Form 4: Western Midstream Partners CEO Acquires Phantom Units

Oscar K. Brown, President & CEO of Western Midstream Partners, acquired 157,978 phantom units, which are the economic equivalent of common units, on October 28, 2024.

Summary

• On October 28, 2024, Oscar K. Brown, the President & CEO of Western Midstream Partners, acquired 157,978 phantom units.
• These phantom units vest ratably over a three-year period starting October 28th each year and will pay distribution equivalent rights in cash on a current basis.
• Each phantom unit is the economic equivalent of one WES common unit, and upon vesting, will entitle the holder to receive a common unit or, at the discretion of the Board of Directors of the General Partner, cash equal to the Fair Market Value of a Common Unit.
• Following the transaction, Mr. Brown directly owns 5,199 phantom units and 157,978 phantom units acquired in 2024.
• Mr. Brown also disposed of 34,791 common units representing limited partner interests.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The acquisition of phantom units suggests confidence in the company's future performance and aligns management's interests with those of the unitholders. However, the disposal of common units could be seen as slightly negative.

Positives

• The acquisition of phantom units aligns the CEO's interests with those of the unitholders, as the value of the units is tied to the performance of WES common units.

Future Outlook

The phantom units vest ratably over a three-year period, suggesting a continued alignment of the CEO's interests with the company's performance over that timeframe.

Industry Context

This type of equity-based compensation is common in the energy industry to incentivize executives and align their interests with those of the unitholders.

Comparison to Industry Standards

• Granting phantom units is a common practice among publicly traded partnerships, including those in the midstream energy sector.
• Companies like Enterprise Products Partners (EPD) and MPLX LP (MPLX) also utilize similar equity-based compensation plans for their executives.
• The vesting schedule and terms of the phantom units are generally in line with industry standards, aiming to retain and motivate key personnel.

Stakeholder Impact

• The acquisition of phantom units aligns the CEO's interests with those of the unitholders, potentially leading to decisions that benefit all stakeholders.
• Employees may view the equity-based compensation as a positive sign of the company's commitment to its leadership.

Key Dates