What is the primary purpose of the 2020 Annual Incentive Compensation Plan?

The primary purpose of the 2020 Annual Incentive Compensation Plan is to reward Targa Resources' employees, including its executive officers, for their contributions towards achieving the company's key business priorities for the year. It also aims to aid in employee retention and motivation.

What are the key business priorities for Targa Resources in 2020 under this plan?

The key business priorities for 2020 are divided into four categories: Financial Performance (e.g., Adjusted EBITDA, debt reduction), Operational Performance (e.g., project execution, volume growth, capital discipline), Sustainability (e.g., talent management, ESG), and Safety (holistic scorecard, incident rates).

How is the bonus pool funding determined?

The level of funding for the cash bonus pool is based on Targa Resources' achievement of the defined financial, operational, sustainability, and safety objectives for 2020. The Chief Executive Officer recommends the total bonus pool amount to the Compensation Committee, which then makes the final determination, with potential payouts ranging from 0 to 2x the aggregate target bonus opportunities.

Does safety performance affect the incentive compensation?

Yes, safety performance is a critical component. It is evaluated using a holistic scorecard. Poor performance below expectations can act as a modifier that reduces the overall bonus plan payout, reinforcing the expectation of strong safety performance.

TRGP 8-K: Leadership Changes

Summary

Targa Resources Corp. (TRGP) announced on January 23, 2020, the approval of its 2020 Annual Incentive Compensation Plan (Bonus Plan) by its Compensation Committee. This plan is designed to motivate and retain employees, including executive officers, by rewarding contributions towards the company's key business priorities for the upcoming year. The Bonus Plan is an annual cash bonus program where the total funding is directly tied to the company's achievement of specific financial, operational, sustainability, and safety objectives. The 2020 objectives emphasize a balanced approach, focusing on financial performance (Adjusted EBITDA, debt reduction, funding), operational execution (project and volume growth, capital discipline), sustainability (talent management, ESG), and safety. The compensation structure allows for payouts ranging from 0 to 2x the aggregate target bonus opportunities, with the Compensation Committee retaining ultimate discretion over the bonus pool allocation, informed by the CEO's recommendations and overall company performance relative to these targets. This structure aligns employee incentives with the company's strategic goals for value creation and prudent management.

Key Highlights

1Targa Resources Corp. (TRGP) has approved its 2020 Annual Incentive Compensation Plan (Bonus Plan).
2The Bonus Plan is designed to reward employees, including executives, for contributions towards company business priorities.
3Key business priorities for 2020 are categorized into Financial Performance, Operational Performance, Sustainability, and Safety.
4Financial Performance objectives include Adjusted EBITDA, growth relative to plan and expectations, balance sheet management, and debt reduction.
5Operational Performance focuses on project and operational execution, volume growth, and capital discipline.
6Sustainability and Safety are included as crucial components, with ESG and talent management part of sustainability, and safety performance acting as a potential modifier to payouts.
7The total cash bonus pool is discretionary and can range from 0 to 2x the aggregate target bonus opportunities, based on company performance and Committee approval.

Targa Resources Corp. 8-K Report, Executive Changes (Jan 23, 2020)

Summary

Key Highlights

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