Kinder owns 20% of KMI, as well as a few hundred thousand KMP units and a few KMR units. He's never sold any to my knowledge. As KMI manages KMP(and KMR which is really KMP but more tax efficient), it gets a fee. As the KMP distribution is raised higher and higher, KMI gets a higher fee for being able to raise this distribution that is paid to the limited partners. In essence, the better the limited partners do, the better the GP does. KMI also owns quite a few KMP and KMR units so they are eating their own cooking.
Thanks for your thoughtful answers. I should really dig into the SEC docs as I once did, a few years back. Trouble is, the info is so hard to find. Even though I got myself the Apple 23" Cinema display where you can read two full pages at a time. I think I had Form 10K hard copies once. Hardcopy still beats the Internet by a mile :-)
But your answer jogs my memory a bit: Do KMI award themselves more KMP units which then entitles KMI to a greater percentage share of the KMP distributions ?
abter1, you refer to a cap on the percentage. Has that been reached at KMP ? Where could I find the document which describes the limit - if you can remember off hand.
I agree that a growing percentage is not unfair and certainly can be obtained by a strong performer as Kinder is. I once saw a deal run by Larry Silverstein (later of World Trade Center fame) where he got 6 %. if I remember, a pretty high number in Real Estate. People who invested in his deals grumbled but signed up because he is known to perform.
My immediate source of info is a periodic review of the MLP world that Ronald Londe, a senior analyst at AG Edwards, puts out. Unfortunately, as far as I can tell it is not available on line except for AGE customers. It is a good piece (as was the earlier one 6 months ago), and discusses lots of good MLP issues: interest rate impacts, distribution growth, GP splits, etc. Londe covers 22 MLPs (19 pipes &/or propanes, plus the 3 coal MLPs...he doesn't do the timber MLPs) including KMP. Unfortunately, as far as I know you have to be an Edwards customer to get online access to it. If you aren't a customer, perhaps you can ask a friend. Or call AG Edwards. For the price of listening to a sales pitch I am sure they would provide you with one.
Londe says that KMP, and several of the other 'mature' MLPs are at their cap. In KMP's case it is a 50% split. I don't have an easy source of info as to when they got there.