8-K: Western Midstream Partners Announces Retirement Agreement with Senior Vice President and Chief Commercial Officer

Robert W. Bourne, Senior Vice President and Chief Commercial Officer of Western Midstream Partners, LP, will retire on March 3, 2025, after entering into a Retirement Agreement with the company.

Summary

• Western Midstream Partners, LP (WES) announced that Robert W. Bourne, Senior Vice President and Chief Commercial Officer, entered into a Retirement Agreement on February 18, 2025.
• Mr. Bourne will transition to an advisory role until his retirement date of March 3, 2025.
• Following his retirement, Mr. Bourne will serve as a consultant for six months at a monthly rate of $77,250.
• Mr. Bourne will receive a pro rata target bonus for 2025 and continued benefits, including vesting of equity awards and participation in benefit plans.
• He will also receive a new time-vested award with an estimated value of $2.1 million that vests over two years.
• Additionally, he will receive TUR and ROA awards with target values of $250 thousand each, subject to performance conditions.
• The Retirement Agreement includes standard confidentiality, non-solicitation, non-disparagement, and non-competition covenants.
• The company will file the full Retirement Agreement as an exhibit to its Quarterly Report on Form 10-Q for the period ending March 31, 2025.

Sentiment

Score: 7

Explanation: The announcement is neutral to slightly positive. It details a planned executive transition with clear terms and conditions. The company is ensuring a smooth transition and retaining expertise.

Positives

• The agreement ensures a smooth transition with Mr. Bourne serving as an advisor and consultant.
• The company retains Mr. Bourne's expertise through a consulting agreement.
• The agreement includes standard protections for the company, such as non-solicitation and non-competition clauses.

Risks

• The departure of a Senior Vice President and Chief Commercial Officer could create a temporary leadership gap.
• The company will incur additional costs related to the retirement benefits and consulting fees.

Future Outlook

The company anticipates a smooth transition with Mr. Bourne's advisory and consulting roles. The company will file the full Retirement Agreement as an exhibit to its Quarterly Report on Form 10-Q for the period ending March 31, 2025.

Industry Context

Executive transitions are common in the midstream energy sector. Companies often structure retirement agreements to ensure continuity and retain expertise.

Comparison to Industry Standards

• Retirement packages for senior executives in the energy sector typically include a combination of cash payments, equity vesting, and continued benefits.
• Consulting agreements are also common to leverage the executive's experience during the transition period.
• The terms of Mr. Bourne's retirement agreement appear to be consistent with industry standards for executives at similar levels.

Management Changes

Stakeholder Impact

• Shareholders: The announcement provides transparency regarding executive transitions.
• Employees: The transition may impact the commercial team and require adjustments.
• Customers: The company aims to maintain continuity in its commercial operations.
• Suppliers: The non-solicitation covenants may impact supplier relationships.

Next Steps

• Mr. Bourne will transition to an advisory role until March 3, 2025.
• Mr. Bourne will begin his consulting role on March 4, 2025.
• The company will file the Retirement Agreement as an exhibit to its Quarterly Report on Form 10-Q for the period ending March 31, 2025.

Key Dates