UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
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.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.
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April 14, 202312, 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 24, 202322, 2024 annual meeting.
Our integrated business model, flexible asset base and strong executiondrive to be the partner of choice allowed us to capture increasing volumes from production growth and capitalize on both commercial opportunities. As a result, we exceeded our financial guidance while also achieving record health, safety and environmental performance by meeting or exceeding 20% reduction targets in our key metrics. Overall achievements from 2022bolt-on M&A opportunities throughout the year. 2023 accomplishments include:
•
Delivered $2.51$2.71 billion in Adjusted EBITDA attributable to PAA and Implied Distributable Cash Flow per Common Unit and Common Unit Equivalent of $2.26,$2.46, exceeding our initial February targets of $2.2approximately $2.50 billion and $2.00,$2.33, respectively;
•
Generated $1.61$1.60 billion in Adjusted Free Cash Flow (excluding changes in Assets and Liabilities), returned approximately $658$989 million to our common and preferred equity holders via distributions, and unit repurchases, invested approximately $500$524 million of investment and maintenance capital repaid $774 million of total debt and achieved a year-end(net to our interest);
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Lowered our long-term leverage ratio (total debt/adjusted EBITDA)target range to 3.25x – 3.75x and ended 2023 with a leverage ratio of 3.7x approximately one year earlier than originally planned;3.1x (we also received recognition for our efforts by the credit rating agencies with two upgrades to mid-BBB);
•
Completed and/or announced several win-win strategic transactions,two asset sales and three bolt-on acquisitions, all of which further optimized our asset base and streamlined our operations;operations, while generating attractive returns for unitholders; and
•
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 meaningful multi-year free cash flow, and maintaining a balanced approach toexercising capital allocation that includes debt reduction anddiscipline, increasing returns of capital to equity holders through distribution increasesunitholders, and opportunistic repurchases.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 20232024 annual meeting in May.
Sincerely,
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Willie Chiang
Chairman of the Board & CEO
Chairman of the Board & CEO
Plains All American Pipeline, L.P.
333 Clay Street, Suite 1600
Houston, Texas 77002
Houston, Texas 77002
NOTICE OF ANNUAL MEETING OF UNITHOLDERS
To Be Held On May24, 202322, 2024
To Be Held On May
To the holders of common units and Series A Convertible Preferred units of Plains All American Pipeline, L.P.:
The 20232024 Annual Meeting (the “PAA Annual Meeting”) of the common unitholders and Series A Convertible Preferred unitholders (collectively, our “Unitholders”) of Plains All American Pipeline, L.P. (“PAA”) will be held on May 24, 2023,22, 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. At the PAA Annual Meeting, our Unitholders (excluding Plains AAP, L.P.) will consider and vote on the following matters:
1.
The election of fourthree Class IIII directors to serve on the board of directors (the “Board”) of PAA GP Holdings LLC until the 20262027 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, 2023;2024;
3.
The approval, on a non-binding advisory basis, of our 20222023 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
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 “FOR” the election of each director listed in proposal 1, “FOR” proposals 1, 2 and 3.3 and “ONE YEAR” on proposal 4. Additional information regarding these proposals is included in the attached proxy statement. Votes received on proposals 1, 2, 3 and 34 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 27, 202325, 2024 (the “Record Date”) 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, TexasTX 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 and Answers About the PAA Annual 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 for the matters to be acted upon at the PAA Annual Meeting.
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.
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.
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Richard McGee
Executive Vice President, General Counsel and Secretary
Executive Vice President, General Counsel and Secretary
Houston, Texas
April14, 202312, 2024
April
| | | IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE ANNUAL MEETING OF UNITHOLDERS TO BE HELD ON MAY | | |
| | | The Notice of Annual Meeting, the proxy statement for the Annual Meeting and our | | |
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i
PLAINS ALL AMERICAN PIPELINE, L.P.
PROXY STATEMENT
For
20232024 Annual Meeting of Unitholders To Be Held On May 24, 202322, 2024
For
GENERAL INFORMATION ABOUT THE PLAINS ALL AMERICAN PIPELINE, L.P.
ANNUAL MEETING
ANNUAL MEETING
The board of directors (the “Board”) of PAA GP Holdings LLC (“PAGP GP” or our “general partner”), the general partner of Plains GP Holdings, L.P. (“PAGP”), the sole member of Plains All American GP LLC (“GP LLC”), the general partner of Plains AAP, L.P. (“Plains AAP”), the sole member of PAA GP LLC, the general partner of Plains All American Pipeline, L.P. (“PAA”), is soliciting proxies to be voted on behalf of holders of our common units and holders of our Series A Convertible Preferred Units (“Series A preferred units”) (holders of our common units and our Series A preferred units are collectively referred to as our “Unitholders”) at the 20232024 annual meeting of Unitholders (the “PAA Annual 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 24, 2023,22, 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. References to “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, 20222023 (our “2022“2023 Annual Report”), are being mailed to Unitholders beginning on or about April 14, 2023.12, 2024.
We will furnish additional copies of our 20222023 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 20222023 Annual Report to the Investor Relations Department, Plains All American, 333 Clay Street, Suite 1600, Houston, Texas 77002, or email your request to plainsIR@paalp.com.plainsIR@plains.com.
INFORMATION ABOUT THE PAGP AND PAA ANNUAL MEETINGS
PAGP will hold 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, PAGP shareholders will be asked to approveconsider and vote upon proposals 1, 2, 3 and 34 described below. Each PAGP shareholder will be entitled to one vote for each Class A, Class B and Class C share owned for Proposals 1, 2, 3 and 3.4. On March 27, 2023, 194,407,64225, 2024, 197,252,259 Class A shares, 46,594,78635,401,669 Class B shares and 528,478,046539,507,571 Class C shares were issued and outstanding. PAA owns all of the issued and outstanding Class C 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 34 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 3.4.
See pages 9-11 for additional information with respect to our ownership and voting structure.
1
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 27, 2023,25, 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. If you are unable to attend the PAA Annual Meeting in person, youYou 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 Willie Chiang, Ellen DeSanctis, Alexandra PrunerGreg Armstrong, John Raymond and Lawrence ZiembaBobby Shackouls as a Class IIII director of the Board to serve until the 20262027 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, 2023; and2024;
•
FOR the approval, on a non-binding advisory basis, of our 20222023 named executive officer compensation.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 24, 2023,22, 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 27, 202325, 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 American Stock Transfer &Equiniti Trust Company, LLC (“AST”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 27, 2023,25, 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, AST,EQ, at the close of business on March 27, 2023.25, 2024. As a Unitholder of record, you may vote and ask questions during the PAA
2
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 27, 2023,25, 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 ASTEQ 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@astfinancial.comproxy@equiniti.com or to facsimile number 718-765-8730. Written requests can be mailed to:
Attn: Proxy Tabulation Department
Requests for registration must be labeled as “Legal Proxy” and be received no later than 5:00 p.m., Eastern Time, on May 17, 2023.15, 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:
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 27, 2023, 698,390,00625, 2024, 701,071,031 common units and 71,090,468 Series A preferred units were issued and outstanding. As of March 27, 2023,25, 2024, Plains AAP owned 241,002,428232,653,928 common units, and,units; however, as noted above, itPlains AAP is not entitled to vote such common units on proposals 1, 2, 3 or 3.4. The following table provides the number of common units entitled to vote on each proposal:
3
| | Proposal | | | Common Units Entitled to Vote (including Series A Preferred Units on an as-converted basis) | | | Explanation | |
| | Proposals 1, 2, 3 and | | | | | 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 | |
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 23, 2023,21, 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
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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 23, 2023)21, 2024);
•
delivering a later-dated, executed proxy card or written notice of revocation of your proxy to American Stock Transfer &Equiniti Trust Company, LLC, 6201 15th Avenue, Brooklyn, New York 11219 on or prior to the close of business55 Challenger Road, Suite 200B, Ridgefield Park, NJ 07660 no later than 5:00 p.m. Eastern Time on May 23, 2023;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) and, the advisory vote to approve our 20222023 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 as votes either “FOR” or “AGAINST”with respect to Proposals 1, 3 and 3.4.
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.
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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 (other than Plains AAP) will be casting a “pass-through” vote on Proposals 1, 2, 3 and 34 by instructing PAA how to vote its PAGP Class C shares on such proposals at PAGP’s annual meeting. PAA will vote (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 will be voted upon and the required vote for approval of such proposals is set forth in the following table:
| | Proposal | | | Voting Options | | | Vote Required for Approval of Proposal at the | | ||||
| | 1. The election of | | | You may vote “FOR”, or you may “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 present and entitled 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. | | ||||
| | 2. The ratification of the appointment of PricewaterhouseCoopers LLP as PAGP’s and PAA’s independent registered public accounting firm for the fiscal year ending December 31, | | | You may vote “FOR” or “AGAINST” the proposal, or you may “ABSTAIN” from voting. | | | 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” this proposal. We do not expect there to be any broker non-votes | | ||||
| | 3. The approval, on a non-binding advisory basis, of our | | | You may vote “FOR” or “AGAINST” the proposal, or you may “ABSTAIN” from voting. | | | 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” this proposal. Broker non-votes are not considered votes cast and will have no effect on the outcome of this proposal. | |
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| | Proposal | | | Voting Options | | | Vote Required for Approval of Proposal at the PAGP Annual Meeting | |
| | 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”, “TWO YEARS” or “THREE YEARS”, or you may “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” any alternative of a one, two or three year frequency. | |
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’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 $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 voting choice, your units will be voted in accordance with the Board’s recommendation for each proposal with respect to which a voting choice is not indicated.
Q:
Who will tabulate and certify the vote?
A:
7
CORPORATE GOVERNANCE AND RELATED MATTERS
Summary of Recent Changes
Investors have voiced a preference for certain governance practices, and over the course of the last several years,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 are 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;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 subject to public election by adding the three directors who are current or former members of management;
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•
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 (the “Simplification Transaction”),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 Plains 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 and 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. In 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 began 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 both 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
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•
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 creating a mechanism through which PAA equity holders (other than Plains AAP) can participate in the election of directors of 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 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) | | | | | | | | | | | | ||
| | | PAGP Class B Shares | | | | | | | | | | | | ||
| | | PAGP Class C Shares | | | | | | | | | | | | | |
| | | • On Behalf of PAA Common Unitholders (excluding Plains AAP) (Nasdaq: PAA) | | | | | | | | | | | | ||
| | | • On Behalf of PAA Series A Preferred Unitholders | | | | | | 9.2% | | | | | 71.1 million | | |
| | | TOTAL | | | | | | 100.0% | | | | | | | |
The following chart further illustrates our ownership structure as of the Record Date:
![[MISSING IMAGE: fc_ownership-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/fc_ownership-pn.jpg)
![[MISSING IMAGE: fc_ownership-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/fc_ownership-pn.jpg)
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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 voting 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, 20222023 and other publicly available information; the table below does not take 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 | | | | 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 | | | | | | 1,029 | | | | | | | — | | | | | | | 55,337 | | | | | | | — | | | | | | | 56,366 | | | | | | | 7.3% | | | | | ALPS Advisors | | | | | | 783 | | | | | | | — | | | | | | | 60,732 | | | | | | | — | | | | | | | 61,515 | | | | | | | 8.0% | | | |
| | | EMG Investments/John Raymond | | | | | | 257 | | | | | | | 11,459 | | | | | | | 1,603 | | | | | | | 20,376 | | | | | | | 33,695 | | | | | | | 4.3% | | | | | EMG Investments/John Raymond | | | | | | 273 | | | | | | | 11,459 | | | | | | | 1,603 | | | | | | | 20,376 | | | | | | | 33,710 | | | | | | | 4.4% | | | |
| | | Tortoise Capital Advisors | | | | | | 12,781 | | | | | | | — | | | | | | | 19,667 | | | | | | | — | | | | | | | 32,448 | | | | | | | 4.2% | | | | | Invesco Advisors | | | | | | 3,135 | | | | | | | — | | | | | | | 29,916 | | | | | | | — | | | | | | | 33,052 | | | | | | | 4.3% | | | |
| | | Kayne Anderson Capital Advisors | | | | | | 4,378 | | | | | | | 13,965 | | | | | | | 9,984 | | | | | | | 1,358 | | | | | | | 29,685 | | | | | | | 3.9% | | | | | Tortoise Capital Advisors | | | | | | 11,538 | | | | | | | — | | | | | | | 18,351 | | | | | | | — | | | | | | | 29,889 | | | | | | | 3.9% | | | |
| | | Invesco Advisors | | | | | | 1,921 | | | | | | | — | | | | | | | 26,797 | | | | | | | — | | | | | | | 28,718 | | | | | | | 3.7% | | | | | Harvest Fund Advisors | | | | | | 2,810 | | | | | | | — | | | | | | | 23,220 | | | | | | | — | | | | | | | 26,030 | | | | | | | 3.4% | | | |
| | | EnCap | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 25,357 | | | | | | | 25,357 | | | | | | | 3.3% | | | | | EnCap | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 25,357 | | | | | | | 25,357 | | | | | | | 3.3% | | | |
| | | Goldman Sachs Asset Management | | | | | | 9,120 | | | | | | | — | | | | | | | 13,605 | | | | | | | — | | | | | | | 22,725 | | | | | | | 3.0% | | | | | Goldman Sachs Asset Management | | | | | | 6,547 | | | | | | | — | | | | | | | 15,941 | | | | | | | — | | | | | | | 22,487 | | | | | | | 2.9% | | | |
| | | ClearBridge Investments | | | | | | 8,211 | | | | | | | — | | | | | | | 6,838 | | | | | | | — | | | | | | | 15,049 | | | | | | | 2.0% | | | | | Energy Income Partners | | | | | | 11,312 | | | | | | | — | | | | | | | 4,385 | | | | | | | — | | | | | | | 15,697 | | | | | | | 2.0% | | | |
| | | Energy Income Partners | | | | | | 10,874 | | | | | | | — | | | | | | | 3,005 | | | | | | | — | | | | | | | 13,879 | | | | | | | 1.8% | | | | | ClearBridge Investments | | | | | | 8,332 | | | | | | | — | | | | | | | 6,704 | | | | | | | — | | | | | | | 15,036 | | | | | | | 2.0% | | | |
| | | MFS Investment Management | | | | | | 13,007 | | | | | | | — | | | | | | | 78 | | | | | | | — | | | | | | | 13,085 | | | | | | | 1.7% | | | | | Mirae Asset Global Investments | | | | | | 1,369 | | | | | | | — | | | | | | | 12,908 | | | | | | | — | | | | | | | 14,277 | | | | | | | 1.8% | | | |
See “Security Ownership of Certain Beneficial Owners and Management” beginning on page 6560 for additional information regarding beneficial ownership of our securities, including ownership by our Directors and executive officers.
Board Leadership
Mr. Chiang serves as Chairman of the 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 Board Chair and CEO; rather the Board believes it is in the best interests of PAA and PAGP for the Board to review ongoing conditions and circumstances and make an appropriate determination to separate, or maintain as combined, the CEO 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 Lead Director to make sure the Board is receiving the information it needs and has the opportunity to provide feedback and input to management, in each case as required for the Board to discharge its oversight role.
Board Role in Risk Oversight
With respect to the management of enterprise-level risk (ELR)(“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, the Board has delegated primary responsibility to management while retaining oversight 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 and provides updates on other areas of potential risk on at least a quarterly basis.
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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 Shareholder Communications
Non-management directors meet in executive session in connection with each regular Board meeting. These sessions are presided over by the Lead Director. As circumstances warrant, non-management directors may also meet in executive sessions of special meetings of the Board.
Interested Unitholders can communicate 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. Commercial solicitations or communications will be disregarded.
Independence Determinations
Because we are a limited partnership, the listing standards of Nasdaq 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 have a majority of directors who are independent as defined in applicable Nasdaq and SEC rules. To be considered independent under Nasdaq listing standards, our Board must determine that a director has no relationship with us that would interfere with the exercise of independent judgementjudgment in carrying out his or her responsibilities as a director. The applicable Nasdaq and SEC rules specify the criteria by which the independence of directors must 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. 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 Committee is available on our website. See “— Meetings and Other Information” for information on how to access or obtain copies of this charter. The Board has determined that each member of our Audit Committee (Messrs. Burk (chair) and Ziemba, Ms. DeSanctis and Ms. Pruner) is (i) independent under applicable Nasdaq and SEC rules, and (ii) financially literate. The Board has also determined that each of Mr. Burk and Ms. Pruner qualifies as an Audit Committee Financial Expert as that term is defined in Item 407 of Regulation S-K.
Compensation Committee; Compensation Committee Interlocks and Insider Participation
Although not required by Nasdaq listing standards, we have a Compensation Committee that reviews and makes recommendations to the Board regarding the compensation for our executive officers and administers our long-term equity incentive plans for officers and key employees. The Compensation Committee has delegated limited authority to the CEO to administer our long-term incentive plans with respect to employees and 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
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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 compensation program and practices.
During 2022,2023, none of the members of the Compensation 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’s board of directors. In addition, none of the members of the Compensation 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 Investments 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. Raymond’s or Mr. Petersen’s independence. See “Certain Relationships and Related Transactions.”
Governance Committee
Although not required by Nasdaq listing standards, we also have a Governance Committee that periodically reviews our governance structure, policies and principles, oversees the Board’s annual self-assessment and committee and individual director evaluation process,processes, and assists with succession planning and other governance-related activities, including identifying and assessing director nominees. See “Proposal 1 — Election of Class IIII Directors — Director and Nominee Experience and Qualifications” for additional information regarding activities of our Governance Committee. The charter of our Governance Committee is available on our website. See “— Meetings and Other Information” for information on how to access or obtain copies of this charter. The Governance Committee currently consists of Messrs. Shackouls (chair), McCarthy and Petersen and Ms. Pruner. Under applicable Nasdaq rules, none of the members of our Governance Committee are required to be independent; 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 assist the Board in its evaluation and oversight of our (i) management of HSES matters, including compliance with applicable laws and regulations; (ii) management of systems and plans to protect the health and safety of employees, contractors, customers, the environment, 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 has determined that all of the current members of the HSES Committee are independent under applicable Nasdaq and SEC standards.
Meetings and Other Information
During 2022,2023, our Board had sixfour meetings, our Audit Committee had tennine meetings, our Compensation Committee had two meetings, our Governance Committee had one meeting and our HSES Committee had sixfive 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 members of management, and a substantial amount of information transfer and informal communication occurs between meetings. In 2022,2023, all of our directors attended all meetings of the Board and applicable committees of the Board on which the director served, other than two directors who each missed one Board meeting, and another director who missed one committee meeting.
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Board members are encouraged, but not required, to attend our annual meetings; fiveeight Board members attended our annual meeting in 2022.2023.
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 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 or in an 8-K filing. We regularly post important information on 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. See “Certain Relationships and Related 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.
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PROPOSAL 1 — ELECTION OF CLASS IIII DIRECTORS
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF EACH OF WILLIE CHIANG, ELLEN DESANCTIS, ALEXANDRA PRUNERGREG ARMSTRONG, JOHN RAYMOND AND LAWRENCE ZIEMBABOBBY SHACKOULS TO SERVE AS A CLASS IIII DIRECTOR ON OUR GENERAL PARTNER’S BOARD OF DIRECTORS UNTIL THE 20262027 ANNUAL MEETING.
Board Structure
General Overview and Board Makeup. Our Board has responsibility for managing the 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 Chair are held by the same person, the Board has designated one of our independent 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 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 20242025 Annual Meeting” on page 78.74.
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 standing 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); to our knowledge, no holder of our common units met the required ownership threshold and thus noother nominations were received from holders of our common units.received.
| | | | | | | Independent | | | | Audit Committee | | | | Compensation Committee | | | | Governance Committee | | | | HSES Committee | | | | Board Chair | | | | Lead Director | | |
| | | Class I Directors (Term expires | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Willie Chiang, Chairman of the Board and | | | | ![[MISSING IMAGE: ic_box-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_box-bw.jpg) ![[MISSING IMAGE: ic_box-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_box-bw.jpg) | | | | | | | | | | | | | | | | | | | | ![[MISSING IMAGE: ic_whitedia-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_whitedia-bw.jpg) ![[MISSING IMAGE: ic_whitedia-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_whitedia-bw.jpg) | | | | | | |
| | | Ellen | | | | ![[MISSING IMAGE: ic_tickbox-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_tickbox-bw.jpg) ![[MISSING IMAGE: ic_tickbox-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_tickbox-bw.jpg) | | | | ![[MISSING IMAGE: ic_whitestar-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_whitestar-bw.jpg) ![[MISSING IMAGE: ic_whitestar-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_whitestar-bw.jpg) | | | | | | | | | | | | | | | | | | | | | | |
| | | Alexandra D. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Lawrence M. | | | | | | | | | | | | | | | | | | | | ![[MISSING IMAGE: ic_blackstar-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_blackstar-bw.jpg) ![[MISSING IMAGE: ic_blackstar-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_blackstar-bw.jpg) | | | | | | | | | | |
| | | Class II Directors (Term expires 2025) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Victor Burk | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Kevin S. McCarthy | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Harry N. Pefanis, President | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Gary R. Petersen | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
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| | | | | | | 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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||
| | | Bobby S. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ![[MISSING IMAGE: ic_blackdia-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_blackdia-bw.jpg) ![[MISSING IMAGE: ic_blackdia-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_blackdia-bw.jpg) | | | |||||||||||
| | | Christopher M. Temple (Not standing for re-election) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | * | | | Nominated by the Board for | |
| | | | | 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 any director nominations made by the Board in connection with annual director elections or in the event of 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 screening potential candidates. The Governance Committee makes its recommendations based on an assessment of the skills, experience and characteristics 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, 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 performance of every 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 in reviewing the qualifications and experience of the directors continuing in office, the Governance Committee and Board consider a variety of factors, including independence, financial literacy, personal and professional accomplishments, diversity and experience in light of the needs of the Board. For 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 the skills, experiences and characteristics of our current Board members):
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| | | • 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/ | | | | • Cybersecurity/IT | | |
| | | | | | | • |
| | | Board Diversity Matrix (As of March 27, 2023) | | | ||||||||||||||||
| | | 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 | | | | | | | ||||||||||||
Energy Evolution | | |
Director Skills Matrix
| | | | | | | Armstrong | | | | Burk | | | | Chiang | | | | DeSanctis | | | | McCarthy | | | | Pefanis | | | | Petersen | | | | Pruner | | | | Raymond | | | | Shackouls | | | | Temple | | | | Ziemba | | | ||||||||||||||||||||||||||||||||||||||||
| | | Public Company Experience | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | ||||
| | | Finance/Accounting | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | ||||
| | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | |||||
| | | Legal/Governance/ Government Relations | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | ||||
| | | Operations/Engineering/ Construction/ | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | ||||
| | | Industry Experience | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | | | | ✓ | | | | ||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | | | | ✓ | | | | | | | | | | | |||||
| | | 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 | | | | | | | ||||||||||||
ZIEMBA since 2020 |
The Board has nominated Messrs. Armstrong, Raymond and Shackouls, current Class III Directors (terms expire in 2024):directors, for election at the 2024 PAA and PAGP Annual Meetings. Mr. Temple, a current 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 removal. If any of the nominees becomes unavailable to serve as a director prior to the 2024 PAA and PAGP Annual Meetings, 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.
| | | GREG L. ARMSTRONG Not Independent PAGP/PAA Director since 1998 Former Chairman and CEO Committees: None | | | | Greg L. Armstrong, age | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Operations/Engineering/ • Industry Experience • International | | |
| | | JOHN T. RAYMOND Independent PAGP/PAA Director since 2010 Committees: Compensation (chair) | | | | John T. Raymond, age | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Operations/Engineering/ • 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 | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Operations/Engineering/ • Industry Experience • International | | |
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Other Directors (Directors with terms expiring after the 2024 PAA and PAGP Annual Meetings)
Class I Directors (terms expire in 2026):
| | | Not Independent PAGP/PAA Director | | | | | | | 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 | | |
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| | | 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 | | |
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Class II Directors (terms expire in 2025):
| | | VICTOR BURK Independent PAGP/PAA Director since 2010 Committees: Audit (chair) | | | | Victor Burk, age | | | | 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 | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Industry Experience • Private Equity | | |
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| | | HARRY N. PEFANIS Not Independent PAGP/PAA Director since 2017 President Committees: None | | | | Harry N. Pefanis, age | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Operations/Engineering/ • Industry Experience • International |
| | | |||||||||||
| | | GARY R. PETERSEN Independent PAGP/PAA Director since 2001 Committees: Compensation Governance | | | | Gary R. Petersen, age | | | | Board Qualifications: • Public Company Experience • Finance/Accounting • Business Development/ Strategy/Commercial • Legal/Governance/ Government Relations • Industry Experience • Private Equity • International | | |
EXECUTIVE OFFICERS
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/ | | | | Position | | | |||
| | | Willie Chiang* | | | | | | | | | | Chairman of the Board and Chief Executive Officer | | | |
| | | Harry N. Pefanis* | | | | | | | | | | President and Director | | | |
| | | Al Swanson | | | | | | | | | | Executive Vice President and Chief Financial Officer | | | |
| | | Richard K. McGee | | | | | | | | | | Executive Vice President, General Counsel and Secretary | | | |
| | | Chris R. Chandler | | | | | | | | | | Executive Vice President and Chief Operating Officer | | | |
| | | Jeremy L. Goebel | | | | | | | | | | Executive Vice President and Chief Commercial Officer | | | |
| | | Chris Herbold | | | | | | | | | | Senior Vice President, Finance and Chief Accounting Officer | | | |
*
Biographical information for Messrs. Chiang and Pefanis is located under Proposal 1 — Election of Class IIII 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 — Legal and Business Development of PAA’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.
Chris R. Chandler has served as Executive Vice President and Chief Operating Officer of GP LLC since March 2019. He served as Senior Vice President — Strategic Planning and Acquisitions since joining Plains in May 2018 until March 2019. Mr. Chandler has more than 25 years of energy industry experience. Prior to joining Plains, he served in a number of leadership roles at Phillips 66, most recently as General Manager — Corporate Strategy, and previously as General Manager — Midstream Commercial and Business Development, as well as numerous leadership roles in refining. Mr. Chandler also serves as Executive Vice President and Chief Operating Officer of PAGP GP.
Jeremy L. Goebel has served as Executive Vice 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 from August 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, Finance and Chief Accounting Officer of PAGP GP.
EXECUTIVE COMPENSATION
Compensation Committee Report
The Compensation Committee reviews and makes recommendations to the Board regarding the compensation for our executive officers and directors. In fulfilling its oversight responsibilities, the Compensation Committee reviewed and discussed the following Compensation Discussion and Analysis (sometimes referred to as “CD&A”) with management and, based on such review and discussion, has recommended to the Board that the Compensation Discussion and Analysis be included in this proxy statement.
John T. Raymond, Chair
Gary R. Petersen
Bobby S. Shackouls
Christopher M. Temple
Gary R. Petersen
Bobby S. Shackouls
Christopher M. Temple
Compensation Discussion and Analysis
For 2022,2023, 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). Our NEOs for 20222023 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 General Philosophy and Approach
Our executive compensation philosophy emphasizes pay for performance, at both an individual and entity level, and places a significant portion of each Named Executive Officer’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:
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| | | What We Do | | | | What We Don’t Do | | |
| | | ✓ We emphasize pay for performance ✓ ✓ 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 | | | | ![[MISSING IMAGE: ic_cross-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_cross-bw.jpg) ![[MISSING IMAGE: ic_cross-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_cross-bw.jpg) 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 | | |
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 2022,2023, we reached out to 21more than 20 of our largest unaffiliated investors representing, as of December 31, 2022,2023, approximately 37%40% of our outstanding voting equity (excluding executive officers and Directors who collectively hold approximately 10% of our outstanding voting equity). Members of our executive and investor relations teams ultimately held individual meetings with 15 unaffiliated investors representing approximately 29% of our outstanding voting equity.
| | | Outreach in 2023 to outstanding equity | | |
over the need to make adjustments to our NEOs’ annual compensation elements to achieve or maintain competitive compensation levels given that such pay had not been adjusted for several years, and
Overall, the design of our 20222023 executive compensation program did not materially change relative to 2021, other than market-based adjustments to elements of NEO compensation. Investor feedback gathered during 2022 was supportive of our 2022 program and of the changes implemented in response to feedback gathered during our 2019 - 2021 investor outreach effort.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. The table below summarizes the key feedback we have received from our investors over the past several years and the changes we made to our executive compensation program in response to such feedback and related considerations:
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 2022,2023, 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
![[MISSING IMAGE: pc_compensation-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/pc_compensation-pn.jpg)
![[MISSING IMAGE: pc_compensation-pn.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/pc_compensation-pn.jpg)
*
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 performance 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 reducing our leveragemaintaining financial flexibility and generating attractive unitholder returns.
1
Earnings before interest, taxes, depreciation and amortization (including our proportionate share of depreciation and amortization, including write-downs related to canceled projects and impairments, of unconsolidated entities), gains and 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 the interests of our equity holders. We also believe that our pay-for-performance approach helps us achieve the overall objectives of our executive compensation program, which are to:
•
attract and retain individuals with the background and skills necessary to successfully execute our business model in a demanding environment;
•
pay for performance by tying more than a majority of NEO pay (58% for the CEO and 55% on average for the other NEOs) to achievement of specific near-term and long-term goals that drive long-term growth in unitholder value; and
•
directly align our NEOs with our unitholders through the use of equity incentives and encouragement of long-term unit ownership.
Compensation Elements and Objectives
We use three primary elements of compensation in combination with market competitive benefits to achieve our executive compensation program objectives — salary, annual cash incentive awards and long-term equity incentive awards. Our mix of compensation elements is designed to reinforce near-term and long-term business and strategic objectives, recognize and reward performance, motivate long-term value creation and align the interests of our executives with those of our equity holders. The following table sets forth the key elements of our 20222023 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 • 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 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 | | |
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| | | 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 | | |
With respect to our 20222023 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 line 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 include organizations that are similar to ours and that we believe we compete with for attracting and retaining executive talent. Our primary compensation benchmarking peer group for 20222023 included 11 companies across a wide range of revenues, asset values and enterprise values that are primarily engaged in the midstream business in the United States (the entities in the benchmarking peer group are listed in the table below).
Meridian utilized publicly available information to analyze compensation practices of the companies in the benchmarking peer group, including how pay is divided among long-term incentives, annual incentives and base pay and other forms of compensation.pay. Meridian also compared the amount and structure of compensation for our executive officers to the benchmarking peer group. Meridian’s benchmark study was first completed and presented to the Compensation Committee in August 2021 and subsequently discussed and reviewed byNovember 2023.
To provide a broader context to the Compensation Committee, in December 2021Meridian also provided the Committee with relevant data from six additional midstream companies, nine upstream companies (used exclusively for pay mix comparison purposes), and February 2022.
•
Total target compensation for all NEOs on average falls within the middle range of our peers; and
•
Total target compensation for the CEO ranks slightly below the median relative to peers.
For a portion (25%) of the long-term incentive awards granted to our executive officers in 2022,2023, we included relative TSR as a performance metric for the three-year performance period ending June 30, 2025.2026. The entities in our 20222023 compensation benchmarking peer group and the entities and indices in our TSR Comparator Peer Group for the 20222023 long-term incentive awards include the following:
| | | Entity/Index Name (Ticker) | | | | Benchmarking Peer Group | | | | Peer Group | | |
| | | Energy Transfer LP (ET) | | | | ![[MISSING IMAGE: ic_tick-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-23-045124/ic_tick-bw.jpg) ![[MISSING IMAGE: ic_tick-bw.gif]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_tick-bw.gif) | | | | | | |
| | | Enterprise Products Partners LP (EPD) | | | | ![[MISSING IMAGE: ic_tick-bw.jpg]](https://capedge.com/proxy/DEF 14A/0001104659-24-046387/ic_tick-bw.jpg) | | | | | | |
| | | 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) | | | | | | | | | | |
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| | | | |||||||||
| | | Equitrans Midstream Corporation (ETRN) | | | | | | | | | | |
| | | Crestwood Equity Partners LP (CEQP) | | | | | | | | | | |
| | | | | | | | | | | |||
| | | ||||||||||
| | | NuStar Energy LP (NS) | | | | | | | | | | |
| | | S&P 500 Index (SPX) | | | | | | | | | | |
| | | Alerian Midstream Energy Index (AMNA) | | | | | | | | | | |
Additional Information Regarding Compensation Practices and Processes
Set forth below is additional information regarding our compensation practices and processes as they relate to the elements of our compensation program:
Base Salary. Historically, we have not made regular annual adjustments to the base salaries of our Named Executive Officers (prior to 2022, the most recent across the board adjustments were made in 2017), but weOfficers. We have made salary adjustments periodically in connection with promotions, or the assumption of increased responsibilities. In orderresponsibilities or to enhance retention and ouraddress changes in competitive positioning relative to peers, and taking individual situations into account, basemarket data. Base salaries were increasednot adjusted in 2022.2023.
Annual Cash Incentive Awards. Annual cash 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 company performance relative to specific goals, and individual contributions. Annual company goals typically include financial, safety, environmental and other specified goals, and each 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 and are discussed and reviewed with the Board in conjunction with the review and approval of our 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.
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At the end of each year, the CEO assesses the Company’s performance relative to goals and objectives established at the beginning of the year. The CEO’s written analysis of our performance examines 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 CEO 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 to the Compensation Committee and Board for review and comment. Based on the conclusions set forth in the annual performance assessment, the CEO submits to the Compensation Committee the results of the formulaic bonus calculations, along with any recommendations for adjustments, to the Compensation Committee for all Named Executive Officers other than himself. In connection with his assessment of Company and individual performance, the CEO also considers various factors, including:
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whether or not we achieved the goals established for the year and any notable shortfalls relative to expectations;
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the level of difficulty associated with achieving such objectives based on the opportunities and challenges encountered during the year;
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current year operating and financial performance relative to both public guidance and prior year’s performance;
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significant transactions or accomplishments for the period not included in the goals for the year;
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our relative prospects at the end of the year with respect to future growth and performance; and
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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 Compensation Committee may adjust the CEO’s recommendations upward or downward in its discretion. The Compensation Committee’s recommendations are then submitted to the Board for final review and approval.
As noted above, the CEO does not make a recommendation with respect to his own bonus. The Compensation Committee assesses the CEO’s performance and contributions toward meeting the 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 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 long-term interests of the Named Executive Officers with those of our unitholders.
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NEOs are eligible to receive an annual grant of phantom units based on a formula tied to salary and PAA’s unit price. The size of the annual grant for a specified individual is based on a designated target percentage of their base salary that takes into account their expected contribution in respect of longer term performance objectives.
Annual equity grants typically require minimum service periods of three years in order to encourage long-term retention. A phantom unit grant provides the holder with the right to receive, upon the satisfaction of vesting criteria specified in the grant, a PAA common unit (or cash equivalent). We do not use options as a form of incentive 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 typically include DERs, and for awards granted in 2022,2023, DERs on the performance-based portion of such awards accrue from the grant date and will be payable only if and to the extent the underlying phantom units vest at the end of the three-year performance period. DERs on the time-based portion of such awards accrue for the first year following the grant date, with such accrued amount being paid out on the first anniversary of the grant date, and then are paid on a quarterly basis thereafter.
At the beginning of 2022,2023, we established key quantitative financial, safety and environmental objectives, along with several qualitative goals. These objectives and goals are summarized in the table below.
| | | 2022 Performance Objectives and Results (all figures rounded) | | | | 2023 Performance Objectives and Results (all figures rounded) | | | ||||||||||||||||
| | | Quantitative Goals | | | | Quantitative Goals | | | ||||||||||||||||
| | | Metrics | | | | 2022 Goals | | | | 2022 Results | | | | Metrics | | | | 2023 Goals | | | | 2023 Results | | |
| | | Adjusted EBITDA attributable to PAA(1) | | | | $2.2 billion | | | | $2.510 billion | | | | Adjusted EBITDA attributable to PAA(1) | | | | $2.50 billion | | | | $2.71 billion | | |
| | | Implied DCF per common unit and CUE(1) | | | | $2.00 | | | | $2.26 | | | | Implied DCF per common unit and CUE(1) | | | | $2.33 | | | | $2.46 | | |
| | | Safety and Environmental | | | | 20% improvement in certain safety and environmental metrics over 2020 results | | | | • ~18% reduction in recordable injuries • ~35% decrease in number of federally reportable releases | | | | 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; • Investment: maintain capital discipline by • Operations and Management: advance and complete key programs and initiatives, including | | | ||||||||
| | | (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 | | | ||||||||
Set forth below are some highlights regarding our 20222023 performance relative to our goals and objectives for the year:
•
With respect to Adjusted EBITDA attributable to PAA, we exceeded our goal by 14%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 $828$809 million (vs. our goal for the year of $678$579 million).
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We reduced our debt by $774approximately $700 million and returned approximately $658$750 million to common equity holders via distributions and unit repurchases.distributions. We exited the year with a leverage ratio of 3.7x, achieving the low end of our target range3.1x and approximately one year earlier than originally planned. We also ended the year with approximately $3.0$2.6 billion of committed liquidity.
•
In developing his annual bonus compensation recommendations, our CEO primarily considered the quantitative factors and context described above. Other factors noted by our CEO as being relevant to his assessment of our 20222023 performance included the following:
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We substantially completedenhanced our existing assets through the integrationcompletion of the legacy Oryx assets in connection with the October 2021 formation of the Plains Oryx Permian JV (“POP JV”);three bolt-on acquisitions;
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We added additional dedicated acres to the POP JV and captured additional tariff volumes vs. plan, with a meaningful increase in long-haul volumes;extended contracts;
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We announced a multi-year capital allocation framework that prioritizes the generation of Free Cash Flow, continued improvement of financial flexibility, and increasing returns of capital to equity holders;
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We signed agreements to sellcompleted the sale of our minority interest in the Keyera Ft. Sask JV (this transaction closed in February 2023);and a portion of our owned rail car fleet;
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We restructured our Empress Joint Venture, which will allow us to improve operatingcaptured efficiency improvements at our Empress straddle plants;
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We completed the convergence ofdelivered our U.S.capital program on time and Canada Operations Management System;within budget; and
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We advanced several emerging energy projects and continued to make meaningful progress on our efforts to plan for the future and continue to improve effectiveness and efficiency in a variety of areas, including employee development and succession planning, internal systems and processes, safety, integrity, environmental stewardship and sustainability.
For 2022,2023, the elements of compensation were applied as described below.
Base Salary. In February 2022, the Compensation Committee recommended, and the Board approved, increasesThere were no adjustments to the base salaries of our Named Executive Officers to maintain competitive pay levels and retain talent. These were the first base salary adjustments since 2017 (other than adjustments in connection with promotions or the assumption of increased responsibility). Following the February 2022 increases, the2023. The 2023 annual base salaries for theour 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 Incentive Awards. Annual bonus targets, expressed as a percentage of base salary,There were also adjusted in February 2022. Followingno adjustments to the February 2022 adjustments, annual bonus targets for theour Named Executive Officers in 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 20222023 cash incentive awards established at the beginning of the year were company performance (67%(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 (33%(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, while thepoints. The minimum and maximum payout levels of 0% and 200%, respectively, for safety (TRIR) and environmental (FRR)
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metrics were set at 10% improvementa range of between 0.28 (min) to 0.22 (max) for TRIR and 30% improvement, respectively, over 2020 resultsa range of between 13 (min) and 7 (max) for FRR, in both cases with linear interpolation between those points (2020 results were used as the benchmark for reductions given that 2021 results for each metric were higher than our 2020 results).points. Individual performance metric payouts were determined by the Compensation Committee based on its assessment of individual contributions towards our 20222023 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)
| | | (67% weighting) | | | Threshold | | | Target | | | Max | | | | 2022 Formulaic Payout Calculation | | |||||||||
| | | Adjusted EBITDA attributable to PAA/DCF (% Target) | | | | | 92.50% | | | | | | 100% | | | | | | 110% | | | | | ||
| | | Safety/Env Reduction vs. ‘20 (% Target) | | | | | -10% | | | | | | -20% | | | | | | -30% | | | | | ||
| | | Payout | | | | | 0% | | | | | | 100% | | | | | | 200% | | | | | ||
| | | Company Performance Metrics | | | Weight | | | Threshold | | | Target | | | Max | | | Result | | | Payout % | | | Wgtd % | | | |||||||||||||||||||||
| | | Adjusted EBITDA attributable to PAA | | | | | 40% | | | | | $ | 2,035 | | | | | $ | 2,200 | | | | | $ | 2,420 | | | | | $ | 2,510 | | | | | | 200% | | | | | | 80% | | | |
| | | Implied DCF/Common Unit and CUE | | | | | 40% | | | | | $ | 1.85 | | | | | $ | 2.00 | | | | | $ | 2.20 | | | | | $ | 2.26 | | | | | | 200% | | | | | | 80% | | | |
| | | Safety (TRIR) | | | | | 10% | | | | | | 0.34 | | | | | | 0.30 | | | | | | 0.27 | | | | | | 0.31 | | | | | | 84% | | | | | | 8.4% | | | |
| | | Environmental (DOT releases) | | | | | 10% | | | | | | 15 | | | | | | 14 | | | | | | 12 | | | | | | 11 | | | | | | 200% | | | | | | 20% | | | |
| | | Company Performance Subtotal | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 188.4% | | | |
| | | (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 33%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 2022,2023, 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 20222023 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 • Led strategic positioning for • Ongoing Board initiatives, leadership development/succession | | | | | | |
| | | Harry Pefanis | | | | • Significant role in • Leadership of long-term efficiency initiative • Mentored/developed key individuals • Strategic positioning for • Develop/maintain/enhance major commercial relationships | | | | | | |
| | | Al Swanson | | | | • Finance group leadership • • Key role in • • | | | | | | |
| | | Richard McGee | | | | • Legal/Land and HR group oversight/leadership during • • • | | | | | | |
| | | 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 • • • • • | | | | | | |
| | | Jeremy Goebel | | | | • • Led key commercial strategies that drove financial overperformance vs. plan • Solid execution enabled capture of unforecasted market opportunities • Led key • • $ • • Increased Permian dedicated acreage by • 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 | | | | | |
*
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 150%100% to 200%175%, the total formulaic bonus payout calculation for our NEOs ranged from 176%119% to 192%149%, as set forth in the table below.
| | | Named Executive Officer | | 2022 Target Bonus Amount | | | Company Results | | Individual Results | | | Percent of Target Bonus Earned | | 2022 Actual Bonus Amount(1) | | | | 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 | | | | | Company Score | | | | Weight | | | | Individual Score | | | | Weight | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Willie Chiang | | | $ | 2,000,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 163% | | | x | | | | 33% | | | = | | | | 180% | | | | $ | 3,600,000 | | | | | Willie Chiang | | | $ | 2,000,000 | | | | | 131% | | | x | | | | 60% | | | + | | | | 175% | | | x | | | | 40% | | | = | | | | 149% | | | | $ | 2,975,000 | | | | ||||||||||||||||||||||
| | | Harry Pefanis | | | $ | 1,200,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 150% | | | x | | | | 33% | | | = | | | | 176% | | | | $ | 2,105,000 | | | | | Harry Pefanis | | | $ | 1,200,000 | | | | | 131% | | | x | | | | 60% | | | + | | | | 100% | | | x | | | | 40% | | | = | | | | 119% | | | | $ | 1,425,000 | | | | ||||||||||||||||||||||
| | | Al Swanson | | | $ | 825,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 150% | | | x | | | | 33% | | | = | | | | 176% | | | | $ | 1,450,000 | | | | | Al Swanson | | | $ | 825,000 | | | | | 131% | | | x | | | | 60% | | | + | | | | 160% | | | x | | | | 40% | | | = | | | | 143% | | | | $ | 1,180,000 | | | | ||||||||||||||||||||||
| | | Richard McGee | | | $ | 825,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 175% | | | x | | | | 33% | | | = | | | | 184% | | | | $ | 1,515,000 | | | | | Richard McGee | | | $ | 825,000 | | | | | 131% | | | x | | | | 60% | | | + | | | | 160% | | | x | | | | 40% | | | = | | | | 143% | | | | $ | 1,180,000 | | | | ||||||||||||||||||||||
| | | Chris Chandler | | | $ | 900,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 200% | | | x | | | | 33% | | | = | | | | 192% | | | | $ | 1,730,000 | | | | | Chris Chandler | | | $ | 900,000 | | | | | 131% | | | x | | | | 60% | | | + | | | | 175% | | | x | | | | 40% | | | = | | | | 149% | | | | $ | 1,340,000 | | | | ||||||||||||||||||||||
| | | Jeremy Goebel | | | $ | 900,000 | | | | | 188% | | | x | | | | 67% | | | + | | | | 200% | | | x | | | | 33% | | | = | | | | 192% | | | | $ | 1,730,000 | | | | | 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 20222023 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) | | | | 2022 Annual LTIP Award Value | | | | 2022 Annual Phantom Units Granted(1) | | | | Time-Vested Phantom Units (50%) | | | | Performance- Vested Phantom Units (50%) | | | | 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 | | | | | | | 440,000 | | | | | | | 220,000 | | | | | 220,000 | | | | 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) | | | | Harry Pefanis | | | | | | 500% | | | | | | | n/a(2) | | | | | | | n/a(2) | | | | | | | n/a(2) | | | | | n/a(2) | | |
| | | Al Swanson | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 138,600 | | | | | | | 69,300 | | | | | 69,300 | | | | Al Swanson | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | 51,075 | | |
| | | Richard McGee | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 138,600 | | | | | | | 69,300 | | | | | 69,300 | | | | Richard McGee | | | | | | 275% | | | | | | $ | 1,513,000 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | 51,075 | | |
| | | Chris Chandler | | | | | | 325% | | | | | | $ | 1,950,000 | | | | | | | 178,700 | | | | | | | 89,350 | | | | | 89,350 | | | | Chris Chandler | | | | | | 325% | | | | | | $ | 1,950,000 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | 65,825 | | |
| | | Jeremy Goebel | | | | | | 325% | | | | | | $ | 1,950,000 | | | | | | | 178,700 | | | | | | | 89,350 | | | | | 89,350 | | | | 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 20222023 distribution ($10.91)14.81).
(2)
Annual LTIP grants were not awarded to Mr. Pefanis as he requested to not participate in the 20222023 long-term incentive program.
The 2022 time-vested2023 time-based phantom units will vest (become payable 1-for-1 in PAA common units) on the August 20252026 distribution date. The performance-vestedperformance-based phantom units will potentially vest on the August 20252026 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, 20252026 compared to the TSR of the TSR Comparator Peer Group identified on page 3431 (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 $7.05$7.45 over the three-year period ending June 30, 20252026 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 20252026 is greaterhigher than 3.5x)the leverage ratio that equals the upper end of our then applicable guidance range).
DERs associated with the time-vestedtime-based phantom units will accrue for the first year and such accrued amount will be paid in cash in a lump sum on the August 20232024 distribution date; beginning in November 2023,2024, DERs on such time-vestedtime-based phantom units will be paid quarterly until the associated
phantom units vest. DERs associated with the performance-vestedperformance-based phantom units will accrue during the three-year performance period and be paid in cash in a lump sum on the August 20252026 distribution date with respect to the number of such phantom units, if any, that vest on such date. See the “Grants of Plan Based Awards Table” below for additional information regarding the 20222023 annual grants.
Other Compensation Related Matters
Equity Ownership. Our Named Executive Officers and directors collectively own substantial equity interests in PAA and PAGP including unvested long-term equity awards. As of March 27, 2023,25, 2024, the Named Executive Officers beneficially owned, in the aggregate, approximately 12.012.6 million units of equity interests in PAA and/or PAGP with an approximate market value of $144$216 million, and all executive officers and directors beneficially owned, in the aggregate, approximately 80.081.0 million units of equity interests in PAA and/or PAGP with an approximate market value of $963 million.$1.4 billion.
Equity Ownership Guidelines. In November 2020, the Board adoptedWe 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 minimum equity ownership level. Under 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 other derivative securities to hedge the economic risk of their 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. InSince November 2020, the Board also adoptedwe 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 covers all executive officerswas 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:
•
•
Detrimental conduct that results in significant financial, reputational or other harm to the Company (Company may seek recovery or forfeiture of any performance-based compensation or unvested time-based equity awards granted or paid during the 3-year period prior to discovery of the misconduct).
39
Change in Control Triggers. Our long-term incentive plan grants provide for accelerated vesting upon a change of control (as defined in such agreements), but such vesting becomes operative only if the change in control is accompanied by a “change in status” (which includes the termination of employment by GP LLC without cause and certain other circumstances involving a voluntary separation or retirement). We believe this “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. In addition, the provisions in Mr. Pefanis’ legacy employment agreement provide for a severance payment if he terminates employment within three months following a change in control. Mr. Pefanis agreed to a conditional waiver of these provisions with respect to all prior qualifying transactions. See “— Potential Payments Upon Termination or Change-in-Control.” The provision of severance or equity acceleration for certain terminations and change of control transactions 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 could 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 targeted performance thresholds. For us, such risks would primarily attach to certain commercial merchant activities as well as to the execution of investment capital projects and acquisitions and the realization of associated returns.
From a risk management perspective, our policy is to conduct our commercial activities within pre- definedpre-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 investment 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 long-term incentive awards are typically based on the passage of time and performance thresholds associated with achieving specified long-term financial goals. Also, the fact that we utilize a variety of metrics in connection with our incentive arrangements (both short and long term), including a leverage modifier in the case of our long-term incentive plan grants, provides a structural mitigant against excessive risk taking to achieve performance targets.
In combination with our risk-management practices and the processes employed by the Compensation Committee and the Board, we believe 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 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 Named Executive Officers. As a result of his request to not participate in the 20222023 long-term incentive program, Mr. Pefanis is not one of our three most highly compensated executive officers for 2022,2023, but he has been included as a Named Executive Officer given the significance of his role as President of Plains.
| | | Name and Current Principal Position | | | | Year | | | | Salary ($)(1) | | | | Stock Awards ($)(2) | | | | Non-Equity Incentive Plan Compensation ($) | | | | All Other Compensation ($)(3) | | | | Total ($) | | | | Name and Current Principal Position | | | | Year | | | | Salary ($) | | | | Stock Awards ($)(1) | | | | Non-Equity Incentive Plan Compensation ($)(2) | | | | All Other Compensation ($)(3) | | | | Total ($) | | | ||||||||||||||||||||||||||||||||||||
| | | Willie Chiang | | | | | | 2022 | | | | | | | 750,000 | | | | | | | 3,927,000 | | | | | | | 3,600,000 | | | | | | | 19,140 | | | | | | | 8,296,140 | | | | | Willie Chiang | | | | | | 2023 | | | | | | | 800,000 | | | | | | | 3,658,279 | | | | | | | 2,975,000 | | | | | | | 20,640 | | | | | | | 7,453,919 | | | |
| | | Chairman and Chief Executive | | | | | | 2021 | | | | | | | 600,000 | | | | | | | 2,053,850 | | | | | | | 1,720,000 | | | | | | | 18,360 | | | | | | | 4,392,210 | | | | | Chairman and Chief Executive Officer | | | | | | 2022 | | | | | | | 750,000 | | | | | | | 3,927,000 | | | | | | | 3,600,000 | | | | | | | 19,140 | | | | | | | 8,296,140 | | | |
| | | Officer | | | | | | 2020 | | | | | | | 600,000 | | | | | | | 2,247,181 | | | | | | | 1,425,000 | | | | | | | 18,060 | | | | | | | 4,290,241 | | | | | | | 2021 | | | | | | | 600,000 | | | | | | | 2,053,850 | | | | | | | 1,720,000 | | | | | | | 18,360 | | | | | | | 4,392,210 | | | | | |||
| | | Harry Pefanis | | | | | | 2022 | | | | | | | 550,000 | | | | | | | — | | | | | | | 2,105,000 | | | | | | | 19,140 | | | | | | | 2,674,140 | | | | | Harry Pefanis | | | | | | 2023 | | | | | | | 600,000 | | | | | | | — | | | | | | | 1,425,000 | | | | | | | 20,640 | | | | | | | 2,045,640 | | | |
| | | President | | | | | | 2021 | | | | | | | 400,000 | | | | | | | — | | | | | | | 1,150,000 | | | | | | | 18,360 | | | | | | | 1,568,360 | | | | | President | | | | | | 2022 | | | | | | | 550,000 | | | | | | | — | | | | | | | 2,105,000 | | | | | | | 19,140 | | | | | | | 2,674,140 | | | |
| | | | | | | | | 2020 | | | | | | | 400,000 | | | | | | | — | | | | | | | 950,000 | | | | | | | 18,060 | | | | | | | 1,368,060 | | | | | | | 2021 | | | | | | | 400,000 | | | | | | | — | | | | | | | 1,150,000 | | | | | | | 18,360 | | | | | | | 1,568,360 | | | | | |||
| | | Al Swanson | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,450,000 | | | | | | | 19,140 | | | | | | | 3,218,645 | | | | | Al Swanson | | | | | | 2023 | | | | | | | 550,000 | | | | | | | 1,153,018 | | | | | | | 1,180,000 | | | | | | | 20,640 | | | | | | | 2,903,658 | | | |
| | | Executive Vice President and | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 980,000 | | | | | | | 18,360 | | | | | | | 2,219,627 | | | | | Executive Vice President and Chief Financial Officer | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,450,000 | | | | | | | 19,140 | | | | | | | 3,218,645 | | | |
| | | Chief Financial Officer | | | | | | 2020 | | | | | | | 400,000 | | | | | | | 898,896 | | | | | | | 775,000 | | | | | | | 18,060 | | | | | | | 2,091,956 | | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 980,000 | | | | | | | 18,360 | | | | | | | 2,219,627 | | | | | |||
| | | Richard McGee | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,515,000 | | | | | | | 19,140 | | | | | | | 3,283,645 | | | | | Richard McGee | | | | | | 2023 | | | | | | | 550,000 | | | | | | | 1,153,018 | | | | | | | 1,180,000 | | | | | | | 20,640 | | | | | | | 2,903,658 | | | |
| | | Executive Vice President, | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,050,000 | | | | | | | 18,360 | | | | | | | 2,289,627 | | | | | Executive Vice President, General Counsel and Secretary | | | | | | 2022 | | | | | | | 512,500 | | | | | | | 1,237,005 | | | | | | | 1,515,000 | | | | | | | 19,140 | | | | | | | 3,283,645 | | | |
| | | General Counsel and Secretary | | | | | | 2020 | | | | | | | 400,000 | | | | | | | 898,896 | | | | | | | 775,000 | | | | | | | 18,060 | | | | | | | 2,091,956 | | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,050,000 | | | | | | | 18,360 | | | | | | | 2,289,627 | | | | | |||
| | | Chris Chandler | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | | | Chris Chandler | | | | | | 2023 | | | | | | | 600,000 | | | | | | | 1,485,999 | | | | | | | 1,340,000 | | | | | | | 20,640 | | | | | | | 3,446,639 | | | |
| | | Executive Vice President and | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,010,000 | | | | | | | 18,360 | | | | | | | 2,249,627 | | | | | Executive Vice President and Chief Operating Officer | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | |
| | | Chief Operating Officer | | | | | | 2020 | | | | | | | 400,000 | | | | | | | 898,896 | | | | | | | 800,000 | | | | | | | 18,060 | | | | | | | 2,116,956 | | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,010,000 | | | | | | | 18,360 | | | | | | | 2,249,627 | | | | | |||
| | | Jeremy Goebel | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | | | Jeremy Goebel | | | | | | 2023 | | | | | | | 600,000 | | | | | | | 1,485,999 | | | | | | | 1,340,000 | | | | | | | 20,640 | | | | | | | 3,446,639 | | | |
| | | Executive Vice President and | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,170,000 | | | | | | | 18,360 | | | | | | | 2,409,627 | | | | | Executive Vice President and Chief Commercial Officer | | | | | | 2022 | | | | | | | 550,000 | | | | | | | 4,081,569 | | | | | | | 1,730,000 | | | | | | | 19,140 | | | | | | | 6,380,709 | | | |
| | | Chief Commercial Officer | | | | | | 2020 | | | | | | | 400,000 | | | | | | | 898,896 | | | | | | | 800,000 | | | | | | | 18,060 | | | | | | | 2,116,956 | | | | | | | 2021 | | | | | | | 400,000 | | | | | | | 821,267 | | | | | | | 1,170,000 | | | | | | | 18,360 | | | | | | | 2,409,627 | | | | ||||
(1)
Grant date fair values are presented for (i) phantom unit grants awarded to Messrs. Chiang, Swanson, McGee, Chandler and Goebel in August 2020, 2021, 2022 and 2022,2023, and (ii) a portion of phantom unit grants awarded to Messrs. Chandler and Goebel in November 2019, which were amended in February 2022. Dollar amounts in the table represent the aggregate fair value of phantom units awarded based on the probable outcome of underlying performance conditions pursuant to FASB ASC Topic 718. See Note 1817 to our Consolidated Financial Statements included in our 20222023 Annual Report for further discussion regarding the calculation of grant date fair values.
For phantom unit grants awarded to Messrs. Chandler and Goebel in November 2019, 50% were deemed probable of vesting on the grant date. The probability-based fair value of the phantom unit grants awarded in November 2019 was $3,901,500; the maximum fair value of phantom unit grants awarded in November 2019, assuming that the highest level of performance conditions will
be met, was $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
41
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 phantom unit grants awarded in August 2021, 75% were deemed probable of vesting on the grant date. The maximum fair value of phantom unit grants awarded in August 2021, assuming that the highest level of performance conditions will be met, was $2,738,466 for Mr. Chiang and $1,095,022 for each of Messrs. Swanson, McGee, Chandler and Goebel.
For phantom unit grants awarded in August 2022, 75% were deemed probable of vesting on the grant date. The maximum fair value of phantom unit grants awarded in August 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 last several years, despite being eligible for equity awards, has requested to not participate in the long-term incentive program.
(2)
Amounts in this column for 2023 were rounded up to the nearest $5,000. See “2023 Compensation Elements — Annual Cash Incentive Awards” above for additional information.
(3)
GP LLC matches 100% of employees’ contributions to its 401(k) plan in cash, subject to certain limitations in the plan. All Other Compensation for 20222023 includes $18,300$19,800 in matching contributions for each of the Named Executive Officers. The remaining amount represents premium payments on behalf of such Named Executive Officer for group term life insurance.
Grants of Plan-Based Awards Table
The following table sets forth summary information regarding all grants of plan-based awards made to our Named Executive Officers during the fiscal year ended December 31, 2022:2023:
| | | Name | | | | Grant Date | | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | | Estimated Future Payouts Under Equity Incentive Plan Awards(1) | | | | All Other Stock Awards: Number Of Shares Of Stock or Units (#)(2) | | | | Grant Date Fair Value Of Stock and Option Awards ($)(3) | | | | 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 (#) | | | | Threshold ($) | | | | Target ($) | | | | Maximum ($) | | | | Threshold (#) | | | | Target (#) | | | | Maximum (#) | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | Willie Chiang | | | | | | 2/24/22 | | | | | | | — | | | | | | | 2,000,000 | | | | | | | 4,000,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | Willie Chiang | | | | | | 2/16/23 | | | | | | | — | | | | | | | 2,000,000 | | | | | | | 4,000,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/18/22 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 220,000 | | | | | | | 440,000 | | | | | | | 220,000 | | | | | | | 3,927,000 | | | | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 162,050 | | | | | | | 324,100 | | | | | | | 162,050 | | | | | | | 3,658,279 | | | | |
| | | Harry Pefanis | | | | | | 2/24/22 | | | | | | | — | | | | | | | 1,200,000 | | | | | | | 2,400,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | Harry Pefanis | | | | | | 2/16/23 | | | | | | | — | | | | | | | 1,200,000 | | | | | | | 2,400,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | |
| | | Al Swanson | | | | | | 2/24/22 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | Al Swanson | | | | | | 2/16/23 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/18/22 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 69,300 | | | | | | | 138,600 | | | | | | | 69,300 | | | | | | | 1,237,005 | | | | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 51,075 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | | | 1,153,018 | | | | |
| | | Richard McGee | | | | | | 2/24/22 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | Richard McGee | | | | | | 2/16/23 | | | | | | | — | | | | | | | 825,000 | | | | | | | 1,650,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 8/18/22 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 69,300 | | | | | | | 138,600 | | | | | | | 69,300 | | | | | | | 1,237,005 | | | | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 51,075 | | | | | | | 102,150 | | | | | | | 51,075 | | | | | | | 1,153,018 | | | | |
| | | Chris Chandler | | | | | | 2/24/22 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | Chris Chandler | | | | | | 2/16/23 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | | | | | | | 2/24/22(4) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,486,671(5) | | | | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,825 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | | | 1,485,999 | | | |
| | | | | | | | | 8/18/22 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 89,350 | | | | | | | 178,700 | | | | | | | 89,350 | | | | | | | 1,594,898 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Jeremy Goebel | | | | | | 2/16/23 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | |
| | | Jeremy Goebel | | | | | | 2/24/22 | | | | | | | — | | | | | | | 900,000 | | | | | | | 1,800,000 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | | | | | 8/17/23 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 65,825 | | | | | | | 131,650 | | | | | | | 65,825 | | | | | | | 1,485,999 | | | |
| | | | | | | | | 2/24/22(4) | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 2,486,671(5) | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | | | | | | | | 8/18/22 | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | — | | | | | | | 89,350 | | | | | | | 178,700 | | | | | | | 89,350 | | | | | | | 1,594,898 | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1)
Represents the performance-vested portion ofperformance-based phantom units granted in August 2022.2023. These phantom units will potentially vest on the August 20252026 distribution date at a scaled payout range of between 0% and 200% based on: (i) with respect to 50% of the performance-vestedperformance-based award, PAA’s TSR over the three-year period ending June 30, 2025 compared2026 relative to the TSR of the TSR Comparator Peer Group described on page 3431 (payout may be reduced if absolute TSR is negative); and (ii) with respect to the other 50% of the performance-vestedperformance-based award, PAA achieving cumulative DCF per CUE of $7.05$7.45 over the three-year period ending June 30, 20252026 (payout may be decreased by 25 basis points if PAA’s leverage ratio as of June 30, 20252026 is greater than 3.5x)the upper end of our guidance range). DERs associated with the performance-vested portionthese performance-based awards will accrue during the three-year performance period and be paid in cash in a lump sum on the August 20252026 distribution date with respect to the number of such phantom units, if any, that vest on such date.
(2)
Represents the time-vested portion oftime-based phantom units granted in August 2022.2023. These phantom units will vest on the August 20252026 distribution date. DERs associated with the time-vested portionthese 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 20232024 distribution date; beginning in November 2023,2024, DERs on such time-vestedtime-based portion will be paid quarterly until the associated phantom units vest.
(3)
Represents the aggregate grant date fair values of phantom units granted in August 20222023 based on the probable outcome of underlying performance conditions pursuant to FASB ASC Topic 718. For phantom unit grants awarded in August 2022,2023, 75% were deemed probable of vesting on the grant date. The maximum fair value of phantom unit grants awarded in August 2022,2023, assuming that the highest level of performance conditions will be met, was $7,854,000$4,877,705 for Mr. Chiang, $2,474,010$1,537,358 for each of Messrs. Swanson and McGee, and $3,189,795$1,981,333 for each of Messrs. Chandler and Goebel.
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