EnLink believes in rewarding employees and officers for strong execution that drives business results.
Linking Executive Pay to Performance
The compensation of our executives is determined and approved by our Governance and Compensation Committee, which includes independent directors, and the overall EnLink Board of Directors (Board). This determination includes an analysis of:
- The compensation practices of other companies in our industry;
- The competitive market for executive talent;
- The evolving demands of the business;
- The specific challenges that we may face; and
- Individual and group contributions made by our executives to EnLink
Overall, compensation is targeted at the market median (50th percentile) for each executive role. Our executive compensation program is grounded in a pay-for-performance philosophy. Variable compensation in the form of short- and long-term incentives directly tied to the performance of the company constitutes roughly 80% of the total compensation paid to our leadership team.
EnLink’s long-term incentives, issued in the form of company units, comprise 60% of our executive’s total compensation, all of which is on a three-year cliff vesting schedule. Moreover, long-term incentives are typically awarded as 50% time-based awards and 50% performance-based stock awards. Performance-based awards granted in 2020 were measured on two key variables: EnLink’s achievement of unit price performance (total shareholder return) relative to a defined peer group approved by the Board and defined cash flow goals.
Long-term incentives to our executive officers foster a strong culture of ownership, aligning the interests of our leaders with those of our unitholders. Based on the beneficial ownership table of our most recent Annual Report on Form 10-K, our executive leadership team¹ on average held 6.7 times their base salary in EnLink common units, exceeding both market best practice and minimum ISS governance guidelines² of 3 times base salary.
Short-Term Incentives (Annual Bonus)
EnLink’s 2020 Short-Term Incentive Program, which is approved by the Board, rewards all employees for achievement of key metrics directly tied to our strategic initiatives. This bonus program primarily measures our ability to maximize financial performance with additional focus on operational efficiencies, management of capital projects, and an ongoing, proactive commitment to safety and sustainability in all aspects of our business.
In recognition of the ongoing importance of sustainability, the 2021 Short-Term Incentive Program includes a “Safety and Sustainability Scorecard” with an additional environmental metric – Reportable Environmental Incident Rate – and increased the Safety and Sustainability Scorecard weighting by 50% over 2020 performance goals to a total of 15% of the 2021 program.
The components included in our bonus program are key to driving our success. Tying the compensation of our leaders and employees directly to these targets motivates our teams to focus on delivering results in a way that is consistent with EnLink’s values.
- Common unit ownership for our executive leadership team excludes Pablo Mercado who was appointed Executive Vice President & CFO effective July 13, 2020 and did not own vested EnLink common units as of such date.
- Market practice data reported in the 2020 Domestic Stock Plan Administration Survey presented by the National Association of Stock Plan Professionals and Deloitte Consulting LLP. ISS information from the 2021 Methodology Guide for the Governance QualityScore.
This webpage is part of EnLink's 2020 Sustainability Report, published May 4, 2021, and reflects content from and as of such date.