in cash on each distribution payment date.
(6)
Represents the target number of performance-based phantom units granted in 2016 under our Long-Term Incentive Plan. In March 2018, the performance thresholds for these phantom units were modified soAugust 2021 that they became tied to the achievement of certain levels of distributable cash flow per common unit on a trailing four quarter basis as opposed to annualized distributions per common unit. Taking such modifications into account, the phantom units will vest as follows: (i) one-third shallpotentially vest on the August 20192024 distribution date at a scaled payout range of between 0% and 200% based on: (i) with respect to 50% of the performance-based award, PAA’s TSR over the three-year period ending June 30, 2024 compared to the TSR of the TSR Comparator Peer Group (payout may be reduced if absolute TSR is negative); and (ii) one-sixth shallwith respect to the other 50% of the performance-based award, PAA achieving cumulative DCF per CUE of $6.00 over the three-year period ending June 30, 2024 (payout may be decreased or increased by 50 gross percentage points (but not above 200%) based on PAA’s leverage ratio as of June 30, 2024 compared to the
target leverage ratio set forth in PAA’s multi-year plan as of August 2021). As of December 31, 2023, the estimated payout percentage for the TSR portion of these performance-based phantom units was approximately 157% and the estimated payout percentage for the DCF/CUE portion was approximately 200%. DERs will accrue during the three-year performance period and be paid in cash in a lump sum on the August 2024 distribution date with respect to the number of phantom units, if any, that vest on such date. Any phantom units and associated DERs that have not vested by the August 2024 distribution date will expire at that time.
(7)
Represents time-based phantom units granted in August 2022 that will vest on the August 20202025 distribution date, (iii) one-sixth shalldate. The associated DERs accrued for the first year and such accrued amount was paid in cash in a lump sum on the August 2023 distribution date; beginning in November 2023, the associated DERs began being paid quarterly in cash on each distribution payment date.
(8)
Represents the target number of performance-based phantom units granted in August 2022 that will potentially vest on the August 20212025 distribution date at a scaled payout range of between 0% and (iv) one-third shall200% based on: (i) with respect to 50% of the performance-based award, PAA’s TSR over the three-year period ending June 30, 2025 compared to the TSR of the TSR Comparator Peer Group (payout may be reduced if absolute TSR is negative); and (ii) with respect to the other 50% of the performance-based award, PAA achieving cumulative DCF per CUE of $7.05 over the three-year period ending June 30, 2025 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 2025 is greater than 3.5x). DERs will accrue during the three-year performance period and be paid in cash in a lump sum on the August 2025 distribution date with respect to the number of phantom units, if any, that vest on such date. Any phantom units and associated DERs that have not vested by the August 2025 distribution date will expire at that time.
(9)
Represents time-based phantom units granted in August 2023 that will vest on the August 20222026 distribution date. The associated DERs will accrue for the first year and such accrued amount will be paid in cash in a lump sum on the August 2024 distribution date; beginning in November 2024, the associated DERs will be paid quarterly in cash on each distribution payment date.
(10)
Represents the target number of performance-based phantom units granted in August 2023 that will potentially vest on the August 2026 distribution date provided that PAA shall have generated distributable cash flowat a scaled payout range of at least $2.30 per common unit on a trailing four quarter basisbetween 0% and further provided, that vesting of this portion200% based on: (i) with respect to 50% of the performance-based award, PAA’s TSR over the three-year period ending June 30, 2026 compared to the TSR of the TSR Comparator Peer Group (payout may be reduced if absolute TSR is negative); and (ii) with respect to the other 50% of the performance-based award, PAA achieving cumulative DCF per CUE of $7.45 over the three-year period ending June 30, 2026 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 2026 is greater than the upper end of our guidance range). DERs will accrue during the three-year performance period and be paid in cash in a lump sum on the August 2026 distribution date with respect to the number of phantom units, may be acceleratedif any, that vest on such that (x) one-sixth of the phantom units will vest prior to the August 2022 distribution date if and when PAA generates distributable cash flow of at least $2.50 per common unit on a trailing four quarter basis; and (y) one-sixth of the phantom units will vest prior to the August 2022 distribution date if and when PAA generates distributable cash flow of at least $2.65 per common unit on a trailing four quarter basis.date. Any phantom units
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and associated DERs that have not vested as ofby the August 20222026 distribution date will be forfeited. Upon vesting, the phantom units are payable on a one-for-one basis in PAA common units. These phantom units include tandem DERsexpire at that will vest (i.e., commence receiving cash distributions as if the underlying common units were owned) as follows: (i) one-third shall vest upon and effective with the earlier to occur of the August 2018 distribution date and the first date following the date of grant on which we generate distributable cash flow of at least $2.30 per common unit on a trailing four quarter basis, (ii) one-third shall vest upon and effective with the earlier to occur of the August 2019 distribution date and the first date following the date of grant on which we generate distributable cash flow of at least $2.40 per common unit on a trailing four quarter basis, and (iii) one-third shall vest upon and effective with the earlier to occur of the August 2020 distribution date and the first date following the date of grant on which we generate distributable cash flow of at least $2.50 per common unit on a trailing four quarter basis. Distributable cash flow will be subject to adjustment under certain circumstances to account for significant asset sales.
(7)Represents phantom units granted to Mr. Nerbonne in 2016 under our Long-Term Incentive Plan. These phantom units, which include DERs payable in cash, will vest 100% on December 14, 2018.
(8)Represents phantom units granted in 2017 under our Long-Term Incentive Plan. These phantom units, which include DERs payable in cash, will vest 100% on the May 2019 distribution payment date.
time.
Option Exercises and Units Vested
We have never issued options under our long-term incentive plan; all of the grants awarded under our long-term incentive plan have been phantom unit grants. The following table sets forth certain information regarding the vesting of phantom units during the fiscal year ended December 31, 20172023 with respect to our Named Executive Officers.
| | | Name | | | | Unit Awards | | |
| | Number of
Units
Acquired on
Vesting (#)(1) | | | | Value Realized
on
Vesting ($) | | |
| | | Willie Chiang | | | | | | 430,103(2) | | | | | | | 6,559,071(3) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Harry Pefanis | | | | | | — | | | | | | | — | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Al Swanson | | | | | | 172,046(2) | | | | | | | 2,623,702(3) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Richard McGee | | | | | | 172,046(2) | | | | | | | 2,623,702(3) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Chris Chandler | | | | | | 172,046(2) | | | | | | | 2,623,702(3) | | | |
| | | | | | | | | | | | | | | | | | | |
| | | Jeremy Goebel | | | | | | 172,046(2) | | | | | | | 2,623,702(3) | | | |
| | | | | | | | | 30,000 | | | | | | | 352,800(4) | | | |
| | | | | | | |
| | Unit Awards | |
|---|
Name | | Number of Units
Acquired on
Vesting (#) | | Value Realized
on Vesting ($) | |
|---|
Greg L. Armstrong | | | 50,000 | (1) | | 1,024,500 | (3) |
Harry N. Pefanis | | | 45,000 | (1) | | 922,050 | (3) |
Willie Chiang | | | — | | | — | |
Al Swanson | | | 33,334 | (1) | | 680,014 | (2) |
Daniel J. Nerbonne | | | 18,000 | (1) | | 367,200 | (2) |
John vonBerg | | | 25,000 | (1) | | 510,000 | (2) |
(1)
(1)- Represents the gross number of phantom units that vested during the year ended December 31,
2017.2023. The actual number of units delivered was net of income tax withholding.
(2)
Represents phantom units originally granted in August 2020 that vested in August 2023. Pursuant to the terms of the 2020 grants, (i) 50% of the phantom units were time based with vesting to occur in August 2023, and (ii) 50% of the phantom units were performance based with potential vesting to occur in August 2023 at a scaled payout range of between 0% and 200% based on: (A) with respect to 50% of the performance-based portion, PAA’s TSR over the three year period ending June 30, 2023 compared to the TSR of the applicable TSR peer group and (B) with respect to the other 50% of the performance-based portion, PAA achieving a cumulative adjusted DCF per CUE target of $5.90 over the three-year period ending June 30, 2023. With respect to the performance-based portion of the 2020 grants, the final payout percentage for the TSR portion was 75% (based on a TSR ranking of 11 out of 17) and the final payout percentage for the DCF/CUE portion was 182.6% (based on achieving cumulative DCF/CUE of $6.51). Taking all vesting criteria (50% time, 25% TSR and 25% DCF/CUE) into account, the 2020 grants paid out at 114.4% of target.
(3)
Consistent with the terms of the applicable Long-Term Incentive Plan, the value realized upon vesting is computed by multiplying the closing market price ($20.40)15.25) of ourPAA’s common units on August 11, 20172023 (the trading date immediately preceding the vesting date) by the number of units that vested.
(3)
(4)
Consistent with the terms of the applicable Long-Term Incentive Plan, the value realized upon vesting is computed by multiplying the closing market price ($20.49)11.76) of ourPAA’s common units on August 14, 2017December 30, 2022 (the trading date immediately preceding the vesting date) by the number of units that vested.
Pension Benefits
We sponsor
GP LLC sponsors a 401(k) plan that is available to all U.S. employees. We do not maintain any pension or defined benefit programs in which any of our employees, including the Named Executive Officers, participate.
Nonqualified Deferred Compensation and Other Nonqualified Deferred Compensation Plans
We do not maintain any nonqualified deferred compensation plans or programs in which any of our employees, including our Named Executive Officers, participate.
Potential Payments upon Termination or Change-in-Control
The following table sets forth potential amounts payable to the Named Executive Officers upon termination of employment under various circumstances, and as if terminated on December 31, 2017.2023.
| | | | | | | By
Reason of
Death
($) | | | | By
Reason of
Disability
($) | | | | By
Company
without
Cause
($) | | | | By
Executive
with Good
Reason
($) | | | | In
Connection
with a
Change In
Control
($) | | |
| | | Willie Chiang(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Equity Compensation | | | | | | 19,747,571(1) | | | | | | | 19,747,571(1) | | | | | | | 15,158,624(2) | | | | | | | — | | | | | | | 24,657,686(3) | | | |
| | | Total | | | | | | 19,747,571 | | | | | | | 19,747,571 | | | | | | | 15,158,624 | | | | | | | — | | | | | | | 24,657,686 | | | |
| | | Harry Pefanis(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Salary and Bonus | | | | | | 5,410,000(4) | | | | | | | 5,410,000(4) | | | | | | | 5,410,000(4) | | | | | | | 5,410,000(4) | | | | | | | 8,115,000(5) | | | |
| | | Health Benefits | | | | | | — | | | | | | | 38,595(6) | | | | | | | 38,595(6) | | | | | | | 38,595(6) | | | | | | | 38,595(6) | | | |
| | | Total | | | | | | 5,410,000 | | | | | | | 5,448,595 | | | | | | | 5,448,595 | | | | | | | 5,448,595 | | | | | | | 8,153,595 | | | |
| | | Al Swanson(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Equity Compensation | | | | | | 4,301,843(1) | | | | | | | 4,301,843(1) | | | | | | | 2,774,512(2) | | | | | | | — | | | | | | | 5,849,415(3) | | | |
| | | Total | | | | | | 4,301,843 | | | | | | | 4,301,843 | | | | | | | 2,774,512 | | | | | | | — | | | | | | | 5,849,415 | | | |
| | | Richard McGee(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Equity Compensation | | | | | | 4,301,843(1) | | | | | | | 4,301,843(1) | | | | | | | 2,774,512(2) | | | | | | | — | | | | | | | 5,849,415(3) | | | |
| | | Total | | | | | | 4,301,843 | | | | | | | 4,301,843 | | | | | | | 2,774,512 | | | | | | | — | | | | | | | 5,849,415 | | | |
| | | Chris Chandler(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Equity Compensation | | | | | | 12,484,358(1) | | | | | | | 12,484,358(1) | | | | | | | 9,111,663(2) | | | | | | | — | | | | | | | 14,478,855(3) | | | |
| | | Total | | | | | | 12,484,358 | | | | | | | 12,484,358 | | | | | | | 9,111,663 | | | | | | | — | | | | | | | 14,478,855 | | | |
| | | Jeremy Goebel(7) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Equity Compensation | | | | | | 12,484,358(1) | | | | | | | 12,484,358(1) | | | | | | | 9,111,663(2) | | | | | | | — | | | | | | | 14,478,855(3) | | | |
| | | Total | | | | | | 12,484,358 | | | | | | | 12,484,358 | | | | | | | 9,111,663 | | | | | | | — | | | | | | | 14,478,855 | | | |
| | | | | | | | | | | | | | | | |
| | By Reason
of Death
($) | | By Reason
of
Disability
($) | | By Company
without
Cause
($) | | By Executive
with Good
Reason
($) | | In Connection
with a
Change In
Control
($) | |
|---|
Greg L. Armstrong | | | | | | | | | | | | | | | | |
Salary and Bonus | | | 750,000 | (1) | | 750,000 | (1) | | 750,000 | (1) | | 750,000 | (1) | | 1,125,000 | (2) |
Equity Compensation | | | 1,032,000 | (3) | | 1,032,000 | (3) | | 1,032,000 | (4) | | 1,032,000 | (4) | | 1,032,000 | (5) |
Health Benefits | | | N/A | | | 39,423 | (6) | | 39,423 | (6) | | 39,423 | (6) | | 39,423 | (6) |
Tax Gross-up | | | N/A | | | N/A | | | N/A | | | N/A | | | — | (7) |
| | | | | | | | | | | | | | | | | |
Total | | | 1,782,000 | | | 1,821,423 | | | 1,821,423 | | | 1,821,423 | | | 2,196,423 | |
Harry N. Pefanis | | |
| | |
| | |
| | |
| | |
| |
Salary and Bonus | | | 800,000 | (1) | | 800,000 | (1) | | 800,000 | (1) | | 800,000 | (1) | | 1,200,000 | (2) |
Equity Compensation | | | 928,800 | (3) | | 928,800 | (3) | | 928,800 | (4) | | 928,800 | (4) | | 928,800 | (5) |
Health Benefits | | | N/A | | | 61,296 | (6) | | 61,296 | (6) | | 61,296 | (6) | | 61,296 | (6) |
Tax Gross-up | | | N/A | | | N/A | | | N/A | | | N/A | | | — | (7) |
| | | | | | | | | | | | | | | | | |
Total | | | 1,728,800 | | | 1,790,096 | | | 1,790,096 | | | 1,790,096 | | | 2,190,096 | |
Willie Chiang(10) | | |
| | |
| | |
| | |
| | |
| |
Equity Compensation | | | 1,341,600 | (3) | | 1,341,600 | (3) | | 3,818,400 | (4) | | 2,476,800 | (4) | | 7,224,000 | (5) |
AAP Management Units | | | 3,879,542 | (11) | | 3,879,542 | (11) | | 7,759,084 | (8) | | 7,759,084 | (8) | | 7,759,084 | (9) |
| | | | | | | | | | | | | | | | | |
Total | | | 5,221,142 | | | 5,221,142 | | | 11,577,484 | | | 10,235,884 | | | 14,983,084 | |
Al Swanson(10) | | |
| | |
| | |
| | |
| | |
| |
Equity Compensation | | | 1,410,393 | (3) | | 1,410,393 | (3) | | 1,410,393 | (4) | | N/A | | | 4,258,713 | (5) |
| | | | | | | | | | | | | | | | | |
Total | | | 1,410,393 | | | 1,410,393 | | | 1,410,393 | | | N/A | | | 4,258,713 | |
Daniel J. Nerbonne(10) | | |
| | |
| | |
| | |
| | |
| |
Equity Compensation | | | 1,093,920 | (3) | | 1,093,920 | (3) | | 1,093,920 | (4) | | N/A | | | 3,570,720 | (5) |
AAP Management Units | | | N/A | | | N/A | | | — | (8) | | — | (8) | | 290,964 | (9) |
| | | | | | | | | | | | | | | | | |
Total | | | 1,093,920 | | | 1,093,920 | | | 1,093,920 | | | N/A | | | 3,861,684 | |
John vonBerg(10) | | |
| | |
| | |
| | |
| | |
| |
Equity Compensation | | | 1,238,400 | (3) | | 1,238,400 | (3) | | 1,238,400 | (4) | | N/A | | | 1,238,400 | (5) |
| | | | | | | | | | | | | | | | | |
Total | | | 1,238,400 | | | 1,238,400 | | | 1,238,400 | | | N/A | | | 1,238,400 | |
(1)
(1)- The
employment agreements between GP LLC and Messrs. Armstrong and Pefanis provide that if (i) their employment with GP LLC is terminated as a result of their death, (ii) they terminate their employment with GP LLC (a) because of a disability (as defined in Section 409A of the Code) or (b) for good reason (as defined below), or (iii) GP LLC terminates their employment without cause (as defined below), they are entitled to a lump-sum amount equal to the product of (1) the sum of their (a) highest annual base salary paid prior to their date of termination and (b) highest annual bonus paid or payable for any of the three years prior to the date of termination, and (2) the lesser of (i) two or (ii) the number of days remaining in the term of their employment agreement divided by 360. The amount provided in the table assumes for each executive a termination date of December 31, 2017, and also assumes a highest annual base salary of $375,000 and highest annual bonus of $-0- for
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Mr. Armstrong, and a highest annual base salary of $400,000 and highest annual bonus of $-0- for Mr. Pefanis.
The employment agreements between GP LLC and Messrs. Armstrong and Pefanis define "cause" as (i) willfully engaging in gross misconduct, or (ii) conviction of a felony involving moral turpitude. Notwithstanding, no act, or failure to act, on their part is "willful" unless done, or omitted to be done, not in good faith and without reasonable belief that such act or omission was in the best interest of GP LLC or otherwise likely to result in no material injury to GP LLC. However, neither Mr. Armstrong nor Mr. Pefanis will be deemed to have been terminated for cause unless and until there is delivered to them a copy of a resolution of the Board at a meeting held for that purpose (after reasonable notice and an opportunity to be heard), finding that Mr. Armstrong or Mr. Pefanis, as applicable, was guilty of the conduct described above, and specifying the basis for that finding. If Mr. Armstrong or Mr. Pefanis were terminated for cause, GP LLC would be obligated to pay base salary through the date of termination, with no other payment obligations triggered by the termination under the employment agreement or other employment arrangement.
The employment agreements between GP LLC and Messrs. Armstrong and Pefanis define "good reason" as the occurrence of any of the following circumstances: (i) removal by GP LLC from, or failure to re-elect them to, the positions to which Messrs. Armstrong and Pefanis were appointed pursuant to their respective employment agreements, except in connection with their termination for cause (as defined above); (ii) (a) a reduction in their rate of base salary (other than in connection with across-the-board salary reductions for all executive officers of GP LLC) unless such reduction reduces their base salary to less than 85% of their current base salary, (b) a material reduction in their fringe benefits, or (c) any other material failure by GP LLC to comply with its obligations under their employment agreements to pay their annual salary and bonus, reimburse their business expenses, provide for their participation in certain employee benefit plans and arrangements, furnish them with suitable office space and support staff, or allow them no less than 15 business days of paid vacation annually; or (iii) the failure of GP LLC to obtain the express assumption of the employment agreements by a successor entity (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of GP LLC.
(2)Pursuant to their employment agreements, if Messrs. Armstrong and Pefanis terminate their employment with GP LLC within three (3) months of a change in control (as defined below), they are entitled to a lump-sum payment in an amount equal to the product of (i) three and (ii) the sum of (a) their highest annual base salary previously paid to them and (b) their highest annual bonus paid or payable for any of the three years prior to the date of such termination. The amount provided in the table assumes a change in control and termination date of December 31, 2017, and also assumes a highest annual base salary of $375,000 and highest annual bonus of $-0- for Mr. Armstrong, and a highest annual base salary of $400,000 and highest annual bonus of $-0- for Mr. Pefanis.
In conjunction with events occurring in 2005, 2010 and 2013, Messrs. Armstrong and Pefanis executed various agreements waiving their rights to terminate employment and receive separation benefits under their employment agreements. In connection with such waivers, the definition of "Change in control" in the employment agreements was also modified to mean, and will be deemed to occur upon, one or more of the following events: (i) any person (other than PAGP or its wholly owned subsidiaries), including any partnership, limited partnership, syndicate or other group deemed a "person" for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), becomes the beneficial owner, directly or indirectly, of 50% or more of the membership interest in GP LLC or 50% or more of the outstanding limited partnership interest of PAGP; (ii) any person (other than PAGP or its wholly owned subsidiaries), including any partnership, limited partnership, syndicate or other group deemed a "person" for purposes of Section 13(d) or 14(d) of the Exchange Act, becomes the beneficial owner, directly or indirectly, of 50% or more of the membership interest in PAGP GP; (iii) PAGP ceases to beneficially own, directly or indirectly, more than 50% of the membership interest in GP LLC; (iv) the "Owner Affiliates", as defined in such agreements, cease to beneficially own, directly or indirectly, more than 50% of the membership interest in PAGP GP; or (v) there has been a direct or indirect transfer, sale, exchange or other disposition in a single transaction or series of transactions (whether by merger or otherwise) of all or substantially all of the assets of PAGP or PAA to one or more persons who are not affiliates of PAGP ("third party" or "parties"), other
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than a transaction in which the Owner Affiliates continue to beneficially own, directly or indirectly, more than 50% of the issued and outstanding voting securities of such third party or parties immediately following such transaction.
(3)The lettersletter evidencing the 2013 phantom unit grants awarded to Messrs. Armstrong, Pefanis, Swanson, Nerbonne and vonBerg, the 2015August 2018 phantom unit grant awarded to Mr. Chiang and the 2017 phantom unit grants awarded to Messrs. Chiang, Swanson, Nerbonne and vonBerg, provideprovides that in the event of theirhis death or disability (as defined below), all of their then outstanding phantom units and associated DERs will be deemed nonforfeitable, and (i) any unvested phantom units that had satisfied all of the vesting criteria as of the date of their termination but for the passage of time would vest on the next following distribution date and (ii) the remaining unvested outstanding phantom units will vest on the distribution date on which the vesting criteria is met. The letters evidencing the 2016 phantom unit grants awarded to Messrs. Chiang, Swanson and Nerbonne provide that in the event of their death or disability (as defined below), the following terms shall apply: (a) if such death or disability takes place prior toafter the second anniversary of the date of the applicable grant, (August 25, 2018), all of theirhis then outstanding phantom units and associated DERs will be automatically forfeited as ofawarded under such date, and (b) if such death or disability takes place on or after such second anniversary, all of their then outstanding phantom unitsgrants will be deemed nonforfeitable and will vest on the next following distribution date (and any associated DERs shall not be forfeited but shall vest, be payable and expire according to the terms of the applicable phantom unit grant letter).
The letters evidencing the August 2019, August 2021, August 2022 and August 2023 phantom unit grants awarded to Messrs. Chiang, Swanson, McGee, Chandler and Goebel provide that in the event of their death or disability after the first anniversary of the date of the applicable grant, all of their then outstanding phantom units awarded under such grants will be deemed nonforfeitable and will vest on the next following distribution date (and any associated DERs shall not be forfeited but shall vest, be payable and expire according to the terms of the applicable phantom unit grant letter).
The letters evidencing the November 2019 phantom unit grants awarded to Messrs. Chandler and Goebel, as amended, provide that in the event of their death or disability after the second anniversary of the date of grant, all of their then outstanding phantom units awarded under such grants and associated DERs will be deemed nonforfeitable and will vest on the next distribution date (assuming a TSR payout percentage of 100% with respect to the performance-based portion of the award).
For these purposes, "disability"“disability” means a physical or mental infirmity that impairs the ability substantially to perform duties for a period of eighteen (18) months or that the general partner otherwise determines constitutes a disability.
Assuming death or disability occurred on December 31, 2017, (A)2023, (i) all of the phantom unit grants and associated DERs held by Messrs. Armstrong, Pefanis, Swanson, Nerbonne and vonBerg pursuant to their 2013 grant letters and all of the phantom units grants and associated DERs held by Messrs. Chiang, Swanson, NerbonneMcGee, Chandler and vonBergGoebel pursuant to their 2017August 2019, August 2021 and August 2022 grant letters would have become nonforfeitable effective as of December 31, 2017, and would vest on February 14, 2018 (the February 2018 distribution date) given that the performance vesting criteria for all of the phantom units issued pursuant to such 2013 grant letters has already been satisfied, (B) all of the phantom unit grants and associated DERs held by Messrs. Chiang, Swanson and Nerbonne pursuant to their 2016 grant letters would have become automatically forfeited as of such date given that such death or disability would have taken place prior to the second anniversary of the date of such grants, and (C)letters; all of the phantom units and associated DERs held by Mr. Chiang pursuant to his 2015 phantom unitAugust 2018 grant letter would not have been forfeited but would vest on the future distribution date on which the applicable distribution vesting criteria is satisfied. At December 31, 2017, an annualized distribution level of $1.20 was deemed probable of occurrence. Because none of the performance thresholds contained in Mr. Chiang's 2015 phantom unit grant letter were deemed probable of occurrence as of December 31, 2017, no value is given in the table. All of the performance thresholds for the 2013 LTIP grants have been satisfiedletter; and all outstanding 2013 grants were assumed to vest as a result. The 2017 LTIP grants were also deemed probable of vesting. The dollar value given for the Named Executive Officers who hold 2013 and 2017 phantom units is based on the market value of PAA's common units on December 29, 2017 ($20.64 per unit) without discount for service period.(4)Pursuant to the 2013 phantom unit grants held by Messrs. Armstrong, Pefanis, Swanson, Nerbonne and vonBerg and the 2017 phantom unit grants awarded to Messrs. Chiang, Swanson, Nerbonne and vonBerg, in the event their employment is terminated other than in connection with a change of control (as defined in footnote 5 below) or by reason of death or disability (as defined in footnote 3 above), all of the phantom units and associated DERs (regardlessheld by Messrs. Chandler and Goebel pursuant to their November 2019 grant letters would have become nonforfeitable as of vesting) thensuch date and would have vested on the February 2024 distribution date, and (ii) all of the phantom units and associated DERs held by Messrs. Chiang, Swanson, McGee, Chandler and Goebel pursuant to their August 2023 grant letters would have been forfeited. The dollar value given is based on the market value of PAA’s common units on December 29, 2023 ($15.15 per unit).
(2)
Other than as described below, pursuant to the grant letters for the currently outstanding under such phantom unit grants would automatically be forfeited as ofawarded to the date of termination; provided, however, thatNEOs, if GP LLC terminated their employment other than for cause (as defined in footnote 53 below), anyall of their unvested phantom units that had satisfied all of the vesting criteria as of the date of their termination but for the passage of time would be deemed nonforfeitable and would vest on the next following distribution date. Pursuant to the 2016 phantom unitawarded under such grants held by Messrs. Chiang, Swanson and Nerbonne, in the event their employment is terminated other than in connection with a change of control (as defined in footnote 5 below) or by reason of death or disability (as defined in footnote 3 above), all of the phantom units and associated DERs (regardless of vesting) then outstanding under
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such phantom unit grants would automatically be forfeited as of the date of termination; provided, however, that if GP LLC terminated their employment other than for cause (as defined in footnote 5 below), any unvested phantom units that would, but for such termination and forfeiture, vest on a specified distribution date (either August 2019, August 2020, August 2021 or August 2022) during the twelve month period immediately following such termination, shall be deemed nonforfeitable on the date of such termination and shall vest on the next following distribution date. Mr. Chiang's
The phantom units granted to Messrs. Chandler and Goebel in November 2019, as amended, provide that if their employment agreement also provides that his 2015 phantom unit grant will vest in full if he has not received the Executive Promotion and is terminated by GP LLC other than for cause (as defined in footnote 3 below), a portion of the unvested phantom units will be deemed nonforfeitable and will vest on the next following distribution date, with the size of the portion starting at 40% for a termination prior to November 21, 2022, and increasing by 20% per year thereafter such that 100% of the unvested phantom units would be deemed nonforfeitable following a termination other than for cause on or he terminatesafter November 21, 2024.
The phantom units granted to Messrs. Chiang, Swanson, McGee, Chandler and Goebel in August 2021, August 2022 and August 2023 provide that if their employment is terminated other than for cause prior to the first anniversary of the applicable date of grant, all of their unvested phantom units will be forfeited as of the date of such termination. If such termination occurs after the first anniversary of the applicable date of grant, a pro rata portion of the unvested phantom units (based on the portion of the three-year vesting period that has elapsed since the grant date and assuming a payout at target for any performance-based phantom units) will be deemed nonforfeitable and will vest on the next following distribution date.
Mr. Chiang’s August 2018 phantom unit grant provides that if his employment is terminated other than for good reasoncause (as defined in footnote 3 below) a portion of the unvested phantom units will be deemed nonforfeitable and will vest on the next following distribution date, with the size of the portion starting at 20% for a termination prior to December 31, 2018 (see "—Employment Contracts"October 1, 2019, and increasing to 40% for additional information regarding Mr. Chiang's employment agreement). The dollar value amount provided assumes that (i)a termination other than for cause between October 1, 2019 and October 1, 2020, 60% for a termination other than for cause between October 1, 2020 and October 1, 2021 and 100% for a termination other than for cause on or after October 1, 2021.
Assuming our Named Executive Officers (other than Mr. Chiang) were terminated without cause on December 31, 2017, and (ii) Mr. Chiang had not received the Executive Promotion and was terminated without cause or terminated his employment for good reason on December 31, 2017. As a result of the foregoing, in the event of the termination of our Named Executive Officers under the circumstances described above on December 31, 2017,2023, (i) all of the phantom units covered by the 2013 phantom unit grants held by Messrs. Armstrong, Pefanis, Swanson, Nerbonne and vonBerg, the 2017August 2019 phantom unit grants held by Messrs. Chiang, Swanson, NerbonneMcGee, Chandler and vonBerg,Goebel; approximately 79% of the phantom units covered by the August 2021 phantom unit grants held by Messrs. Chiang, Swanson, McGee, Chandler and Goebel; approximately 46% of the 2015phantom units covered by the August 2022 phantom unit grants held by Messrs. Chiang, Swanson, McGee, Chandler and Goebel; 80% of the phantom units covered by the November 2019 phantom unit grants held by Messrs. Chandler and Goebel; and 100% of the phantom units covered by the August 2018 phantom unit grant held by Mr. Chiang would have become nonforfeitable as of such date and would have vested on or beforethe February 14, 2018 (the February 20182024 distribution date),date, and (ii) all remaining phantom units held by our Named Executive Officers would have become automatically forfeited as of such date of termination. That portion of thebeen forfeited. The dollar value given that is attributable to PAA phantom units is based on the market value of PAA'sPAA’s common units on December 29, 20172023 ($20.6415.15 per unit).Under the waiver signed in 2010 by Mr. Armstrong and Mr. Pefanis (see footnote 2 above), upon a termination of employment by GP LLC without cause or by the executive for good reason (in each case as defined in the relevant employment agreement), all of the executive's outstanding awards under the Long-Term Incentive Plan would immediately vest.
(5)
(3)
The letters evidencing phantom unit grants awarded to ourthe Named Executive Officers provide that in the event of a change in status (as defined below), all of the then outstanding phantom units
awarded under such grants and associated DERs will be deemed nonforfeitable, and such phantom units will vest in full (i.e., the phantom units will become payable in the form of one common unit per phantom unit) upon the next following distribution date. Additionally, Mr. Chiang's employment agreement provides that his 2015 phantom unit grants will vest in full if he terminates his employment within 90 days after a change of control (as defined below) prior to December 31, 2018 and in connection therewith he does not receive the Executive Promotion (see "—Employment Contracts" for additional information regarding Mr. Chiang's employment agreement). Assuming (i) that a change in status occurred on December 31, 2017, (ii) that a change of control occurred 90 days prior to December 31, 2017, and (iii) that, in connection with the change of control, Mr. Chiang did not receive the Executive Promotion and terminated his employment on December 31, 2017,2023, all outstanding phantom units awarded under such grants and the associated DERs would have become nonforfeitable as of December 31, 2017,such date and such phantom units would vesthave vested on the February 20182024 distribution date. That portion of theThe dollar value given that is attributable to PAA phantom units is based on the market value of PAA'sPAA’s common units on December 29, 20172023 ($20.6415.15 per unit), without discount for service period.
.
The phrase "change“change in status"status” means, with respect to a Named Executive Officer, the occurrence,(A) during the period (“protected period”) beginning two and a half months prior to and ending one year following a change of control (as defined below), of any of the following: (A) the termination of employment by GP LLC other than a termination for cause (as defined below), or (B) during the protected period, the termination of employment by the Named Executive Officer due to the occurrence, without the Named Executive Officer'sOfficer’s written consent, of (i) any material diminution in the Named Executive Officer'sOfficer’s authority, duties or responsibilities, (ii) any material reduction in the Named Executive Officer'sOfficer’s base salary or (iii) any other action or inaction that would constitute a material breach of the agreementapplicable grant letter by GP LLC.LLC, or (C) the termination of employment as a result of retirement on terms and timing that are approved by the CEO (or the Board in the case of the CEO).
The phrase "change“change of control"control” is defined in the 2013outstanding phantom unit grants awarded in 2018, 2019, 2021, 2022 and 2023 to mean, and is deemed to have occurred upon the occurrence of, one or more of the following events: (i) any Person (other than PAGP and any affiliate of PAGP that is controlled by PAGP) becomes the beneficial owner, directly or indirectly (in one transaction or a series of related transactions and whether by merger or otherwise), of 50% or more of the membership interest in PAGP GP; (ii) any Person (other than PAGP GP, LLC ceasingPAGP or any affiliate of PAGP that is controlled by PAGP) acquires (in one transaction or a series of related transactions and whether by merger or otherwise) direct or indirect control of the general partner interest of PAGP; (iii) PAGP ceases to beretain direct or indirect control (in one transaction or a series of related transactions and whether by merger or otherwise) of the general partner of our general partner; (ii)PAA; or (iv) the consummation of a reorganization, merger or consolidation with, or any direct or indirect sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of our partnership
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or GP LLC to any person and/or its affiliates, other than to us or GP LLC, including any employee benefit plan thereof; (iii) the consolidation, reorganization, merger, or any other similar transaction involving (A) a person other than us or GP LLC and (B) us, GP LLC or both; (iv) the persons who own membership interests in GP LLC as of the grant date ceasing to beneficially own, directly or indirectly, more than 50% of the membership interests of GP LLC; or (v) any person, including any partnership, limited partnership, syndicate or other group deemed a "person" for purposes of Section 13(d) or 14(d) of the Exchange Act, becoming the beneficial owner, directly or indirectly, of more than 49.9% of the membership interest in GP LLC. Notwithstanding the definition of change of control, no change of control is deemed to have occurred in connection with a restructuring or reorganization related to the securitization and sale to the public of direct or indirect equity interests in the general partner if (x) GP LLC retains direct or indirect control over the general partner and (y) the current members of GP LLC continue to own more than 50% of the member interest in GP LLC. The initial public offering of PAGP did not constitute a change of control under the phantom unit grant letters. The term "cause" is defined in the 2013 phantom unit grants to mean (i) the failure to perform the duties and responsibilities of a position at an acceptable level as reasonably determined in good faith by the CEO of GP LLC (or by the board in the case of the CEO), or (ii) the violation of GP LLC's Code of Business Conduct (unless waived in accordance with the terms thereof), in each case, with the specific failure or violation described in writing.
The phrase "change of control" is defined in phantom unit grants awarded subsequent to the 2013 grants to mean, and is deemed to have occurred upon the occurrence of, one or more of the following events: (i) the Persons who owned member interests in PAGP GP immediately following the closing of PAGP's initial public offering, including PAGP, and the respective Affiliates of such Persons (such owners and Affiliates being referred to as the "Owner Affiliates"), cease to own directly or indirectly at least 50% of the membership interests of such entity; (ii) (x) a "person" or "group" other than the Owner Affiliates becomes the "beneficial owner" directly or indirectly of 25% or more of the member interest in the general partner of PAGP,and (y) the member interest beneficially owned by such "person" or "group" exceeds the aggregate member interest in the general partner of PAGP beneficially owned, directly or indirectly, by the Owner Affiliates; or (iii) a direct or indirect transfer, sale, exchange or other disposition in a single transaction or series of transaction (whether by merger or otherwise) of all or substantially all of the assets of PAGP or PAA to, one or more Persons who are not Affiliates(other than PAGP or any affiliates of PAGP ("third partythat are controlled by PAGP). As used in this definition, “Person” shall include any “partnership, limited partnership, syndicate or parties"), other thangroup” constituting a transaction in which“person” within the Owner Affiliates continuesmeaning of such terms pursuant to beneficially own, directly or indirectly, more than 50%Sections 13(d) and 14(d) of the issued and outstanding voting securitiesSecurities Exchange Act of such third party or parties immediately following such transaction.
"Cause" is defined in Mr. Chiang's 2015 phantom unit grant agreement1934, as (i) substantial failure to perform the duties and responsibilities of his position at an acceptable level as reasonably determined in good faith by the CEO and President-COO of GP LLC (or if Mr. Chiang is the CEO, by vote of the Board) and after written notice specifying such failure in detail and after a reasonable period under the circumstances (determined by the CEO, or alternatively the Board, in good faith) such failure has continued without full correction by the executive, (ii) the executive's conviction of or guilty plea to the committing of an act or acts constituting a felony under the laws of the United States or any state thereof or any misdemeanor involving moral turpitude, or (iii) violation of GP LLC's Code of Business Conduct (unless waived in accordance with the terms thereof), in each case with the specific failure or violation described in writing.
"Cause"amended (the “Exchange Act”).
“Cause” is defined in the 20162018, 2019, 2021, 2022 and 20172023 phantom unit grant agreements as (i) failure to perform the duties and responsibilities of a position at an acceptable level as reasonably determined in good faith by the CEO of GP LLC (or by the Board in the case of the CEO), (ii) the conviction of or guilty plea to the committing of an act or acts constituting a felony under the laws of the United States or any state thereof (or Canada or any province thereof) or any misdemeanor involving moral turpitude, or (iii) violation of GP LLC'sLLC’s Code of Business Conduct (unless waived in accordance with the terms thereof), in the case of clauses (i) and (iii) with the specific failure or violation described in writing.(6)Pursuant to their
(4)
Mr. Pefanis’ employment agreements withagreement provides that if (i) his employment is terminated as a result of his death, (ii) he terminates his employment (a) because of a disability (as defined in Section 409A of the Code) or (b) for good reason (as defined below), or (iii) GP LLC if Messrs. Armstrong or Pefanis are terminated other than (i) forterminates his employment without cause (as defined in footnote 1 above)below), (ii) by reason of death or (iii) by resignation (unless such resignationhe is dueentitled to a disabilitylump-sum amount equal to the product of (1) the sum of his (a) highest annual base salary paid prior to his date of termination and (b) highest annual bonus paid or payable for good reason (each as defined in footnote 1 above)), then they are entitledany of the three years prior to continue to participate, for a period which is the lesser of
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two years from the date of termination, and (2) the lesser of (i) two or (ii) the number of days remaining in the term of thehis employment agreement in such health and accident plans or arrangements as are made availabledivided by GP LLC to its executive officers generally.360. The amountsamount provided in the table assumeassumes a termination date of December 31, 2017.
(7)Pursuant2023 with two years remaining on the term of his agreement, and also assumes a highest annual base salary of $600,000 and highest annual bonus of $2,105,000.
Mr. Pefanis’ employment agreement defines “cause” as (i) willfully engaging in gross misconduct, or (ii) conviction of a felony involving moral turpitude. Notwithstanding, no act, or failure to their employment agreements, Messrs. Armstrongact, on his
part is “willful” unless done, or omitted to be done, not in good faith and without reasonable belief that such act or omission was in the best interest of GP LLC or otherwise likely to result in no material injury to GP LLC. However, Mr. Pefanis will not be reimburseddeemed to have been terminated for any excise tax due under Section 4999cause unless and until there is delivered to him a copy of a resolution of the CodeBoard at a meeting held for that purpose (after reasonable notice and an opportunity to be heard), finding that Mr. Pefanis was guilty of the conduct described above, and specifying the basis for that finding. If Mr. Pefanis were terminated for cause, GP LLC would be obligated to pay base salary through the date of termination, with no other payment obligations triggered by the termination under the employment agreement or other employment arrangement.
Mr. Pefanis’ employment agreement defines “good reason” as a resultthe occurrence of compensation (parachute) payments made under their respectiveany of the following circumstances: (i) removal by GP LLC from, or failure to re-elect him to, the position to which Mr. Pefanis was appointed pursuant to his employment agreements. The hypothetical termination of Messrs. Armstrong and Pefanisagreement, except in connection with his termination for cause (as defined above); (ii) (a) a changereduction in control effective ashis rate of December 31, 2017 would not have resultedbase salary (other than in connection with across-the-board salary reductions for all executive officers of GP LLC) to an amount which is less than 85% of his current base salary, (b) a material reduction in his fringe benefits, or (c) any excess parachute paymentsother material failure by GP LLC to comply with its obligations under the employment agreement to pay his annual salary and bonus, reimburse his business expenses, provide for his participation in certain employee benefit plans and arrangements, furnish him with suitable office space and support staff, or excise tax reimbursements.
(8)allow him no less than 15 business days of paid vacation annually; or (ii) the failure of GP LLC to obtain the express assumption of the employment agreement by a successor entity (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of GP LLC.
(5)
Pursuant to the AAP Management Unit grant agreements of Messrs. Chiang and Nerbonne, AAP retained a call right to purchase any earned AAP Management Units at a discount to fair market value equal to 25%, 50%, or 75% of fair market value depending on the date of exercise of the call right (which value is referred to in the AAP Management Unit grant agreements as the "Call Value" as defined below) of such AAP Management Units, which call right is exercisable upon the termination of such Named Executive Officer'shis employment agreement, if Mr. Pefanis terminates his employment with GP LLC and its affiliates prior to January 1, 2023; provided, however, that such call right is not applicable (i) in the case of the termination of such Named Executive Officer's employment without cause (defined below), (ii) in the event of a resignation by such Named Executive Officer with good reason (defined below), and (iii) in Mr. Chiang's case, in the event of his death or disability. Additionally, Mr. Chiang's employment agreement provides that his AAP Management Units will vest in full if he has not received the Executive Promotion and is terminated by GP LLC other than for cause (as defined below) or he terminates his employment for good reason prior to December 31, 2018 (see "—Employment Contracts" for additional information regarding Mr. Chiang's employment agreement). If Messrs. Chiang and Nerbonne are terminated without cause or terminate their employment for good reason, or if such Named Executive Officer remains employed past January 1, 2023, any earned AAP Management Units are no longer subject to the call right and are deemed to have "vested." As of December 31, 2017, none of the AAP Management Units held by Mr. Chiang or Mr. Nerbonne had been earned. Assuming a termination of employment without cause or for good reason on December 31, 2017 and assuming that Mr. Chiang had not received the Executive Promotion prior to that date, all of the AAP Management Units held by Mr. Chiang and none of the AAP Management Units held by Mr. Nerbonne would become vested and would no longer be subject to the call right. The value reflected in the table above for Mr. Chiang represents the implied value of such "benefit", calculated as of December 31, 2017 by (i) assuming that Mr. Chiang's AAP Management Units are converted into AAP units based on the conversion factor of approximately 0.941 AAP units and PAGP Class B shares for each AAP Management Unit, (ii) assuming the exchange of the resulting AAP units and PAGP Class B shares for PAGP Class A shares on a one-for-one basis, and (iii) multiplying such resulting number of PAGP Class A shares by an amount equal to 100% of the closing market price ($21.95) of PAGP's Class A shares at December 29, 2017 (the last trading day of the fiscal year).
"Cause" is defined in the AAP Management Unit grant agreement of Mr. Nerbonne as (i) a reasonable determination made in good faith by the CEO that the executive has substantially failed to perform the duties and responsibilities of his position at an acceptable level and after written notice specifying such failure in reasonable detail, (ii) the executive's conviction of or guilty plea to the committing of an act or acts constituting a felony under the laws of the United States or any state thereof or any misdemeanor involving moral turpitude, or (iii) executive's violation of PAA's Code of Business Conduct (unless waived), provided that executive is provided written notice of such violation. For Mr. Chiang, "Cause" is defined as (i) substantial failure to perform the duties and responsibilities of his position at an acceptable level as reasonably determined in good faith by the CEO and President-COO of GP LLC (or if Mr. Chiang is the CEO, by vote of the Board) and after written notice specifying such failure in detail and after a reasonable period under the circumstances (determined by the CEO, or alternatively the Board, in good faith) such failure has continued without full correction by the executive, (ii) the executive's conviction of or guilty plea to the committing of an act or acts constituting a felony under the laws of the United States or any state thereof or any misdemeanor involving moral turpitude, or (iii) violation of GP LLC's Code of Business Conduct (unless waived in accordance with the terms thereof), in each case with the specific failure or violation described in writing.
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"Good Reason" is defined in the AAP Management Unit grant agreements as (i) any material breach by AAP of executive's AAP Management Unit grant agreement, (ii) the failure of any successor of AAP to assume executive's AAP Management Unit grant agreement, or (iii) any material overall reduction the executive's authority, responsibilities or duties.
"Call Value" is defined in the AAP Management Unit grant agreements as the product of the applicable conversion factor and the closing sales price of the PAGP Class A shares on the applicable date.
(9)Pursuant to the AAP Management Unit grant agreements, upon the occurrencewithin three months of a Change in Control any earned AAP Management Units (and any AAP Management Units that will become earned(as defined below), he is entitled to a lump-sum payment in less than 180 days) become vested units and, to the extent any AAP Management Units remain unearned, an incremental 25% of the number of AAP Management Units originally granted pursuant to the applicable grant becomes vested. Mr. Chiang's employment agreement also provides that his AAP Management Units will vest in full if he terminates his employment within 90 days after a change of control prior to December 31, 2018 and in connection therewith he does not receive the Executive Promotion (see "—Employment Contracts" for additional information regarding Mr. Chiang's employment agreement). As of December 31, 2017, none of the AAP Management Units held by Mr. Chiang or Mr. Nerbonne had been earned. Accordingly, assuming that a Change in Control occurred on December 31, 2017 (or in the case of Mr. Chiang, 90 days prior to December 31, 2017) and that in connection with such Change in Control, Mr. Chiang had not received the Executive Promotion, all of the AAP Management Units held by Mr. Chiang and 25% held by Mr. Nerbonne would become vested and would no longer be subject to the call right. Because the call right provides for a discounted purchase price relative to fair market value as described above, the applicable Named Executive Officer would "benefit" from a Change in Control by virtue of the fact that such officer's AAP Management Units could no longer be purchased by AAP at such discount. The value reflected in the table above for Messrs. Chiang and Nerbonne represents the implied value of such "benefit", calculated as of December 31, 2017 by (i) assuming that such executive's vested AAP Management Units are converted into AAP units based on the conversion factor of approximately 0.941 AAP units and PAGP Class B shares for each AAP Management Unit, (ii) assuming the exchange of the resulting AAP units and PAGP Class B shares for PAGP Class A shares on a one-for-one basis, and (iii) multiplying such resulting number of PAGP Class A shares by an amount equal to the applicable percentage (100%product of (i) three and (ii) the sum of (a) his highest annual base salary previously paid to him and (b) his highest annual bonus paid or payable for Mr. Chiang and 25% for Mr. Nerbonne) (taking any applicable discount into account) of the closing market price ($21.95)three years prior to the date of PAGP's Class A shares at December 29, 2017 (the last trading day ofsuch termination. The amount provided in the fiscal year).
"table assumes a Change in Control" meansControl and termination date of December 31, 2023, and also assumes a highest annual base salary of $600,000 and highest annual bonus of $2,105,000.
In conjunction with events occurring in 2005, 2010 and 2013, Mr. Pefanis executed various agreements waiving his right to terminate his employment and receive separation benefits under his employment agreement. In connection with such waivers, the determination by the Board thatdefinition of “Change in Control” in Mr. Pefanis’ employment agreement was modified to mean, and will be deemed to occur upon, one or more of the following events has occurred:events: (i) any person (other than PAGP or its wholly owned subsidiaries), including any partnership, limited partnership, syndicate or other group deemed a “person” for purposes of Section 13(d) or 14(d) of the Persons who own member interestsExchange Act becomes the beneficial owner, directly or indirectly, of 50% or more of the membership interest in GP LLC or 50% or more of the outstanding limited partnership interest of PAGP; (ii) any person (other than PAGP or its wholly owned subsidiaries), including any partnership, limited partnership, syndicate or other group deemed a “person” for purposes of Section 13(d) or 14(d) of the Exchange Act, becomes the beneficial owner, directly or indirectly, of 50% or more of the membership interest in PAGP GP immediately following the closing of PAGP's initial public offering, includingGP; (iii) PAGP and the respective Affiliates of such Persons (such owners and Affiliates being referredceases to as the "Owner Affiliates"), cease tobeneficially own, directly or indirectly, at leastmore than 50% of the membership interests of such entity; (ii) (x) a "person" or "group" other thaninterest in GP LLC; (iv) the Owner Affiliates becomes“Owner Affiliates”, as defined in the "beneficial owner"2013 waiver agreement, cease to beneficially own, directly or indirectly, of 25% or more than 50% of the membermembership interest in the general partner of PAGPand (y) the member interest beneficially owned by such "person" GP; or "group" exceeds the aggregate member interest in the general partner of PAGP beneficially owned, directly or indirectly, by the Owner Affiliates; or (iii)(v) there has been a direct or indirect transfer, sale, exchange or other disposition in a single transaction or series of transactiontransactions (whether by merger or otherwise) of all or substantially all of the assets of PAGP or PAA to one or more Personspersons who are not Affiliatesaffiliates of PAGP ("(“third partyparty” or parties"“parties”), other than a transaction in which the Owner Affiliates continue to beneficially own, directly or indirectly, more than 50% of the issued and outstanding voting securities of such third party or parties immediately following such transaction.(10)
(6)
Pursuant to his employment agreement, if Mr. Pefanis is terminated other than (i) for cause (as defined in footnote 4 above), (ii) by reason of death or (iii) by resignation (unless such resignation is due to a disability or for good reason (each as defined in footnote 4 above)), then he is entitled to continue to participate, for a period which is the lesser of two years from the date of termination or the remaining term of the employment agreement, in such health and accident plans or
arrangements as are made available by GP LLC to its executive officers generally. The amounts provided in the table assume a termination date of December 31, 2023 with two years remaining on the term of his agreement.
(7)
If Messrs. Chiang, Pefanis, Swanson, NerbonneMcGee, Chandler or vonBergGoebel were terminated for cause, GP LLC would be obligated to pay base salary through the date of termination, with no other payment obligation triggered by the termination under any employment arrangement.
(11)Mr. Chiang's employment agreement provides that in the event of his death or disability prior to December 31, 2018, if less than 187,760 of his AAP Management Units have been earned, he shall vest in such number of additional AAP Management Units as may be necessary to cause the total number of
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vested AAP Management Units to equal 187,760. Mr. Chiang's AAP Management Unit grant agreement also provides that in the event of his death or disability, AAP will not have a call right and all of his earned AAP Management Units will vest. As of December 31, 2017, none of Mr. Chiang's AAP Management Units had been earned. The dollar value given assumes Mr. Chiang's death or disability on December 31, 2017 and represents the implied value of such "benefit," calculated as of December 31, 2017 by (i) assuming that Mr. Chiang's vested AAP Management Units are converted into AAP units based on the conversion factor of approximately 0.941 AAP units and PAGP Class B shares for each AAP Management Unit, (ii) assuming the exchange of the resulting AAP units and PAGP Class B shares for PAGP Class A shares on a one-for-one basis, and (iii) multiplying such resulting number of PAGP Class A shares by the closing market price ($21.95) of PAGP's Class A shares at December 29, 2017 (the last trading day of the fiscal year).
Confidentiality, Non-Compete and Non-Solicitation Arrangements
Pursuant to his employment agreement,
Mr. ArmstrongChiang has agreed to maintain the confidentiality of PAAcertain information for a period of five years after the termination of his employment. Mr. Pefanis has agreed to a similar restriction for a period of one year following the termination of his employment. Mr. Chiang has agreed to maintain confidentiality and not to solicit customers, assets and employees for two years following termination of his employment. Mr. NerbonnePefanis has agreed to maintain the confidentiality of PAA information for a period of one year following the termination of his employment. Messrs. McGee and Chandler have each agreed to maintain the confidentiality of certain information and not to solicit customers for a period of two years after termination of histheir employment. Mr. vonBerg has agreed to maintain confidentiality and not to solicit customers for a period of one year following termination of his employment.
As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 402(u) of Regulation S-K, we are providing the following information about the relationship of the annual total compensation of our employees and the annual total compensation of Greg L. Armstrong,Willie Chiang, our CEO: •
The annual total compensation for our CEOMr. Chiang for 20172023 was approximately $42,500.
$7,453,919.
•
The annual total compensation for the median employee for 20172023 was approximately $96,900.
$125,389.
•
The ratio of our CEO'sMr. Chiang’s pay to the pay of our median employee for 20172023 was approximately 0.4459.45 to 1. The
PAA’s median annual total compensationemployee was determinedidentified as follows:- of December 31, 2023 using the following methodology:
•
A list was prepared of all individuals, excluding the CEO, who were employed by usPAA on December 31, 2017.2023. We included all U.S. and Canadian employees.
•
Basic wage data for each U.S. employee was extracted from Form W-2 information provided to the Internal Revenue Service for calendar year 2017.2023. Basic wage data for each Canadian employee was extracted from Form T4 information provided to the Canada Revenue Agency for calendar year 20172023 and converted to U.S. dollars. This information was then sorted and the median employee was identified.
•Once the
The median employee was identified, his or heremployee’s annual total compensation for 20172023 was determined using the same methodology we used for determining the annual total compensation for ourthe Named Executive Officers as set forth in the 20172023 Summary Compensation Table.
Pay Versus Performance
As required by Item 402(v) of Regulation S-K, we are providing the following information about the relationship between executive compensation actually paid (“CAP”) and PAA’s financial performance for the periods presented. The CAP dollar amounts shown in the table below have been calculated in accordance with SEC rules; however, meaningful amounts included as CAP (e.g., approximately one-third of CAP for our PEO in 2023) do not represent compensation actually paid or earned during the applicable years. This is due to the fact that CAP includes the value of outstanding equity awards that could potentially vest in future years (“potentially realizable future value”) in addition to base salary, bonus, the value of equity awards that vested during the year and DERs (“realized value”). With respect to our principal executive officer (“PEO”) for 2023, ~71% of the ~$16.4 million of CAP (or ~$11.7 million) represents the “realized value” of amounts actually paid to or earned by our PEO and ~29% (or ~$4.7 million) represents “future potentially realizable value” of outstanding equity awards. With respect to our other NEOs (“Non-PEO NEOs”) for 2023, ~71% of the ~$6.5 million of average CAP (or ~$4.6 million) represents the “realized value” of amounts actually paid to or earned by our Non-PEO NEOs and ~29% (or ~$1.9 million) represents “future potentially realizable value” of outstanding equity awards.
Tabular Disclosure of Compensation Actually Paid versus Performance
The following table discloses information on CAP to our PEO and, on average, to our Non-PEO NEOs during the specified years alongside TSR, net income, and the Company-selected measure of Adjusted EBITDA Attributable to PAA. Adjusted EBITDA Attributable to PAA was identified by the Company as the most important financial performance measure used to link CAP to Company performance.
| | | Year | | | | Summary
Compensation
Table Total
for PEO(1) | | | | Compensation
Actually
Paid to PEO(2) | | | | Average
Summary
Compensation
Table
Total for
Non-PEO
NEOs(1) | | | | Average
Compensation
Actually
Paid to Non-
PEO NEOs(2) | | | | Value of Initial Fixed
$100 Investment
Based On: | | | | Net Income/
(Loss) | | | | Adjusted
EBITDA
Attributable
to PAA | | |
| | Company
TSR(3) | | | | Peer
Group
TSR(3) | | |
| | | 2023 | | | | | $ | 7,453,919 | | | | | | $ | 16,427,772 | | | | | | $ | 2,949,247 | | | | | | $ | 6,454,569 | | | | | | $ | 113.53 | | | | | | $ | 147.00 | | | | | $1.50 billion | | | | $2.71 billion | | |
| | | 2022 | | | | | $ | 8,296,140 | | | | | | $ | 14,459,710 | | | | | | $ | 4,387,570 | | | | | | $ | 8,142,198 | | | | | | $ | 81.51 | | | | | | $ | 128.92 | | | | | $1.23 billion | | | | $2.51 billion | | |
| | | 2021 | | | | | $ | 4,392,210 | | | | | | $ | 4,792,883 | | | | | | $ | 2,147,374 | | | | | | $ | 2,385,698 | | | | | | $ | 60.08 | | | | | | $ | 106.08 | | | | | $648 million | | | | $2.20 billion | | |
| | | 2020 | | | | | $ | 4,290,241 | | | | | | $ | 2,401,749 | | | | | | $ | 1,957,177 | | | | | | $ | 429,822 | | | | | | $ | 49.18 | | | | | | $ | 76.64 | | | | | $(2.58 billion) | | | | $2.55 billion | | |
(1)
For each of the years presented, our PEO is Willie Chiang and our Non-PEO NEOs are Harry Pefanis, Al Swanson, Richard McGee, Chris Chandler and Jeremy Goebel.
(2)
The dollar amounts shown in these columns reflect CAP as calculated in accordance with SEC rules. As required, the dollar amounts include (among other items) values for unvested equity compensation that may or may not be realized in future periods, and as such, the dollar amounts shown do not necessarily represent the actual amount of compensation earned or paid during the applicable years.
(3)
TSR figures assume an initial investment of $100 in PAA on December 31, 2019. The peer group referenced for purposes of the TSR comparison is the group of companies included in the Alerian Midstream Energy Index, which is the same index used for purposes of Item 201(e) of Regulation S-K.
The adjustments made to the Summary Compensation Table (“SCT”) amounts to determine CAP are shown in the tables below:
PEO — Reconciliation of ContentsSCT Total to CAP Total(a)
| | | Year | | | | SCT Total | | | | | | | | | | | Grant Date Fair
Value of Awards
Granted During
the Year | | | | | | | | | | | Fair Value of Equity
Calculated Using
SEC Methodology | | | | | | | | | | | CAP Total | | |
| | | 2023 | | | | | $ | 7,453,919 | | | | | | | — | | | | | | $ | 3,658,279 | | | | | | | + | | | | | | $ | 12,632,132 | | | | | | | = | | | | | | $ | 16,427,772 | | | |
(a)
As shown in the table, the CAP total represents the SCT total for the covered fiscal year, but adjusted as required by SEC rules to replace the grant date fair value of awards granted during the covered fiscal year with the fair value of current and prior year equity awards that were outstanding at the end of the current fiscal year or that vested or were forfeited during the covered fiscal year. Our NEOs do not participate in a defined benefit plan; therefore, no adjustment for pension benefits is included.
The calculation of the fair value of equity for the PEO for the covered fiscal year is shown in the following table:
PEO — CAP Fair Value of Equity Calculation(a)
| | | Year | | | | YE Fair
Value of
Current Year
Awards
Outstanding
at YE | | | | | | | | | | | Change in Fair
Value as of YE
for Prior Year
Awards
Outstanding at
YE | | | | | | | | | | | Change in Fair
Value as of
Vesting Date
for Prior Year
Awards that
Vested During
the Year | | | | | | | | | | | Fair Value
of DERs
Paid During
the Year | | | | | | | | | | | Fair Value of
Equity for
CAP
Purposes | | |
| | | 2023 | | | | | $ | 3,510,732 | | | | | | | + | | | | | | $ | 6,016,326 | | | | | | | + | | | | | | $ | 1,718,016 | | | | | | | + | | | | | | $ | 1,387,058 | | | | | | | = | | | | | | $ | 12,632,132 | | | |
(a)
We did not issue any equity awards during the covered fiscal year that vested in the year of grant. Additionally, no equity awards granted in any prior fiscal year failed to meet applicable vesting conditions or were forfeited during the covered fiscal year.
Non-PEO NEOs (Average) — Reconciliation of SCT Total to CAP Total(a)
| | | Year | | | | SCT Total | | | | | | | | | | | Grant Date Fair
Value of Awards
Granted During
the Year | | | | | | | | | | | Fair Value of Equity
Calculated Using
SEC Methodology | | | | | | | | | | | CAP Total | | |
| | | 2023 | | | | | $ | 2,949,247 | | | | | | | — | | | | | | $ | 1,055,607 | | | | | | | + | | | | | | $ | 4,560,929 | | | | | | | = | | | | | | $ | 6,454,569 | | | |
(a)
The CAP total figures were calculated using the same methodology described in footnote (a) to the “PEO — Reconciliation of SCT Total to CAP Total” table shown above.
The calculation of the fair value of equity for the Non-PEO NEOs for the covered fiscal year is shown in the following table:
Non-PEO NEOs (Average) — CAP Fair Value of Equity Calculation(a)
| | | Year | | | | YE Fair
Value of
Current Year
Awards
Outstanding
at YE | | | | | | | | | | | Change in Fair
Value as of YE
for Prior Year
Awards
Outstanding at
YE | | | | | | | | | | | Change in Fair
Value as of
Vesting Date
for Prior Year
Awards that
Vested During
the Year | | | | | | | | | | | Fair Value
of DERs
Paid During
the Year | | | | | | | | | | | Fair Value of
Equity for
CAP
Purposes | | |
| | | 2023 | | | | | $ | 1,013,032 | | | | | | | + | | | | | | $ | 2,491,868 | | | | | | | + | | | | | | $ | 549,783 | | | | | | | + | | | | | | $ | 506,246 | | | | | | | = | | | | | | $ | 4,560,929 | | | |
(a)
We did not issue any equity awards during the covered fiscal year that vested in the year of grant. Additionally, no equity awards granted in any prior fiscal year failed to meet applicable vesting conditions or were forfeited during the covered fiscal year.
Tabular Disclosure of Most Important Measures Linking Compensation Actually Paid During 2023 to Company Performance
The following were the most important financial and non-financial performance measures, as determined by the Company, that link 2023 CAP to the Company’s performance for the most recently completed fiscal year (unranked):
| | | Most Important Performance Measures | | |
| | | Adjusted EBITDA Attributable to PAA | | |
| | | DCF per CUE | | |
| | | TSR | | |
| | | TRIR | | |
| | | FRR | | |
For further information regarding these performance measures and their function in our executive compensation program, please see “Compensation Discussion and Analysis” beginning on page 26.
Disclosure of the Relationship Between Compensation Actually Paid and Financial Performance Measures
The graphs below describe the relationship between CAP (as calculated above) and our financial and stock performance for the indicated years. In addition, the first table below compares our cumulative TSR to peer group TSR for the indicated years.
Compensation of Directors
The following table sets forth a summary of the compensation paid to each person who served as a non-employee director of PAGP GP in 2017:2023 (other than Messrs. Chiang and Pefanis who were not compensated as directors and whose compensation is set forth in the Summary Compensation Table above):
| | | Name | | | | Fees
Earned or
Paid in
Cash
($) | | | | Stock
Awards
($)(1) | | | | All Other
Compensation
($) | | | | Total
($) | | |
| | | Greg L. Armstrong(2) | | | | | | 250,000 | | | | | | | — | | | | | | | 15,840 | | | | | | | 265,840 | | | |
| | | Victor Burk | | | | | | 145,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 270,500 | | | |
| | | Ellen R. DeSanctis | | | | | | 130,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 255,500 | | | |
| | | Kevin S. McCarthy | | | | | | 115,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 240,500 | | | |
| | | Gary R. Petersen | | | | | | 115,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 240,500 | | | |
| | | Alexandra D. Pruner | | | | | | 130,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 255,500 | | | |
| | | John T. Raymond | | | | | | 130,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 255,500 | | | |
| | | Bobby S. Shackouls | | | | | | 165,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 290,500 | | | |
| | | Christopher M. Temple | | | | | | 115,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 240,500 | | | |
| | | Lawrence M. Ziemba | | | | | | 145,000 | | | | | | | 125,500 | | | | | | | — | | | | | | | 270,500 | | | |
| | | | | | | | | | |
Name | | Fees
Earned
or Paid in
Cash ($) | | Stock
Awards ($)(1) | | Total ($) | |
|---|
Victor Burk | | | 60,000 | | | 51,225 | | | 111,225 | |
Oscar K. Brown(2) | | | 11,250 | | | n/a | | | 11,250 | |
Ben Figlock(2) | | | 33,750 | | | n/a | | | 33,750 | |
Everardo Goyanes | | | 75,000 | | | 105,000 | | | 180,000 | |
Gary R. Petersen | | | 45,000 | | | 76,838 | | | 121,838 | |
John T. Raymond | | | 45,000 | | | 52,500 | | | 97,500 | |
Bobby S. Shackouls | | | 47,000 | | | 38,419 | | | 85,419 | |
Robert V. Sinnott | | | 47,000 | | | 51,225 | | | 98,225 | |
J. Taft Symonds | | | 60,000 | | | 102,450 | | | 162,450 | |
Christopher M. Temple | | | 45,000 | | | 78,750 | | | 123,750 | |
(1)
(1)- The dollar value of
LTIPslong-term incentive awards granted during 20172023 is based on the grant date fair value computed in accordance with FASB ASC Topic 718. See Note 1617 to our Consolidated Financial Statements included in our 20172023 Annual Report for additional discussion regarding the calculation of grant date fair values. In connection with the August 2017 vesting2023, each of director LTIP awards, Mr. Symonds was granted 5,000 PAA phantom units, Mr. Petersen was granted 3,750 PAA phantom units, Messrs. Burk, McCarthy, Petersen, Raymond, Shackouls, Temple and Sinnott each were granted 2,500 PAA phantom units, Mr. Shackouls was granted 1,875 PAA phantom units, Mr. Goyanes was granted 5,000Ziemba, Ms. DeSanctis and Ms. Pruner received an annual long-term incentive award for 8,050 PAGP phantom Class A shares, Mr. Temple wasshares. See “— Long-Term Equity Awards” below for further information regarding long-term incentive awards granted 3,750 PAGP phantom Class A shares and Mr. Raymond was granted 2,500 PAGP phantom Class A sharesto our non-employee directors. The aggregate number of outstanding long-term incentive awards held by virtue of the automatic re-grant feature of the vested awards. Upon vesting of the PAA director LTIP awards in August 2017, a cash payment of $72,875 was made to Oxyour non-employee directors as directed by Mr. Brown. Such cash payment was based on the unit value of Mr. Sinnott's award on the previous year's vesting date. As of December 31, 2017,2023 were as follows:
| | | | | | | Number of LTIP Awards Held
as of December 31, 2023 | | |
| | | Director Name: | | | | PAGP
Phantom
Class A
Shares (#) | | | | Vesting
Date | | |
| | | Burk | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | DeSanctis | | | | | | 8,050 | | | | | August 2024 | | |
| | | Total | | | | | | 8,050 | | | | | | | |
| | | McCarthy | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 10,622 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 30,572 | | | | | | | |
| | | Petersen | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | Pruner | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | Raymond | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | Shackouls | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | Temple | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
| | | Ziemba | | | | | | 8,050 | | | | | August 2024 | | |
| | | | | | | | | 15,290 | | | | | August 2024 | | |
| | | | | | | | | 11,900 | | | | | August 2025 | | |
| | | Total | | | | | | 35,240 | | | | | | | |
(2)
Mr. Armstrong served as Senior Advisor to the numberCEO during 2023 and received a salary of outstanding PAA LTIPs held by our directors was$250,000 and other compensation of $15,840 (comprising 401(k) plan matching contributions and premium payments for group term life insurance) for his services as follows: Burk—20,000; Petersen—15,000; Shackouls—15,000; Sinnott—10,000 and Symonds—20,000. As of December 31, 2017, the number of outstanding PAGP LTIPs held by our directors was as follows: Goyanes—20,000; Raymond—10,000 and Temple—15,000.
(2)In August 2017, Mr. Brown replaced Mr. Figlock as Oxy's designated director. Compensation for each of Mr. Brown and Mr. Figlock was assigned to Oxy. Each director who is not an employee and as a director. Pursuant to his employment agreement, Mr. Armstrong will continue to serve as a director and will also serve as Senior Advisor to the CEO until the date of GP LLC isthe 2024 annual meeting and he will receive an annual salary of $250,000 for these services. Mr. Armstrong does not hold any LTIP awards.
Cash Retainers and Expense Reimbursement
During 2023, our non-employee directors received an annual retainer fee of $115,000. In addition to their annual retainer, each committee chairman (other than the Audit Committee chairman) received an additional retainer of $15,000, the Audit Committee chairman received an additional retainer of $30,000, each other member of the Audit Committee received an additional retainer of $15,000, and the Lead Director received an additional retainer of $35,000.
Non-employee directors are reimbursed for anyreasonable travel, lodging and other out-of-pocket expenses related to meeting attendance or otherwise related to service on the Board (including, without limitation, reimbursement for continuing education expenses). Each non-employee director is currently paid an annual retainer fee of $45,000; however, the annual retainer fee for the director designated by Oxy is paid to Oxy. Messrs. Armstrong, Chiang and Pefanis are otherwise compensated for their services as employees and therefore receive no separate compensation for services as directors. In addition to the annual retainer, each committee chairman (other than the audit committee chairman) receives $2,000 annually. The chairman of the audit committee receives $30,000 annually, and the other members of the audit committee receive $15,000 annually, in each case, in addition to the annual retainer. Long-Term Equity Awards
Our non-employee directors receive
annual LTIP
awards or cash equivalent awards as part of their compensation. In
February 2017, the Board approved a modified equity compensation structure for non-employee directors and a plan for transitioning to the new structure. Specifically, the Board approved making new grants, cancelling existing grants or amending and restating the director's existing
Table2023, such LTIP awards consisted of Contents
grants as necessary to effect the following (with the grants described below being denominated in either PAA phantom units or PAGP phantom Class A shares basedhaving a market value on the date of grant equal to approximately $125,000 (based on a one-time election made by each director): (i)volume weighted average price for each designated director other than the Oxy designee (i.e., Messrs. Raymond10-trading day period beginning five days before and Sinnott),ending five days after the ex-dividend date immediately preceding the date of grant). The annual LTIP awards granted in 2023 will vest (become payable in PAGP Class A shares on a phantom unit grant of 10,000 units vesting 25%one-for-one basis) on the August 2024 distribution date of each year, with an automatic re-grant of an additional 25% immediately upon each such vesting, together withand include associated DERs, (ii) for each independentDERs. Outstanding director who is not serving onLTIP awards granted prior to 2022 will vest four years after the audit committee (Messrs. Petersen, Shackouls and Temple), a phantom unit grant of 15,000 units vesting 25% on the August distribution date of each year, with an automatic re-grant of an additional 25% immediately upon each such vesting, together with associated DERs, (iii) for each independent director who is serving on the audit committee (Messrs. Burk, Goyanes and Symonds), two phantom unit grants of 10,000 units each (one for service as an independent director and a supplemental grant for service on the audit committee, for a total of 20,000 units) vesting 25% on the August distribution date of each year, with an automatic re-grant of an additional 25% immediately upon each such vesting, together with associated DERs, and (iv) for the director designated by Oxy, concurrent with the annual August vesting of the awards made to the other designated directors, a cash payment will be made to Oxy based on the unit value of Mr. Sinnott's award on the previous year's vesting date.
grant.
All director LTIP awards vest in full upon the next following distribution date after the death or disability (as determined in good faith by the Board) of the director. For supplemental audit committee grants, theThe awards also vest in full if sucha director (i) retires (no longer with full-time employment and no longer serving as an officer or director of any public company) or (ii) is removed from the Board or the audit committee or is not reelectedre-elected to the Board, or the audit committee, unless such removal or failure to reelect is for "good cause,"“Cause,” as defined in the letter granting the LTIP awards.PAGP GP LLC Agreement.
Reimbursement of Expenses of Our General Partner and its Affiliates
We do not pay our general partner a management fee, but we do reimburse our general partner for all direct and indirect costs of services provided to us or incurred on our behalf, including the costs of employee, officer and director compensation and benefits allocable to us, as well as all other expenses necessary or appropriate to the conduct of our business, allocable to us.business. We record these costs on the accrual basis in the period in which our general partner incurs them. Our partnership agreement provides that our general partner will determine the expenses that are allocable to us in any reasonable manner determined by our general partner in its sole discretion.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Plains All American Pipeline, L.P.
Our common units and Series A preferred units outstanding (collectively, our "Common“Common Unit Equivalents"Equivalents”) represent 100% of our voting securities. Ownership of the non-economic general partner interest is discussed separately below under "—“— Beneficial Ownership of General Partner Interest."” The following table sets forth certain information regarding the beneficial ownership of our common units and Series A preferred units as of March 20, 201825, 2024 (unless otherwise noted) by each person who is known to us to beneficially own more than 5% of our common units, each person who is known to us to beneficially own more than 5% of our Series A preferred units, the Named Executive Officers, our directors, and all directors and executive officers as a group. HoldersAs reflected below, Plains AAP is the record owner of over 30% of our common units (other than Plains AAP, L.P.) and our Series A preferred units areunits; however, it is not entitled to vote on all matters presentedsuch units for the election of directors at the PAAour Annual Meeting. See pages 9-11 for additional information regarding our ownership and voting structure.
| | | Name of Beneficial Owner
and Address (in the case of
Owners of more than 5%) | | | | Common
Units | | | | Percentage
of Common
Units | | | | Series A
Preferred
Units(1) | | | | Percentage
of Series A
Preferred
Units | | | | Percentage
of
Common
Unit
Equivalents** | | |
| | | Plains AAP, L.P.(2) | | | | | | 232,653,928 | | | | | | | 33.2% | | | | | | | — | | | | | | | — | | | | | | | 30.1% | | | |
| | | ALPS Advisors, Inc.(3) | | | | | | 60,732,044 | | | | | | | 8.7% | | | | | | | — | | | | | | | — | | | | | | | 7.9% | | | |
| | | EnCap Partners LLC(4) | | | | | | — | | | | | | | — | | | | | | | 25,357,120 | | | | | | | 35.7% | | | | | | | 3.3% | | | |
| | | EMG Fund IV PAA
Holdings, LLC(5) | | | | | | — | | | | | | | — | | | | | | | 20,376,259 | | | | | | | 28.7% | | | | | | | 2.6% | | | |
| | | FR XIII PAA Holdings
Holdco LLC(6) | | | | | | — | | | | | | | — | | | | | | | 6,643,139 | | | | | | | 9.3% | | | | | | | * | | | |
| | | Stonepeak Partners LLC(7) | | | | | | — | | | | | | | — | | | | | | | 6,339,278 | | | | | | | 8.9% | | | | | | | * | | | |
| | | Atlas Point Energy
Infrastructure Fund
LLC(8) | | | | | | — | | | | | | | — | | | | | | | 4,380,953 | | | | | | | 6.2% | | | | | | | * | | | |
| | | Willie Chiang(11) | | | | | | 592,641(9) | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Harry N. Pefanis(11) | | | | | | 420,194 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Al Swanson(11) | | | | | | 393,200(9) | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Richard McGee(11) | | | | | | 397,652(9) | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Chris Chandler(11) | | | | | | 254,191(9) | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Jeremy Goebel(11) | | | | | | 279,223(9) | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Greg L. Armstrong(11) | | | | | | 1,508,418 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Victor Burk(11) | | | | | | 37,043 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Ellen DeSanctis(11) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | Kevin S. McCarthy(11) | | | | | | 200,000 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Gary R. Petersen(4)(11) | | | | | | 68,200 | | | | | | | * | | | | | | | 25,357,120 | | | | | | | 35.7% | | | | | | | 3.3% | | | |
| | | Alexandra D. Pruner(11) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | John T. Raymond(5)(11) | | | | | | 1,602,616 | | | | | | | * | | | | | | | 20,376,259 | | | | | | | 28.7% | | | | | | | 2.8% | | | |
| | | Bobby S. Shackouls(11) | | | | | | 35,033 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | Christopher M. Temple(11) | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | Lawrence M. Ziemba(11) | | | | | | 2,346 | | | | | | | * | | | | | | | — | | | | | | | — | | | | | | | * | | | |
| | | All directors and executive
officers as a group
(17 persons)(11) | | | | | | 5,928,413(9)(10) | | | | | | | * | | | | | | | 45,733,379(10) | | | | | | | 64.3% | | | | | | | 6.7% | | | |
| | | | | | | | | | | | | | | | |
Name of Beneficial Owner and Address (in
the case of Owners of more than 5%) | | Common
Units | | Percentage
of Common Units | | Series A
Preferred
Units(1) | | Percentage
of Series A
Preferred
Units | | Percentage
of Common
Unit
Equivalents** | |
|---|
EnCap Partners LLC(2) | | | — | | | — | | | 25,357,120 | | | 35.7 | % | | 3.2 | % |
EMG Fund IV PAA Holdings, LLC(3) | | | — | | | — | | | 20,376,259 | | | 28.7 | % | | 2.6 | % |
FR XIII PAA Holdings Holdco LLC(4) | | | — | | | — | | | 12,678,560 | | | 17.8 | % | | 1.6 | % |
Stonepeak Partners LLC(5) | | | — | | | — | | | 6,339,278 | | | 8.9 | % | | * | |
Plains AAP, L.P.(6) | | | 283,960,248 | | | 39.2 | % | | — | | | — | | | 35.7 | % |
Richard A. Kayne/Kayne Anderson Capital Advisors, L.P.(7) | | | 14,384,925 | | | 2.0 | % | | 6,339,251 | | | 8.9 | % | | 2.6 | % |
Greg L. Armstrong | | | 1,472,850 | (8) | | * | | | — | | | — | | | * | |
Harry N. Pefanis | | | 797,532 | (8) | | * | | | — | | | — | | | * | |
Willie Chiang | | | — | (8) | | — | | | — | | | — | | | — | |
Al Swanson | | | 125,215 | (8) | | * | | | — | | | — | | | * | |
Daniel J. Nerbonne | | | 13,077 | (8) | | * | | | — | | | — | | | * | |
John vonBerg | | | — | (8) | | — | | | — | | | — | | | — | |
Oscar K. Brown | | | 900 | | | * | | | — | | | — | | | * | |
Victor Burk | | | 17,043 | (8) | | * | | | — | | | — | | | * | |
Everardo Goyanes | | | 88,400 | | | * | | | — | | | — | | | * | |
Gary R. Petersen(2) | | | 53,200 | (8) | | * | | | 25,357,120 | | | 35.7 | % | | 3.2 | % |
John T. Raymond(3) | | | 1,599,616 | | | * | | | 20,376,259 | | | 28.7 | % | | 2.8 | % |
Bobby Shackouls | | | 20,033 | (8) | | * | | | — | | | — | | | * | |
Robert V. Sinnott | | | 348,893 | (8)(9) | | * | | | — | | | — | | | * | |
J. Taft Symonds | | | 109,050 | (8) | | * | | | — | | | — | | | * | |
Christopher M. Temple | | | 31,250 | | | * | | | — | | | — | | | * | |
All directors and executive officers as a group (17 persons) | | | 4,846,501 | (8)(10) | | * | | | 45,733,379 | (10) | | 64.4 | % | | 6.3 | % |
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Less than 1%.
**
Common Unit Equivalents include outstanding common units and Series A preferred units combined.
(1)
The Series A preferred units vote on an as-converted basis with the common units and have certain other class voting rights with respect to any amendment to our partnership agreement that would adversely affect any rights, preferences or privileges of the Series A preferred units. The Series A preferred units are convertible, generally on a one-for-one basis and subject to customary
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anti-dilution adjustments, (i)at any time by the holders after January 28, 2018,or by us.
(2)
The address for this holder is 333 Clay Street, Suite 1600, Houston, Texas 77002. The number of common units owned by Plains AAP equals the number of outstanding Class A and (ii) by us after January 28, 2019.(2)- Class B shares of PAGP (232,653,928). Plains AAP is not entitled to vote these units in the election of directors.
(3)
Reflects beneficial ownership as of December 31, 2023 as reported in a Schedule 13G filed with the SEC on February 5, 2024. The address of this holder is 1290 Broadway, Suite 1000, Denver, Colorado 80203.
(4)
The Series A preferred units are owned by funds managed by EnCap Partners, LLC, whose address is 1100 Louisiana, Suite 4900,9651 Katy Freeway, 6th Floor, Houston, Texas 77002.77024. Gary R. Petersen may be deemed to be the beneficial owner of the Series A preferred units owned by these holders by virtue of being a member of EnCap Partners, LLC, the managing member of each holder'sholder’s general partner. Mr. Petersen disclaims beneficial ownership of the Series A preferred units except to the extent of his pecuniary interest therein.
(3)
(5)
The address for this holder is 2229 San Felipe, Suite 1300, Houston, Texas 77019. John T. Raymond has sole voting and dispositive power over the Series A preferred units and may be deemed to be the beneficial owner of the Series A preferred units owned by the holder by virtue of being the sole member of the general partner of the holder'sholder’s manager. Mr. Raymond disclaims beneficial ownership of the Series A preferred units except to the extent of his pecuniary interest therein.
(4)
(6)
The address for this holder is 600 Travis, Suite 6000, Houston, Texas 77002.
(5)
(7)
The Series A preferred units are owned by a fundfunds managed by Stonepeak Partners LLC, whose address is 717 Fifth Avenue, 25th550 W. 34th Street, 48th Floor, New York, New York 10022.
(6)10001.
(8)
The address for this holder is 333 Clay100 Saint Paul Street, Suite 1600, Houston, Texas 77002.
(7)Richard A. Kayne is Chief Executive Officer and Director of Kayne Anderson Investment Management, Inc., which is the general partner of Kayne Anderson Capital Advisors, L.P. ("KACALP"). Various accounts under the management or control of KACALP own 9,614,029 common units and 6,339,251 Series A preferred units. Mr. Kayne may be deemed to beneficially own such units. In addition, Mr. Kayne directly owns or has sole voting and dispositive power over 4,770,896 common units. Mr. Kayne disclaims beneficial ownership of any of our partner interests other than units held by him or interests attributable to him by virtue of his interests in the accounts that own our partner interests. The address for Mr. Kayne and Kayne Anderson Investment Management, Inc. is 1800 Avenue of the Stars, 3rd Floor, Los Angeles, California 90067.
(8)700, Denver, CO 80206.
(9)
Does not include unvested phantom units granted under our Long-Term Incentive Plans, none of which will vest within 60 days of the date hereof.Plans. See "Executive Compensation—“Executive Compensation — Outstanding Equity Awards at Fiscal Year-End" and "—Director Compensation."
(9)PursuantYear-End”.
(10)
Consistent with our policies that prohibit pledging of company securities, to the PAGP GP LLC Agreement, Mr. Sinnott is designated as a member of the board of directors of PAGP GP by KAFU Holdings (QP), L.P., which is controlled by Kayne Anderson Investment Management, Inc., of which he is President. Mr. Sinnott disclaims any deemed beneficial ownership of the interests owned by KAFU Holdings (QP), L.P. or its affiliates, beyond his pecuniary interest therein, if any. Mr. Sinnott has a non-controlling ownership interest in KACALP, which is the general partner of KAFU Holdings (QP), L.P. KACALP is entitled to a percentage of the profits earned by the funds invested in KAFU Holdings (QP), L.P. The address for KAFU Holdings (QP), L.P. is 1800 Avenue of the Stars, 3rd Floor, Los Angeles, California 90067.
(10)As of March 20, 2018,our knowledge, no units were pledged by directors or Named Executive Officers.Officers as of March 25, 2024.
(11)
In addition to owning the common units or Series A preferred units as shown in the table above, certain of our Named Executive Officers and directors also own PAGP Class A shares or PAGP Class B shares and are entitled to vote those shares in the election of directors at the PAGP Annual Meeting. Information regarding the beneficial ownership of PAGP and PAA voting securities (exclusive of unvested equity awards) by our Named Executive Officers, directors and all director and executive officers as a group is reflected below:
| | | Name | | | | Total PAA
Common and
Series A
Preferred Units | | | | PAGP
Class A
Shares | | | | PAGP
Class B
Shares | | | | Total
PAGP
Class A
and
Class B
Shares | | | | Total
Combined
PAA/
PAGP
Ownership | | | | Percentage
of
Overall
Voting
Interests | | |
| | | Willie Chiang | | | | | | 592,641 | | | | | | | 378,704 | | | | | | | 353,489 | | | | | | | 732,193 | | | | | | | 1,324,834 | | | | | | | * | | | |
| | | Harry Pefanis | | | | | | 420,194 | | | | | | | 1,108,653 | | | | | | | 2,268,988 | | | | | | | 3,377,641 | | | | | | | 3,797,835 | | | | | | | * | | | |
| | | Al Swanson | | | | | | 393,200 | | | | | | | 1,351,839 | | | | | | | — | | | | | | | 1,351,839 | | | | | | | 1,745,039 | | | | | | | * | | | |
| | | Richard McGee | | | | | | 397,652 | | | | | | | — | | | | | | | 429,346 | | | | | | | 429,346 | | | | | | | 826,998 | | | | | | | * | | | |
| | | Chris Chandler | | | | | | 254,191 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 254,191 | | | | | | | * | | | |
| | | Jeremy Goebel | | | | | | 279,223 | | | | | | | 1,314 | | | | | | | 35,350 | | | | | | | 36,664 | | | | | | | 315,887 | | | | | | | * | | | |
| | | Greg Armstrong | | | | | | 1,508,418 | | | | | | | 1,865,812 | | | | | | | 4,492,268 | | | | | | | 6,358,080 | | | | | | | 7,866,498 | | | | | | | 1.0 | | | |
| | | Victor Burk | | | | | | 37,043 | | | | | | | 28,633 | | | | | | | — | | | | | | | 28,633 | | | | | | | 65,676 | | | | | | | * | | | |
| | | Ellen DeSanctis | | | | | | — | | | | | | | 21,400 | | | | | | | — | | | | | | | 21,400 | | | | | | | 21,400 | | | | | | | * | | | |
| | | Kevin McCarthy | | | | | | 200,000 | | | | | | | 110,469 | | | | | | | — | | | | | | | 110,469 | | | | | | | 310,469 | | | | | | | * | | | |
| | | Gary Petersen | | | | | | 25,425,320 | | | | | | | 25,254 | | | | | | | — | | | | | | | 25,254 | | | | | | | 25,450,574 | | | | | | | 3.3 | | | |
| | | Alexandra Pruner | | | | | | — | | | | | | | 38,004 | | | | | | | — | | | | | | | 38,004 | | | | | | | 38,004 | | | | | | | * | | | |
| | | John Raymond | | | | | | 21,978,875 | | | | | | | 272,504 | | | | | | | 11,458,736 | | | | | | | 11,731,240 | | | | | | | 33,710,115 | | | | | | | 4.4 | | | |
| | | Bobby Shackouls | | | | | | 35,033 | | | | | | | 30,511 | | | | | | | — | | | | | | | 30,511 | | | | | | | 65,544 | | | | | | | * | | | |
| | | Chris Temple | | | | | | — | | | | | | | 40,249 | | | | | | | — | | | | | | | 40,249 | | | | | | | 40,249 | | | | | | | * | | | |
| | | Lawrence Ziemba | | | | | | 2,346 | | | | | | | 44,890 | | | | | | | — | | | | | | | 44,890 | | | | | | | 47,236 | | | | | | | * | | | |
| | | All directors and
executive officers
as a group
(17 persons) | | | | | | 51,661,792 | | | | | | | 5,318,236 | | | | | | | 19,184,581 | | | | | | | 24,502,817 | | | | | | | 76,164,609 | | | | | | | 9.9 | | | |
*
Less than 1%.
Beneficial Ownership of General Partner Interest
Plains AAP owns a significant limited partner interest in us and, indirectly through its 100% member interest in PAA GP LLC, our non-economic general partner interest. GP LLC owns a limited partner interest andthe non-economic general partner interest in Plains AAP. The Class A limited partners of Plains AAP together with the
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holders of the AAP Management Units, collectively own 100% of the economic interests in Plains AAP. The following table sets forth the percentage ownership of the Class A limited partners of Plains AAP, including certain of our directors and Named Executive Officers, and the resulting economic interest of such limited partners and the holders of the AAP Management Units as a group, in each case as of March 20, 2018:
25, 2024: | | | Name of Owner and Address
(in the case of Owners of more than 5%) | | | | Percentage
Ownership
of
Plains
AAP, L.P.
Class A LP
Interest(1) | | |
| | | Plains GP Holdings, L.P. | | | | | | 84.8% | | | |
| | | 333 Clay Street, Suite 1600 | | | | | | | | | |
| | | Houston, TX 77002 | | | | | | | | | |
| | | Lynx Holdings I, LLC | | | | | | 1.4% | | | |
| | | John T. Raymond | | | | | | 3.6% | | | |
| | | Greg L. Armstrong | | | | | | 1.9% | | | |
| | | Willie Chiang | | | | | | * | | | |
| | | Harry N. Pefanis | | | | | | * | | | |
| | | Richard McGee | | | | | | * | | | |
| | | Jeremy Goebel | | | | | | * | | | |
| | | Various Individual and Other Investors | | | | | | 7.0% | | | |
| | | | | | | |
Name of Owner and Address (in the case of Owners of more than 5%) | | Percentage
Ownership of
Plains AAP, L.P.
Class A LP
Interest | | Economic
Interest in
Plains AAP, L.P.(1) | |
|---|
Plains GP Holdings, L.P. and Plains All American GP LLC | | | 55.5 | % | | 55.1 | % |
333 Clay Street, Suite 1600 | | | | | | | |
Houston, TX 77002 | | | | | | | |
EMG Investment, LLC | | | 16.1 | % | | 16.0 | % |
2229 San Felipe, Suite 1300 | | | | | | | |
Houston, TX 77019 | | | | | | | |
KAFU Holdings (QP), L.P. and Affiliates | | | 7.3 | % | | 7.3 | % |
1800 Avenue of the Stars, 3rd Floor | | | | | | | |
Los Angeles, CA 90067 | | | | | | | |
Oxy Holding Company (Pipeline), Inc. | | | 10.6 | % | | 10.5 | % |
5 Greenway Plaza | | | | | | | |
Houston, TX 77046 | | | | | | | |
Strome PAA, L.P. and Affiliate | | | 1.0 | % | | 1.0 | % |
Windy, L.L.C. | | | 2.4 | % | | 2.4 | % |
Lynx Holdings I, LLC | | | 1.1 | % | | 1.1 | % |
Greg L. Armstrong | | | 2.0 | % | | 2.0 | % |
Harry N. Pefanis | | | 1.3 | % | | 1.3 | % |
Daniel J. Nerbonne | | | * | | | * | |
Various Individual Investors | | | 2.7 | % | | 2.7 | % |
AAP Management Unitholders(2) | | | — | | | 0.6 | % |
*
(1)
Plains AAP owns approximately 284232.7 million PAA common units and a 100% member interest in PAA GP LLC, which owns our non-economic general partner interest.
(2)Represents a profits interest in AAP in the form of AAP Management Units owned by certain members of management.
EQUITY COMPENSATION PLAN INFORMATION TABLE
The following table sets forth certain information with respect to our equity compensation plans as of December 31, 2017.2023. For a description of these plans, see "Certain“Certain Relationships and Related Transactions—Transactions — Equity-Based Long-Term Incentive Plans."”
| | | | | | | | | | | |
Plan Category | | | | | | Number of Units
to be Issued
upon
Exercise/
Vesting
of
Outstanding
Options,
Warrants and
Rights
(a) | | | | | | Weighted Average
Exercise Price of
Outstanding
Options,
Warrants and
Rights
(b) | | | | | | Number of
Units
Remaining
Available for
Future Issuance
under Equity
Compensation
Plans
(c) | | | |
|---|
| | Equity compensation plans approved
by unitholders: 2013 | | | | | | | | | | | | | | | | | | | | | | | |
| | | 2021 Long Term Incentive Plan | | | 3,444,745 | (1) | | 10,043,814(1) | | | | | | | N/A(2)(2) | | | 7,638,634(1)(3) | | | | 15,565,007(3)(4) | | | |
| | Equity compensation plans not
approved by unitholders:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | PNG Successor LTIPPlan | | | 613,737 | (4) | | 328,180(4) | | | | | | | N/A(2)(2) | | | 514,534(3)(4) | | | | 85(3)(4) | | | |
The 20132021 Long-Term Incentive Plan (the "2013 Plan"“2021 Plan”), which was approved by our unitholders in NovemberMay 2021, amended, restated and renamed the 2013 consolidated three prior plans (the Plains All American GP LLC 1998 Long-Term Incentive Plan (the "1998 Plan"), the Plains All American GP LLC 2005 Long-Term Incentive Plan (the "2005 Plan"), and the PPX Successor Long-Term Incentive Plan (the "PPX Successor Plan")“2013 Plan” or “prior plan”). The 20132021 Plan contemplates the issuance or delivery of up to 13,074,68628,786,102 common units to satisfy awards under the plan, which amount is net of 4,774,9329,063,516 common units previously issued under the prior plans.plan. The number of units presented in column (a) assumes that all remainingoutstanding grants will be satisfied by the issuance of new units upon vesting unless such grants are by their terms payable only in cash. In fact, a substantial numberSome portion of the phantom units that have vested were satisfied without the issuance of units. These phantom units weremay be settled in cash or will be withheld for taxes. Any units not issued upon vesting will become "available“available for future issuance"issuance” under column (c).
(2)
Phantom unit awards under the 20132021 Plan and PNG Successor Plan (defined below) vest without payment by recipients.
(3)
In accordance with Item 201(d) of Regulation S-K, column (c) excludes the securities disclosed in column (a). However, as discussed in footnotes (1) and (4), any phantom units represented in column (a) that are not satisfied by the issuance of units become "available“available for future issuance."
”
(4)
In December 2013, in connection with the PNG Merger, we adopted and assumed the PAA Natural Gas Storage, L.P. 2010 Long Term Incentive Plan (the "PNG“PNG Legacy Plan"Plan”), and all outstanding awards of PNG phantom units were converted into comparable awards of PAA phantom units by applying the merger exchange ratio of 0.445 PAA common units for each PNG common unit and rounding down for any fractions. The GP LLC board of directors amended and restated the PNG Legacy Plan, which is now known as the PNG Successor Long-Term Incentive Plan (the "PNG“PNG Successor Plan"Plan”). The PNG Successor Plan contemplates the issuance or delivery of up to 1,319,983 units to satisfy awards under the plan, which amount is net of 15,017 common units previously issued under the PNG Legacy Plan. The number of units presented in column (a) assumes that all outstanding grants will be satisfied by the issuance of new units upon vesting unless such LTIPs are by their terms payable only in cash. In fact, someSome portion of the phantom units may be settled in cash and some portionor will be withheld for taxes. Any units not issued upon vesting will become "available“available for future issuance"issuance” under column (c).
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Our operations and activities are managed, and our officers and personnel are employed, by our general partner (or, in the case of our Canadian operations, Plains Midstream Canada)Canada ULC). We do not pay our general partner a management fee, but we do reimburse our general partner for all expenses incurred on our behalf (other than expenses related to the AAP Management Units). Total costs reimbursed by us to our general partner for the year ended December 31, 20172023 were approximately $489$546 million. Prior to completion of the Simplification Transactions on November 15, 2016, our
Our general partner was entitled to receive (i) distributions resulting from its ownership of a 2% economic general partner interest in us, and (ii) incentive distributions resulting from its ownership of all of the incentive distribution rights ("IDRs") in us if the amount we distributed with respect to any quarter exceeded certain specified levels. As a result of the Simplification Transactions, the IDRs were eliminated and our general partner now owns a non-economic general partner interest in us and, as of March 20, 2018,25, 2024, owned approximately 284232.7 million common units (representing approximately 36%30% of our outstanding common units and Series A preferred units combined). This limited partner interest entitles our general partner to receive quarterly distributions at the same rate as other common unitholders.unitholders; however, these units are not entitled to vote in the election of directors.
Equity-Based Long-Term Incentive Plans
General
In November 2013,May 2021, our unitholders approved the adoption of the 20132021 Plan, which consolidated three prior plans (the 1998 LTIP,amended, restated and renamed the 2005 LTIP, and the PPX Successor Plan).2013 Plan. In December 2013, in connection with the PNG Merger, we adopted and assumed the PNG Legacy Plan, and all outstanding awards of PNG phantom units were converted into comparable awards of PAA phantom units by applying the merger exchange ratio of 0.445 PAA common units for each PNG common unit and rounding down for any fractions. The Board amended and restated the PNG Legacy Plan, which is now known as the PNG Successor Plan (together with the 20132021 Plan, the "Plans"“Plans”). The provisions of the PNG Successor Plan are substantially the same as the 2013 Plan, except that new awards under the PNG Successor Plan may only be made to employees hired after the date of the PNG Merger. Awards contemplated by the Plans include phantom units, distribution equivalent rights (DERs), unit appreciation rights, restricted units, options, DERs and unit options.cash awards. The 20132021 Plan authorizes the grant of awards covering an aggregate of 13,074,68628,786,102 common units deliverable upon vesting or exercise (as applicable) of such awards. The PNG Successor Plan authorizes the grant of awards covering an aggregate of 1,319,983 common units deliverable upon vesting or exercise (as applicable) of such awards.
The Plans are administered by the Compensation Committee or other Board committee appointed to administer the Plans, or by the Board. The plan administrator has the right to alterterminate or amend the Plans from time to time, including, subject to any applicable NYSENasdaq listing requirements, increasing the number of common units with respect to whichavailable for awards under the Plans. No change may be granted; provided, however, that no change inmade to any outstanding grant may be made that would materially impairreduce the rightsbenefits of the participantholder of such grant without the consent of such participant.holder.
Common units to be delivered upon the vesting and settlement of rightsawards may be common units acquired in the open market, or,newly issued common units, common units acquired from us, any of our affiliates or any other person, or any combination of the foregoing. Our general partner will be entitled to reimbursement by us for the cost incurred in acquiring common units. In addition, over the term of the Plans we may issue new common units to satisfy delivery obligations under the grants. When we issue new common units upon vesting and settlement of grants, the total number of common units outstanding increases.
Pursuant to the terms of the 2021 Plan, if any Award is forfeited, canceled, exercised or otherwise terminated without the actual delivery of common units pursuant to such Award, or if any common units under an Award are held back to cover tax withholding, then, in either such case, any common units that are so forfeited, canceled, exercised or otherwise terminated without the actual delivery of common units or held back to cover tax withholding (excluding Restricted Unit Awards) shall be available to satisfy future Awards under the 2021 Plan. Units tendered or withheld in payment of any exercise or purchase price of an Award, units that were subject to an option or unit appreciation right but were
not issued or delivered as a result of the net settlement of such Award, and units repurchased on the open market with the proceeds of an option’s exercise price, will not, in each case, be available for future Awards under the 2021 Plan.
As of December 31, 2023, grants of approximately 10,043,814 and 328,180 unvested phantom units were outstanding under the 2021 Plan and PNG Successor Plan, respectively, and approximately 15,565,007 and 85 remained available for future grant, respectively. The plan administrator may, in the future, make additional grants under the Plans to employees and directors containing such terms as the plan administrator shall determine.
Awards
Phantom Units. A phantom unit entitles the grantee to receive, upon the vesting of the phantom unit, a common unit (or cash equivalent, depending on the terms of the grant). The issuance of the common units upon vesting of phantom units is primarily intended to serve as a means of incentive compensation for performance. Therefore, no consideration is paid to us by the plan participants upon receipt of the common units.
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As of December 31, 2017, grants of approximately 3,530,212 and 613,737 unvested phantom units were outstanding under the 2013 Plan and PNG Successor Plan, respectively, and approximately 7,638,634 and 514,534 remained available for future grant, respectively. The compensation committee or Board may, in the future, make additional grants under the Plans to employees and directors containing such terms as the compensation committee or Board shall determine, including DERs with respect to phantom units. DERs entitle the grantee to a cash payment, either while the award is outstanding or upon vesting, equal to any cash distributions paid on a unit while the award is outstanding.
Unit Appreciation Rights. A unit appreciation right is an award that, upon exercise, entitles the holder to receive the excess, if any, of the fair market value of a common unit on the exercise date over the grant price of the unit appreciation right. The excess may be paid in cash and/or common units as determined by the plan administrator in its discretion.discretion, provided that unit appreciation rights may not have an exercise price that is less than the fair market value of the common units on the date of grant. No unit appreciation rights have been granted under the Plans to date.
Restricted Unit Awards. A restricted unit is a common unit granted under the Plan that is subject to a risk of forfeiture, restrictions on transferability, and any other restrictions that may be imposed by the plan administrator in its discretion. No restricted unit awards have been granted under the Plans to date. Unit
Options. Options may be granted under the Plan to purchase a specific number of common units at a set exercise price. The exercise price of each option granted under the Plan will be determined by the plan administrator at the time the option is granted, provided thatno each option may not have an exercise price that is less than the fair market value of the common units on the date of grant. No options have been granted under the Plans to date. AAP Management Units
In August 2007,
Distribution Equivalent Rights. Awards granted under the ownersPlans (other than Restricted Unit Awards) may include DERs. DERs entitle the grantee to a cash payment, either while the Award is outstanding or upon vesting, equal to the cash distributions paid on a unit while the Award is outstanding.
Cash Awards. Cash Awards may be granted on a free-standing basis or as an element of, AAP authorizedas a supplement to, or in lieu of any other Award granted under the creation and issuance2021 Plan.
Other Provisions
Tax Withholding. Our General Partner or one of AAP Management Units and authorized the compensation committee to issue grants of AAP Management Units to create long-term incentives for our management. Each AAP Management Unit represents a "profits interest" in AAP, which entitles the holder to participate in future profits and losses from operations, current distributions from operations, and an interest in future appreciation or depreciation in AAP's asset values. As of March 20, 2018, 1,759,860 AAP Management Units were issued and outstanding. The compensation committee does not plan to issue any additional AAP Management Units. The outstanding AAP Management Units are subject to restrictions on transfer and generally become "earned" (entitled to receive distributions) in percentage increments upon achievement of certain performance thresholds that are aligned with the interests of our common unitholders, such as distributable cash flow per common unit. As of March 20, 2018, approximately 52% of the then outstanding AAP Management Units had been earned. The remaining AAP Management Units will be earned upon achievement of certain distributable cash flow levels.
To encourage retention following achievement of the applicable performance benchmarks, AAP retained a call right to purchase any earned AAP Management Units at a discount to fair market value that is generally exercisable upon the termination of a holder's employment with GP LLC and its affiliates (other than terminationare authorized to withhold from any Award, from any payment due or transfer made under certain circumstances such asany Award or from any compensation or other amount owing to a termination without causeplan participant, the amount (in cash, common units, other securities or byother property) of any applicable taxes payable with respect to the employee for good reason) prior to certain stated dates. If a holdergrant of an AAP Management Unit remains employed pastAward, its exercise, the lapse of restrictions applicable to an Award or in connection with any payment relating to an Award or the transfer of an Award and to take such designated date (or priorother actions as may be necessary to such date such holder is terminated without cause or quits for good reason),satisfy any earned units are no longer subjecttax withholding obligations with respect to an Award.
Change of Control. Except to the call right and are deemed to have "vested." Theextent specifically provided in an Award agreement, vesting dates for outstanding AAP Management Unit grants range from January 1, 2020 to January 1, 2023, depending on the date of grant. The size of the discount to fair market value reflected in the potential call right purchase price decreases over time pursuant to a
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formula set forth in each AAP Management Unit grant agreement. AAP Management Unit grants also provide that all earned AAP Management Units and a portion of any unearned and unvested AAP Management Units will vestan Award shall not occur solely upon a change of control. All earned AAP Management Units will also vest if AAP does not timely exercise its call right.
As long as the PAGP Class A shares are publicly traded, each vested AAP Management Unit
Minimum Vesting Requirement. The 2021 Plan provides that Awards that must or may be converted into AAPsettled in units shall vest no earlier than the first anniversary of the date the Award is granted. Notwithstanding the foregoing, Awards that result in the issuance of an aggregate of up to 5% of the units available
for issuance under the 2021 Plan may be granted to one or more plan participants without regard to this minimum vesting requirement.
Equity Ownership Guidelines. The plan administrator retains the discretion under the 2021 Plan to impose a holding period with respect to an Award or the units received in connection with an Award. Pursuant to the Equity Ownership Guidelines adopted by our Board in November 2020, our executive officers and a like numberDirectors will be required to hold 100% of PAGP Class B shares based on a conversion ratioany units acquired upon vesting of approximately 0.941 AAP unitsAwards until the applicable ownership requirements are met.
Clawback Policy. The 2021 Plan provides that all Awards granted thereunder are subject to any written clawback policies that we may adopt, including any policy adopted to conform to the Dodd-Frank Wall Street Reform and PAGP Class B shares for each AAP Management Unit. FollowingConsumer Protection Act of 2010 and the rules promulgated thereunder such as our Amended and Restated Clawback Policy adopted in November 2023.
Transferability of Awards. Options and unit appreciation rights are only exercisable by the plan participant during the plan participant’s lifetime, or by the person to whom the plan participant’s rights pass by will or the laws of descent and distribution. No Award or right granted under the 2021 Plan may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered and any such conversion,purported transfer shall be void and unenforceable. Notwithstanding the resulting AAP units and PAGP Class B shares are exchangeable for PAGP Class A sharesforegoing, the plan administrator may, in its discretion, allow a plan participant to transfer an option or redeemable for our common units, in each case on a one-for-one basis as provided in the AAPunit appreciation right without consideration to an immediate family member or a related family trust, limited partnership, agreement. In connectionor similar entity on the terms and conditions established by the plan administrator from time to time, provided that no Award may be transferred to a third-party financial institution for value.
Anti-Dilution Adjustments. Upon the occurrence of any “equity restructuring” event that could result in an additional compensation expense under FASB ASC Topic 718 if adjustments to Awards with respect to such event were discretionary, the closing of the Simplification Transactions, AAP received one PAA common unit for each outstanding earned and vested AAP Management Unit (on a post-conversion basis), and PAA withheld approximately 800,000 units from the Simplification consideration for future distribution or issuance when and if any outstanding but unearned AAP Management Units become earned. Simplification Transactions
The Simplification Transactions completed in November 2016 included, among other things:
•the permanent elimination of our IDRs and the economic rights associated with our 2% general partner interest in exchange for the issuance by us to AAP of 245.5 million common units (including approximately 0.8 million units to be issued in the future) and the assumption by us of all of AAP's outstanding debt ($642 million);
•the implementation of a unified governance structure pursuant to which the board of directors of GP LLC was eliminated and an expanded board of directors of PAGP GP assumed oversight responsibility over both us and PAGP;
•the provision for annual PAGP shareholder meetings beginning in 2018 for the purpose of electing certain directors, and the participation of our common unitholders (other than AAP) and Series A preferred unitholders in such elections through our ownership of Class C shares in PAGP, which provide us, as the sole holder of such Class C shares, the right to vote in elections of eligible PAGP directors together with the holders of PAGP Class A and Class B shares;
•the execution by AAP of a reverse split toplan administrator will equitably adjust the number and type of AAP units such that the number of outstanding AAP units (assuming the conversion of AAP Management Units into AAP units) equaled the number of our common units receivedcovered by AAP ateach outstanding Award and the closingterms and conditions of such Award to equitably reflect the Simplification Transactions. Simultaneously, PAGP executed reverse splits torestructuring event, and the plan administrator will adjust the number of (i) PAGP Class A shares outstanding to equal the number of AAP units PAGP owned following AAP's reverse split and (ii) PAGP Class B shares outstanding to equal the numbertype of AAP units owned by AAP's unitholders other than PAGP following AAP's reverse unit split. These reverse splits, along with the Omnibus Agreement described below, resulted in economic alignment between PAGP's Class A shareholders and our common unitholders, such that the number of outstanding PAGP Class A shares equals the number of AAP units owned by PAGP, which in turn equals the number of our common units held by AAP that are attributable to PAGP's interest in AAP. The Plains Entities (defined below) also entered into an Omnibus Agreement, pursuant to which such one-to-one relationship will be maintained subsequent to the closing of the Simplification Transactions; and
•the creation of a right for certain holders of the AAP units to cause AAP to redeem such AAP units in exchange for an equal number of our common units held by AAP (an "AAP Unit Redemption").
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In connection with the Simplification Transactions completed in November 2016, we entered into an amended and restated administrative agreement (the "Administrative Agreement") with PAGP, PAGP GP, AAP, PAA GP LLC and GP LLC to address, among other things, potential conflicts with respect to business opportunitieswhich future Awards may be granted under the 2021 Plan. Upon the occurrence of a similar event that may arise among PAGP, PAGP GP, AAP, PAA, PAA GP LLCwould not result in a FASB ASC Topic 718 accounting charge if adjustments to Awards were discretionary, the plan administrator shall have complete discretion to adjust Awards in the manner it deems appropriate. In the event the plan administrator makes any such adjustments, a corresponding and GP LLC. The Administrative Agreement provides that if any business opportunity is presentedproportionate adjustment shall be made with respect to PAGP, PAGP GP, AAP, PAA, PAA GP LLCthe maximum number of common units available under the 2021 Plan and the kind of units or GP LLC, then we will haveother securities available for grant under the first right to pursue such business opportunity. PAGP will have the right to pursue and/or participate in such business opportunity if invited to do so by us, or if we abandon the business opportunity and GP LLC so notifies PAGP GP. We also granted PAGP a license to use the names "PAA" and "Plains" and any associated or related marks.
In connection with the Simplification Transactions completed in November 2016, we entered into an omnibus agreement (the "Omnibus Agreement"“Omnibus Agreement”) with PAGP, PAGP GP, Plains AAP, PAA GP LLC and GP LLC (collectively with us, the "Plains Entities"“Plains Entities”), which provides, for, among other things, the following:•- that all direct or indirect expenses of any of the Plains Entities will be paid by us, other than income taxes, if any, of PAGP GP, PAGP, GP LLC, Plains AAP and PAA GP LLC. Such direct or indirect expenses include, but are not limited to, (i) compensation and expense reimbursements for the directors of PAGP GP, (ii) director and officer liability insurance, (iii) listing exchange fees, (iv) investor relations expenses, and (v) fees related to legal, tax, financial advisory and accounting services. We paid
$4$4.8 million of such expenses in 2017;
•the mechanics by which the number2023.
Other
During 2023, we purchased approximately $2.3 million of
PAGP Class C shares outstanding will equal, at all times, the number of our units that are outstanding and entitled to vote, other than such voting units held by AAP;
•the mechanics by which (i) the total number of PAGP's outstanding Class A shares will equal the number of AAP units held by PAGP, and (ii) the total number of our common units held by AAP will equal the sum of the number of outstanding AAP units and the number of AAP units that are issuable to the holders of vested and earned AAP Management Units;
•the ability of PAGP to issue additional Class A shares and related obligation of PAGP to use the net proceeds therefrom to purchase a like number of AAP units from AAP, and the corresponding obligation of AAP to use the net proceeds therefrom to purchase a like number of common units from us. During 2017, we issued approximately 1.8 million common units to AAP in connection with PAGP's issuance of Class A shares under its Continuous Offering Program and 48.3 million common units to AAP in connection with PAGP's March 2017 underwritten offering of Class A shares; and
•the ability of PAGP to lend proceeds of any future indebtedness incurred by it to AAP, and AAP's corresponding obligation to lend such proceeds to us, in each case on substantially the same terms as incurred by PAGP (also clarifying that we will reimburse the net fees and expenses in connection with the incurrence of such debt; provided that we will only be required to reimburse such net fees and expenses on one occasion with respect to each incurrence of indebtedness by us from AAP). In connection with the Simplification Transactions completed in November 2016, the holders of AAP units other than PAGP and GP LLC entered into a Registration Rights Agreement with us,
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pursuant to which we filed, and will cause to remain continuously effective, a shelf registration statement to permit the public resale of the common units held by AAP immediately following the closing of the Simplification Transactions that are distributable to such holders pursuant to an AAP Unit Redemption. Additionally, we agreed to register the resale of any common units issued to AAP following the closing of the Simplification Transactions pursuant to the Omnibus Agreement in respect of certain of the AAP Management Units. In certain circumstances, the holders will have piggyback registration rights on offerings initiated by persons (other than us) for whom we have the obligation to undertake an underwritten offering (including the holders of its Series A preferred units), and certain holders will collectively have the right to request up to a total of twelve underwritten offerings, subject to size limitations and customary rights of PAA to delay such offerings.
Series A Preferred Unit Offering
In January 2016, we sold approximately 61.0 million unregistered Series A Convertible Preferred Units in a private placement offering to a group of purchasers that included affiliates of EnCap, KAFU and EMG. Net proceeds of the sale, after deducting offering expenses and a transaction fee due to the purchasers, were approximately $1.6 billion.
In connection with the closing of our private placement of Series A preferred units, we entered into a Registration Rights Agreement with the purchasers of the Series A preferred units relating to the registered resale of the common units issuable upon conversion of the Series A preferred units. Pursuant to the Registration Rights Agreement, we filed a registration statement for such registered resale, which registration statement became effective in December 2017. In certain circumstances, the holders of registrable securities (as defined in the Registration Rights Agreement) will have piggyback registration rights on offerings initiated by other holders, and certain purchasers will have rights to request an underwritten offering as described in the Registration Rights Agreement. Holders of registrable securities will cease to have registration rights under the Registration Rights Agreement on the later of (i) the fourth anniversary of the date on which all Series A preferred units have been converted into common units pursuant to our partnership agreement and (ii) the earlier of (x) the date on which such holder is no longer an "affiliate" as such term is defined in Rule 144 promulgated under the Securities Act of 1933, as amended, and (y) the tenth anniversary of the closing.
Other
During 2017, we had net purchases and sales of approximately $1.2 billionpetroleum products from companies affiliated with Oxy.EMG. These ordinary course transactions were conducted at posted tariff rates or prices that we believe approximate market. These transactions included inventory exchanges under crude oil buy/sell agreements, oneBased on our knowledge, the amounts received during 2023 from PAA by companies affiliated with EMG ($2.3 million) did not exceed 5% of which includes a multi-year minimum volume commitment. These amounts do not include revenues from unconsolidated equity investments.
EMG’s consolidated gross revenues.
During 2017,2023, we recognized sales and transportation and storage revenuespurchased approximately $118 million of approximately $5 millionpetroleum products from companies affiliated with EMG. During 2017, we also purchased approximately $284 million of oil from companies affiliated with EMG.EnCap. These ordinary course transactions were conducted at posted tariff rates or prices that we believe
approximate market. During 2017, we purchased approximately $33 million Based on our knowledge, the amounts received during 2023 from PAA by companies affiliated with EnCap ($118 million) did not exceed 5% of oil from companies owned andthe total revenues for all entities controlled by funds managed by KACALP. We pay the same amount per barrel to these companies that we pay to other producers in the area.
An employee in our supply chain management department is the son of Daniel J. Nerbonne, one of our executive officers. Mr. Nerbonne's son's total compensation for 2017 was approximately $154,000.
EnCap.
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An employee in our marketing department, who has been with PAA for over 15 years, is the sondaughter of Daniel J. Nerbonne, one ofWillie Chiang, our executive officers.Chief Executive Officer. Mr. Nerbonne's son'sChiang’s daughter’s total compensation for 20172023 was approximately $177,600.
$180,000.
Review, Approval or Ratification of Transactions with Related Persons
Pursuant to our Governance Guidelines, a director is expected to bring to the attention of the Chairman of the Board, the CEO or the Board any conflict or potential conflict of interest that may arise between the director, such director’s family members, or any affiliate of the director, on the one hand, and PAGP GP, PAA, PAGP or their respective affiliates, on the other. The resolution of any such conflict or potential conflict should, at the discretion of the Board in light of the circumstances, be determined by a majority of the disinterested directors. If a conflict or potential conflict of interest arises between PAA and its limited partners, on the one hand, and our general partner and its owners and affiliates, on the other, the resolution of any such conflict or potential conflict should be addressed by the Board in accordance with the applicable provisions of the partnership agreements of PAA and PAGP. At the discretion of the Board in light of the circumstances, the resolution may be determined by the Board or by a "conflicts committee"“conflicts committee” meeting the definitional requirements for such a committee under the partnership agreements. Pursuant to our Code of Business Conduct, any executive officer must avoid conflicts of interest unless approved byand must disclose any actual or potential conflicts of interest for review and resolution, which may include a formal waiver of the Board.conflict of interest.
In the case of any sale of equity by the Partnership in which an owner or affiliate of an owner of our general partner participates, our practice would be to obtain Board approval for the transaction. The Board typically delegates authority to set the specific terms to a pricing committee, consisting of the CEO and one independent director. Actions by the pricing committee require unanimous approval of such committee.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires directors, executive officers and persons who beneficially own more than ten percent of a registered class of our equity securities to file with the SEC and the NYSE initial reports of ownership and reports of changes in ownership of such equity securities. Such persons are also required to furnish us with copies of all Section 16(a) forms that they file. Such reports are accessible on or through our Internet website athttp://www.plainsallamerican.com.
Based solely upon a review of the copies of Forms 3, 4 and 5 furnished to us, or written representations from certain reporting persons that no Forms 5 were required, we believe that our executive officers and directors complied with all filing requirements with respect to transactions in our equity securities during 2017.
REPORT OF THE AUDIT COMMITTEE
The audit committeeAudit Committee of our Board oversees the Partnership'sPartnership’s financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process, including the systems of internal controls. In fulfilling its oversight responsibilities, the audit committeeAudit Committee reviewed and discussed with management the audited financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2017.2023.
The Partnership'sPartnership’s independent registered public accounting firm, PricewaterhouseCoopers LLP, is responsible for expressing an opinion on the conformity of the audited financial statements with accounting principles generally accepted in the United States of America. The audit committeeAudit Committee reviewed with PricewaterhouseCoopers LLP the firm'sfirm’s judgment as to the quality, not just the acceptability, of the Partnership'sPartnership’s accounting principles and such other matters as are required to be discussed with the audit committeeAudit Committee under generally accepted auditing standards. The audit committeeAudit Committee discussed with PricewaterhouseCoopers LLP the matters required to be discussed byunder applicable requirements of the Public Company Accounting Oversight Board Auditing Standard No. 1301, Communications with(“PCAOB”). The Audit Committees. The audit committeeCommittee received written disclosures and the letter from PricewaterhouseCoopers LLP required by applicable requirements of the Public Company Accounting Oversight BoardPCAOB regarding PricewaterhouseCoopers LLP'sLLP’s communications with the audit committeeAudit Committee concerning independence, and has discussed with PricewaterhouseCoopers LLP its independence from management and the Partnership. Based on the reviews and discussions referred to above, the audit committeeAudit Committee recommended to the Board that the audited financial statements be included in the Annual Report on Form 10-K for the year ended December 31, 20172023 for filing with the SEC.
| | | | | Victor Burk, Chair
Ellen R. DeSanctis
Alexandra D. Pruner
Lawrence M. Ziemba | |
| | |
| | Everardo Goyanes,Chairman |
| | Victor Burk |
| | J. Taft Symonds |
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PRINCIPAL ACCOUNTANT FEES AND SERVICES
The following table details the aggregate fees billed for professional services rendered by our independent auditor for services provided to us and to our subsidiaries (in millions):
| | | | | Year Ended December 31, | |
| | | | | 2023 | | | 2022 | |
| | Audit fees(1) | | | | $ | 5.8 | | | | | $ | 6.1 | | |
| | Audit-related fees(2) | | | | | 0.5 | | | | | | — | | |
| | Tax fees(3) | | | | | 1.6 | | | | | | 1.6 | | |
| | Total | | | | $ | 7.9 | | | | | $ | 7.7 | | |
| | | | | | | |
| | Year Ended December 31, | |
|---|
| | 2017 | | 2016 | |
|---|
Audit fees(1) | | $ | 5.1 | | $ | 5.3 | |
Audit-related fees(2) | | | 0.4 | | | 1.0 | |
Tax fees(3) | | | 1.5 | | | 1.4 | |
| | | | | | | | |
Total | | $ | 7.0 | | $ | 7.7 | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
(1)
(1)- Audit fees include those related to (a) our annual audit (including internal control evaluation and reporting)
;, (b) the audit of certain joint ventures of which we are the operator, and (c) work performed on ourin connection with the registration of publicly held debt and equity.
(2)
Audit-related fees forprimarily related to the years ended December 31, 2017 and 2016 are primarily comprisedassessment of fees associatedinternal controls in connection with the auditsimplementation of financial statements prepared in conjunction with divestiture transactions. Such fees were reimbursed to us by the purchasers.
an information system.
(3)
Tax fees are primarily related to tax processing as well as the preparation of Forms K-1 for our unitholders and international tax planning work associated with the structure of our Canadian investment.
Our audit committeeAudit Committee reviews our external financial reporting, engages our independent auditors and reviews the adequacy of our internal accounting controls. Our audit committeeAudit Committee performs similar functions on PAGP'sPAGP’s behalf. All services provided by our independent auditor to us or to PAGP are subject to pre-approval by our audit committee.Audit Committee. The audit committeeAudit Committee has instituted policies that describe certain pre-approved non-audit services. We believe that the descriptions of services are designed to be sufficiently detailed as to particular services provided, such that (i) management is not required to exercise judgment as to whether a proposed service fits within the description and (ii) the audit committeeAudit Committee knows what services it is being asked to pre-approve. The audit committeeAudit Committee is informed of each engagement of the independent auditor to provide services under the respective policy. All services provided by our independent auditor during the years ended December 31, 20172023 and 20162022 were approved in advance by our audit committee.Audit Committee.
PROPOSAL 2—2 — RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2024.
The second proposal item to be voted on at the PAA Annual Meeting is ratification of the appointment of PricewaterhouseCoopers LLP as our and PAGP's independent registered public accounting firm for the fiscal year ending December 31, 2018. Our2024. Votes cast on this proposal by our Unitholders are being askedwill be “passed through” as instructions to votePAA as to instructhow PAA how toshould vote the PAGP Class C shares that it owns at the PAGP Annual Meeting on ratification of the appointment of PricewaterhouseCoopers LLP as our and PAGP'sPAGP’s independent registered public accounting firm for 2018.2024.
The audit committeeAudit Committee of the Board has appointed PricewaterhouseCoopers LLP to continue to act as our and PAGP'sPAGP’s independent registered public accounting firm for the fiscal year ending December 31, 2018.2024. The Board has directed that such appointment be submitted to our Unitholders for ratification at the PAA Annual Meeting. Ratification of the appointment of PricewaterhouseCoopers LLP as our and
PAGP'sPAGP’s independent registered public accounting firm is not required. The Board, however, is submitting the appointment to our Unitholders for ratification as a good corporate governance practice. Representatives of PricewaterhouseCoopers LLP are expected to be present at the PAA Annual Meeting and will have an opportunity to make a statement if they so desire. They will also be available to respond to appropriate questions.
PROPOSAL 3 — ADVISORY VOTE TO APPROVE OUR 2023 NAMED EXECUTIVE OFFICER COMPENSATION
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE, TO INSTRUCT PAA TO VOTE "FOR"ON A NON-BINDING ADVISORY BASIS, “FOR” THE RATIFICATIONRESOLUTION APPROVING THE 2023 COMPENSATION OF THE APPOINTMENT OF PRICEWATERHOUSECOOPERS LLP AS PAA'S AND PAGP'S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING DECEMBER 31, 2018.
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PROPOSAL 3—ADVISORY VOTE TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION
OFFICERS AS DESCRIBED IN THIS PROXY STATEMENT.
This proposal, commonly known as a "say-on-pay"“say-on-pay” proposal, provides our Unitholders with the opportunity to cast a pass-through advisory vote on the approval of the compensation of our Named Executive Officers. The Board recognizes that executive compensation is an important matter for our Unitholders. As described in detail in the "Executive Compensation"“Executive Compensation” section and elsewhere in this proxy statement, the compensation committeeCompensation Committee is tasked with the implementation of our executive compensation philosophy, and the core of that philosophy has been, and continues to be, to pay our executive officers based on our performance. In particular, the compensation committeeCompensation Committee strives to attract, retain and motivate exceptional executives, to reward past performance measured against established goals and provide incentives for future performance, and to align executives'executives’ long-term interests with the interests of our Unitholders. To do so, the compensation committeeCompensation Committee uses a combination of shortshort- and long-term incentive compensation to reward near-term performance and to encourage executives'executives’ commitment to our long-range, strategic business goals. It is the intention of the compensation committeeCompensation Committee that our executive officers be compensated competitively and consistently with our strategy, sound corporate governance principles and Unitholder interests and concerns. As described in the CD&A,Compensation Discussion and Analysis section of this proxy statement, we believe our compensation program is effective, appropriate and strongly aligned with the long-term interests of our Unitholders and that the total compensation provided to the Named Executive Officers (including potential payouts upon a termination or change of control) is reasonable and not excessive. As you consider this Proposal 3, we urge you to read the CD&ACompensation Discussion and Analysis section of this proxy statement for additional details on executive compensation, including the more detailed information about our compensation philosophy and objectives, and to review the tabular disclosures regarding Named Executive Officer compensation together with the accompanying narrative disclosures in the "Executive Compensation"Executive Compensation section of this proxy statement. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2012,2010, as well as Section 14A of the Exchange Act, and the rules promulgated thereunder, enablesprovides our Unitholders with the opportunity to express their views, on an advisory basis, on the compensation of the Named Executive Officers. In accordance with the preference expressed by our Unitholders at our 2018 Annual Meeting, the Board determined in 2018 that we would provide this opportunity annually until the next advisory vote on the frequency of future advisory votes to approve the compensation of our Named Executive Officers, which will occur at this Annual Meeting. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the Named Executive Officers and the philosophy, policies and practices described in this proxy statement. As an advisory vote, this Proposal 3 is not binding on the Board or the compensation committee,Compensation Committee, will not overrule any decisions made by the Board or the compensation committeeCompensation Committee or require the Board or the compensation committeeCompensation Committee to take any action. Although the vote is non-binding, the Board and the compensation committeeCompensation Committee value the opinions of our Unitholders and will carefully consider the outcome of the vote when making future compensation decisions for executive officers. In particular, to the extent there is any significant vote against the Named Executive Officers'Officers’ compensation as disclosed in this proxy statement, we will consider our Unitholders'Unitholders’ concerns, and the compensation committeeCompensation Committee will evaluate whether any actions are necessary to address those concerns. For the reasons set forth above, the following resolution will be submitted for approval at the PAA Annual Meeting: "
“RESOLVED, that the compensation paid to the Named Executive Officers during and with respect to the calendar year ended December 31, 2023, as disclosed pursuant to Item 402 of Regulation S-K in PAA'sPAA’s proxy statement for its 20182024 Annual Meeting of Unitholders, including the Compensation Discussion and Analysis, compensation tables and accompanying narrative discussion, is hereby approved."”
PROPOSAL 4 — ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO INSTRUCT PAA TO VOTE, ON A NON-BINDING ADVISORY BASIS, "FOR" THE RESOLUTION APPROVING THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERSFOR “ONE YEAR” AS DESCRIBED ABOVE.
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PROPOSAL 4—ADVISORY VOTE ON THE FREQUENCY OF FUTURE ADVISORY VOTES TO APPROVE OUR NAMED EXECUTIVE OFFICER COMPENSATION
COMPENSATION.
This proposal, commonly known as a "say-on-frequency"“say-on-frequency” proposal, provides our Unitholders with the opportunity to cast a pass-through advisory vote on whether PAGP should hold a Shareholder advisory vote to approve our named executive officer compensation (such as in Proposal 3 above) every one, two or three years or to abstain from such vote. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as well as Section 14A of the Exchange Act, and the rules promulgated thereunder, provides our Unitholders with the opportunity to express their views, on an advisory basis, on the frequency with which we seek advisory votes to approve the compensation of our Named Executive Officers.
The Board recommends that PAGP hold an advisory vote to approve our named executive officer compensation every year. The Board believes that an annual advisory vote to approve named executive officer compensation provides our Unitholders with a frequent and consistent opportunity to express their views on our executive compensation as disclosed in the CD&A. It is important to note that our compensation objectives are designed to reward executives both for meeting or exceeding short-term financial and operating goals as well as furthering our long-term strategy. Accordingly, the Board encourages our Unitholders to consider our executive compensation practices and the results achieved over a multi-year horizon. Nonetheless, the Board believes that an annual advisory vote will allow the compensation committeeCompensation Committee to more timely take into account the views of our Unitholders. As an advisory vote, this Proposal 4 is not binding on the Board or the
compensation committee,Compensation Committee, will not overrule any decisions made by the Board or the
compensation committeeCompensation Committee or require the Board or the
compensation committeeCompensation Committee to take any action. Although the vote is non-binding, the Board and the
compensation committeeCompensation Committee value the opinions of our Unitholders and will carefully consider the outcome of the vote when making future decisions regarding the frequency of the vote to approve named executive officer compensation.
THE BOARD UNANIMOUSLY RECOMMENDS THAT YOU VOTE TO INSTRUCT PAA TO VOTE, ON A NON-BINDING ADVISORY BASIS, FOR "ONE YEAR" AS THE FREQUENCY
OTHER MATTERS FOR THE PAA ANNUAL MEETING
We know of no matters to be acted upon at the PAA Annual Meeting other than the proposals included in the accompanying notice and described in this proxy statement. If any other matter requiring a vote of Unitholders arises, including a question of adjourning the PAA Annual Meeting, the persons named as proxies in the proxy card will have the discretion to vote thereon according to their best judgment of what they consider to be in the best interests of PAA. The proxy card confers discretionary authority to take action with respect to any additional matters that may come before the meeting or any adjournment thereof.
DIRECTOR NOMINATIONS AND UNITHOLDER PROPOSALS FOR 2019THE 2025 ANNUAL MEETING
PAGP GP Director Nominations
Pursuant to Section 13.13 of our partnership agreement, any eligible Unitholder who owns common units or Series A preferred units equal in number to 10% or more of the outstanding Class A, Class B and Class C shares of PAGP, taken together as a single class, is entitled to direct our general partner to cause us to nominate one person for election as a PAGP Eligible Director in accordance with Section 13.4(c)(ii) of PAGP'sPAGP’s partnership agreement. Eligible Unitholders who wish to submit a director nomination for our 20192025 annual meeting must deliver written notice thereof to our principal executive offices in care of the Corporate Secretary by mail to 333 Clay Street, Suite 1600, Houston, Texas 77002 no later than the close of business on February 14, 2019,21, 2025, nor earlier than the close of business on January 15, 2019.22, 2025. In the event that the date of the 20192025 annual meeting is changed by more than 30 days before or more than 60 days after the one-year anniversary of the 20182024 annual meeting, Unitholder notice of a director nomination must be received no earlier than the close of business on the 120th day prior to the 20192025 annual meeting and not later than the close of business on the date that is the later of the (i) 90th day prior to the 20192025 annual meeting or (ii) if the first public announcement of the 20192025 annual meeting is less than 100 days prior to such meeting, the 10th day following the day on which public announcement of the date of the 20192025 annual meeting is first made. The written notice must comply with Section 13.13 of our partnership agreement and the procedures set forth in Section 13.4(c)(ii) of PAGP'sPAGP’s partnership agreement, including the informational requirements included in Section 13.4(c)(ii)(A)(3). We will not entertainconsider any nomination at the annual meetingPAA Annual Meeting that does not meet the requirements set forth in our partnership agreement and PAGP'sPAGP’s partnership agreement. Our partnership agreement is filed as Exhibit 3.1 to our Current Report on Form 8-K filed on October 12, 2017, and PAGP'sPAGP’s partnership agreement is filed as Exhibit 3.2 to our Current Report on Form 8-K filed on November 21, 2016.2016, as amended by Amendment No. 1, filed as Exhibit 3.1 to PAGP’s Current Report on Form 8-K filed on April 9, 2020.
In addition to satisfying the requirements under our partnership agreement and PAGP’s partnership agreement as described in the immediately preceding paragraph, to comply with the universal proxy rules under the Exchange Act, any eligible Unitholder who intends to solicit proxies in support of director nominees other than our nominees must provide written notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than March 23, 2025. However, if the date of the 2025 annual meeting is more than 30 days before or after the anniversary of the date of the 2024 annual meeting, then such written notice must be delivered by the later of (i) the 10th day following the public announcement of the date of the 2025 annual meeting is first made and (ii) the date that is 60 days prior to the date of the 2025 annual meeting.
Any Unitholder who, in accordance with Rule 14a-8 under the Exchange Act, wishes to submit a proposal for inclusion in our proxy statement for the 20192025 annual meeting must submit their proposal in writing, along with proof of eligibility, to our principal executive offices in care of the Corporate Secretary by mail toat 333 Clay Street, Suite 1600, Houston, Texas 77002. Proposal submissions must be received no later than the close of business (5:00 p.m. Central Time) on January 15, 2019,December 13, 2024 to be considered timely. SEC rules set forth standards as to what proposals are required to be included in a proxy statement for a meeting. In no event are Unitholders allowed to vote on matters that would cause the Unitholders to be deemed to take part in the management and
control of our business and affairs so as to jeopardize such Unitholder'sUnitholder’s limited liability under the Delaware limited partnership act or the law of any other state in which we are qualified to do business.
Table of Contents
HOUSEHOLDING MATTERS
In some cases, Unitholders who share a single address will receive only one annual report and one proxy statement at that address unless we have received instructions to the contrary from any Unitholder at that address. This practice, known as
"householding,"“householding,” is designed to reduce our printing and postage costs. However, if a Unitholder of record residing at such an address wishes to receive a separate copy of our annual report or proxy statement or future annual reports or proxy statements (as applicable), he or she may contact our Corporate Secretary at (713) 646-4100, or write to Plains All American Pipeline, L.P., 333 Clay Street, Suite 1600, Houston, Texas 77002, attention: Corporate Secretary. We will deliver separate copies of our annual report or proxy statement promptly upon written or oral request. If you are a Unitholder of record receiving multiple copies of our annual report or proxy statement, you can request householding by contacting us in the same manner. If you own your Units through a bank, broker or other Unitholder of record, you can request additional copies of the annual report or proxy statement or request householding by contacting the Unitholder of record (i.e., your bank or broker).
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF
PROXY MATERIALS FOR THE ANNUAL MEETINGTABLE OF UNITHOLDERS
TO BE HELD ON MAY 15, 2018
The Notice of Annual Meeting, the proxy statement for the Annual Meeting and our 2017 Annual Report are available at http://www.astproxyportal.com/ast/02337/.
CONTENTS
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ANNUAL MEETING OF UNITHOLDERS OF PLAINS ALL AMERICAN PIPELINE, L.P. May 15, 2018 L.P.22, 2024 GO GREEN e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.comhttps://equiniti.com/us/ast-access to enjoy online access. NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Annual Meeting, proxy statement and proxy card are available at http://www.astproxyportal.com/ast/02337/ Please sign, date and mail your proxy card in the envelope provided as soon as possible. Please detach along perforated line and mail in the envelope provided. 20233040000000000000 3 051518 2. Ratification of the appointment of PricewaterhouseCoopers LLP executive officer compensation. officer compensation should be held. changes to the registered name(s) on the account may not be submitted via Note: Please sign exactly as your name or names appear on this Proxy. When units are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.20330304000000000000 5052224 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES LISTED IN PROPOSAL 1, "FOR" PROPOSALS 2 AND 3, AND “1 YEAR” FOR PROPOSAL 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. The election of twothree Class III directors to serve on the Board until the 20212027 annual meeting. NOMINEES: Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. FOR AGAINST ABSTAIN FOR ALL NOMINEESO Bobby S. Shackouls O Christopher M. TempleNOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES Greg Armstrong O John Raymond O Bobby Shackouls The approval, on a non-binding advisory basis, of our 2023 named executive officer compensation. FOR AGAINST ABSTAIN FOR ALL EXCEPT (See instructions below) Non-binding advisory vote on the frequency with which future advisory votes to approve our named executive officer compensation should be held. 1 YEAR 2 YEARS 3 YEARS ABSTAIN INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN as our independent registered public accounting firm for 2018. 3. The approval, on a non-binding advisory basis, of our named 1 year 2 years 3 years ABSTAIN 4. Non-binding advisory vote on the frequency with which future advisory votes to approve our named executive In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properly executed will be voted as directed herein by the undersigned unitholder. If no direction is given, this proxy will be voted FOR ALL NOMINEES in Proposal 1, FOR Proposals 2 and 3, and 1 YEAR for Proposal 4. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that this method. Signature of Unitholder Date: Signature of UnitholderDate:
ANNUAL MEETING OF UNITHOLDERS OF PLAINS ALL AMERICAN May 15, 2018 PIPELINE, L.P. INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-718-921-8500 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EST the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. IN PERSON - You may vote your units in person by attending the Annual Meeting. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via www.astfinancial.com to enjoy online access. Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20233040000000000000 3 051518 as our independent registered public accounting firm for 2018. executive officer compensation. officer compensation should be held. changes to the registered name(s) on the account may not be submitted via this method. Signature of Unitholder Date: Signature of Unitholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When units are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
0 PLAINS ALL AMERICAN PIPELINE, L.P. Annual Meeting of Unitholders To be Held on May 22, 2024 This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints Al Swanson, Richard McGee and Ann Gullion, and each of them, with full power of substitution and power to act alone, as proxies to vote all of the common units or Series A preferred units which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Unitholders of Plains All American Pipeline, L.P., to be held on May 22, 2024 at 10:00 a.m., Central Time, and at any adjournments or postponements thereof, as follows: (Continued and to be signed on the reverse side) 1.114475
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ANNUAL MEETING OF UNITHOLDERS OF PLAINS ALL AMERICAN PIPELINE, L.P. May 22, 2024 PROXY VOTING INSTRUCTIONS INTERNET - Access “www.voteproxy.com” and follow the on-screen instructions or scan the QR code with your smartphone. Have your proxy card available when you access the web page. TELEPHONE - Call toll-free 1-800-PROXIES (1-800-776-9437) in the United States or 1-201-299-4446 from foreign countries from any touch-tone telephone and follow the instructions. Have your proxy card available when you call. Vote online/phone until 11:59 PM EDT the day before the meeting. MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible. GO GREEN - e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via https://equiniti.com/us/ast-access to enjoy online access. COMPANY NUMBER ACCOUNT NUMBER NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy card are available at http://www.astproxyportal.com/ast/02337/ Please detach along perforated line and mail in the envelope provided IF you are not voting via telephone or the Internet. 20330304000000000000 5052224 THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL NOMINEES LISTED IN PROPOSAL 1, "FOR" PROPOSALS 2 AND 3, AND “1 YEAR” FOR PROPOSAL 4. PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x 1. The election of twothree Class III directors to serve on the Board until the 20212027 annual meeting. NOMINEES: Ratification of the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2024. FOR AGAINST ABSTAIN FOR ALL NOMINEESO Bobby S. Shackouls O Christopher M. TempleNOMINEES WITHHOLD AUTHORITY FOR ALL NOMINEES O Greg Armstrong O John Raymond O Bobby Shackouls The approval, on a non-binding advisory basis, of our 2023 named executive officer compensation. FOR AGAINST ABSTAIN FOR ALL EXCEPT (See instructions below) Non-binding advisory vote on the frequency with which future advisory votes to approve our named executive officer compensation should be held. 1 YEAR 2 YEARS 3 YEARS ABSTAIN INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee you wish to withhold, as shown here: FOR AGAINST ABSTAIN 2. Ratification of the appointment of PricewaterhouseCoopers LLP 3. The approval, on a non-binding advisory basis, of our named 1 year 2 years 3 years ABSTAIN 4. Non-binding advisory vote on the frequency with which future advisory votes to approve our named executive In their discretion, the proxies are authorized to vote upon such other business as may properly come before the Annual Meeting. This proxy when properly executed will be voted as directed herein by the undersigned unitholder. If no direction is given, this proxy will be voted FOR ALL NOMINEES in Proposal 1, FOR Proposals 2 and 3, and 1 YEAR for Proposal 4. To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method. Signature of Unitholder Date: Signature of UnitholderDate: NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIAL: The Notice of Meeting, proxy statement and proxy cardUnitholder Date: Note: Please sign exactly as your name or names appear on this Proxy. When units are available at http://www.astproxyportal.com/ast/02337/ COMPANY NUMBER ACCOUNT NUMBER PROXY VOTING INSTRUCTIONS
held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.
- 0 PLAINS ALL AMERICAN PIPELINE, L.P. Annual Meeting of Unitholders To be Held on May 15, 2018 This Proxy is Solicited on Behalf of the Board of Directors The undersigned hereby appoints Al Swanson, Richard McGee and Ann Gullion, and each of them, with full power of substitution and power to act alone, as proxies to vote all of the common units or Series A preferred units which the undersigned would be entitled to vote if personally present and acting at the Annual Meeting of Unitholders of Plains All American Pipeline, L.P., to be held on May 15, 2018 at 9:00 a.m., Central Time, in the Senate Room, located on the 12th Floor of Two Allen Center, 1200 Smith Street, Houston, Texas 77002, and at any adjournments or postponements thereof, as follows: (Continued and to be signed on the reverse side.) 14475 1.1
0001070423 5 2023-01-01 2023-12-31
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