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Breitburn Energy Partners LP Message Board

  • upn42 upn42 Dec 12, 2011 8:00 PM Flag

    "unit based compensation 10% of adjusted EBITDA

    With about $20mm of unit based compensation and Adj. Ebitda of around 210 mm this year does anyone else think the unit based compensation is high compared to other upstream MLP's.VNR & Line are 2% or less. VNR is comparable in EV while line is about 5 times larger.I'm in support of management and believe they have navigated the ups and downs well.If they are working harder because of unit based compensation and that helps me out then we both win. But BBEP's unit based compensation has been higher than comparable MLP's for a while.

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    • Money-I agree for 2012 VNR has decent hedges. I reviewed BBEP's 2013 (73% @ 5.96) &2014 (63% at 5.43) and feel a little better comfort level .VNR is 64% liquids .Do you know the breakout for NGL and oil.BBEP is 71% gas (current production 50-50).BBEP needs those hedges .VNR not as much need.

    • This board has never really analyzed the compensation, but I have always thought it a bit too high. Ebitda is essentially overstated (true for other MLPs as well), because that non-cash compensation does dilutes the shares overtime or requires cash to buy back shares. I am not even sure if it is normal stock options or if it is paid in cash. Doesn't really matter because the economic cost to shareholders is the same.

    • upn good question; but you will notice

      first lead in to the def 14, not all companies present pay for all similar executives in the table.

      second I would draw your attention away from stock/unit awards as they may not all eventually be executed. Each company has different trigger/execution mechanisms and value will eventually be based on unit price at time executed vs compared to grant price at time of the award

      Lastly specific to bbep executive compensation, it is both for bbep and the gp. To make equivalent comparisons requires so allocations. Not all of the executive compensation is dropped down to bbep as cost. To compare apples to apples with other mlps you would either need to drop gp's ebitda to bbep which is not disclosed; but includes several california oil properties so the undisclosed ebitda could be material to the calculation; or pro rate some of the executive compensation cost back to the gp

      just my obvservations

    • upn good question; but you will notice lead in to the def 14, not all companies present pay for all similar executives in the table.

      second I would draw your attention away from stock/unit awards as they may not all eventually be awarded because each company has different trigger mechanisms and value will eventually be based on unit price executed on at time award is executed compared to grate price at time of teh grant

      Lastly specific to bbep executive compensation, it is both for bbep and the gp, so you would need to add the gp's ebitda in to bbep's to get equivalent rates. if I remember correctly not all of the executive compensation is dropped down to bbep, so as the gp's ebitda is not disclosed but includes several california oil properties so the undisclosed ebitda could be material to the calculation

      just my obvservations

 
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