Form 4: Western Midstream Partners Executive Acquires Phantom and Performance Units

Daniel P. Holderman, SVP & Chief Operating Officer of Western Midstream Partners, reports acquisition of phantom and performance units, indicating potential future ownership of common units.

Summary

• Daniel P. Holderman, SVP & Chief Operating Officer of Western Midstream Partners, filed a Form 4 detailing changes in beneficial ownership.
• The report indicates the acquisition of 30,026 phantom units, 15,013 performance units (TUR), and 15,013 performance units (ROA) on February 20, 2025.
• These units are derivative securities that, upon vesting, can be converted into common units representing limited partner interests or cash equivalent to the fair market value of a common unit.
• Holderman also directly owns 35,748 common units representing limited partner interests.

Sentiment

Score: 6

Explanation: The document is a routine regulatory filing. The acquisition of units is neither overtly positive nor negative, but suggests confidence in the company's future performance.

Positives

• The acquisition of performance units suggests alignment of executive compensation with company performance.
• The vesting schedule of the phantom units encourages long-term commitment from the executive.

Future Outlook

The acquired phantom and performance units represent potential future ownership of Western Midstream Partners common units, contingent on vesting and performance criteria.

Industry Context

Executive compensation packages often include equity-based awards like phantom and performance units to align management interests with shareholder value and company performance in the energy sector.

Comparison to Industry Standards

• Companies like Enterprise Products Partners (EPD) and MPLX LP (MPLX) also utilize similar equity-based compensation plans for their executives.
• These plans typically involve a mix of restricted units, performance units, and stock options, with vesting schedules tied to service requirements and performance goals.
• The specific metrics used for performance units, such as Total Unit Return (TUR) and Return on Assets (ROA), are common benchmarks in the midstream energy industry to measure profitability and efficiency.

Stakeholder Impact

• The acquisition of performance-based units could incentivize management to improve company performance, potentially benefiting shareholders.
• The vesting schedule of the phantom units may encourage long-term commitment from the executive, which could benefit the company and its stakeholders.

Key Dates