What is the financial impact of William Ordemann's retirement on EPD?

The direct financial impact on EPD relates to the consulting agreement with EPCO, an affiliate, for services rendered by Mr. Ordemann. EPD itself will not incur direct costs for his retirement, but the affiliate EPCO will pay consulting fees and benefits. The vesting of Mr. Ordemann's phantom units represents a non-cash equity compensation expense that is generally recognized over time prior to vesting. The immediate effect is the acceleration of this expense recognition upon his retirement.

What are the terms of Mr. Ordemann's consulting agreement?

The consulting agreement spans 24 months from August 16, 2019. Mr. Ordemann will receive an annual retainer of $300,000 and an additional $500 per hour for services. He will also receive a $150,000 lump-sum payment after the term and medical benefits for up to 18 months. In return, he agrees to provide consulting services, protect confidential information, and not solicit employees or customers, or engage in competition.

Why is Mr. Ordemann receiving continued medical benefits and a lump sum payment?

These are part of the negotiated terms in his Retirement, Consulting Services and Release Agreement. The medical benefits are provided for a specified period post-retirement, and the lump sum payment is additional compensation for his agreement to the terms, including the consulting services and restrictive covenants (non-disclosure, non-solicitation, non-competition).

Does Mr. Ordemann's retirement affect his ownership or equity in EPD?

Yes, his retirement is considered a "Qualifying Termination," which means his previously unvested phantom unit awards have become fully vested. This effectively accelerates his receipt of these awards, which were part of his long-term incentive compensation.

EPD/EPDU 8-K: Leadership Changes

Summary

This 8-K filing from Enterprise Products Partners L.P. (EPD) confirms the retirement of William Ordemann, Executive Vice President of the general partner, effective August 16, 2019. While Mr. Ordemann is retiring from his executive role, he has entered into a consulting agreement with EPCO, a privately owned affiliate, to provide services for 24 months. This arrangement ensures continuity and access to his expertise while formalizing his departure from operational duties. Investors should note that Mr. Ordemann's retirement triggers the vesting of his previously unvested phantom unit awards, meaning these awards will now be fully vested. Additionally, the consulting agreement includes specific compensation for his services, including an annual retainer, hourly fees, a lump-sum payment, and continued medical benefits for up to 18 months. In exchange, Mr. Ordemann has agreed to provide consulting services, maintain confidentiality, and refrain from soliciting employees or customers, and engaging in competition. This agreement is designed to manage the transition smoothly and protect the company's interests.

Key Highlights

1William Ordemann, EVP of the general partner, retired effective August 16, 2019.
2Mr. Ordemann has entered into a 24-month consulting agreement with EPCO, an affiliate.
3His retirement qualifies as a "Qualifying Termination," triggering the full vesting of his unvested phantom unit awards.
4EPCO will pay Mr. Ordemann a $300,000 annual consulting retainer, plus $500 per hour for services rendered.
5A lump-sum cash payment of $150,000 will be made to Mr. Ordemann after the consulting term.
6Mr. Ordemann will receive medical benefits for up to 18 months post-retirement.
7The agreement includes non-disclosure, non-solicitation, and non-competition clauses for the term of consulting.

ENTERPRISE PRODUCTS PARTNERS L.P. 8-K Report, Executive Changes (Aug 22, 2019)

Summary

Key Highlights

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