EEQ » Topics » COMPENSATION DISCUSSION AND ANALYSIS

These excerpts taken from the EEQ 10-K filed Feb 19, 2009.

COMPENSATION DISCUSSION AND ANALYSIS

We are a master limited partnership and we do not directly employ any of the individuals responsible for managing or operating our business nor do we have any directors. We obtain managerial, administrative and operational services from our general partner, Enbridge Management and Enbridge pursuant to service agreements among us, Enbridge Management, and affiliates of Enbridge. Pursuant to these service agreements, we have agreed to reimburse our general partner and affiliates of Enbridge for the cost of managerial, administrative, operational and director services they provide to us.

The compensation policies and philosophy of Enbridge govern the types and amounts of compensation granted to each of the Named Executive Officers, or NEOs. The NEOs at December 31, 2008 were as follows: Stephen J.J. Letwin, Managing Director, Terrance L. McGill, President, Stephen J. Wuori, Executive Vice President—Liquids Pipelines, Mark A. Maki, Vice President of Finance, and Al Monaco, Executive Vice President. Since the policies and philosophy are those of Enbridge, we refer you to a discussion of those items as set forth in the Executive Compensation section of the Enbridge “Management Information Circular,” or MIC, on the Enbridge website at www.enbridge.com. The Enbridge MIC is produced by Enbridge pursuant to Canadian securities regulations and is not incorporated into this document by reference or deemed furnished or filed by us under the Exchange Act; rather the reference is to provide our investors with an understanding of the compensation policies and philosophy of the ultimate parent of our general partner.

The boards of directors of Enbridge Management and our general partner do not have separate compensation committees, nor do they have responsibility for approving the elements of compensation presented in the tables which follow this discussion. The boards of directors of Enbridge Management and our general partner do have responsibility for evaluating and determining the reasonableness of the total amount we are charged for managerial, administrative and operational support, including compensation of the NEOs, provided by Enbridge and its affiliates, including our general partner and Enbridge Management.

All Enbridge employees domiciled in the United States are directly employed by its subsidiary, Enbridge Employee Services, Inc., which we refer to as EES. In connection with our annual budget process, we calculate an average “Budgeted Allocation Rate,” which represents an estimated average percentage of expected time that will be spent by each of our NEOs on our business during the succeeding year. Those estimates are revised each year based on historical experience. The average Budgeted Allocation Rate was 85% for 2008 and has been set at approximately 77% for 2009. Salary costs of EES are allocated to us based on the percentage of time spent by EES employees on our behalf compared with the total time of all EES employees. We are allocated a portion of the equity-based compensation expense as determined in accordance with U.S. GAAP. Pension expenses of EES (other than expenses under Enbridge’s nonqualified supplemental pension plan for U.S.-domiciled employees, which we refer to as the SPP) are allocated to us based on the proportion that the total headcount of EES employees assigned to us bears to the total headcount of EES. For this purpose, an employee of EES is deemed to be assigned to us if he or she works on assets we own. Pension expenses of EES attributable to the SPP are allocated to us based upon the average Budgeted Allocation Rate. EES allocates to us that portion of its compensation expense for Enbridge’s Short Term Incentive Plan, a non-equity performance-based incentive plan, equal to the total salaries of employees who perform work for us multiplied by the average Budgeted Allocation Rate divided by EES’ total salary expense.

We are a partnership and not a corporation for U.S. federal income tax purposes, and therefore, are not subject to the executive compensation tax deductible limitations of Internal Revenue Code §162(m). Accordingly, none of the compensation paid to our NEOs is subject to limitation. The compensation of our NEOs included in the tables below is established by a committee of the board of directors of Enbridge. We have included in the following tables the full amount of compensation and related benefits provided for the NEOs for 2008, 2007 and 2006, together with the approximate amount of compensation cost allocated to us for the years ended December 31, 2008, 2007 and 2006.

 

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Table of Contents
Index to Financial Statements

COMPENSATION DISCUSSION AND ANALYSIS

We are a master limited partnership and we do not directly employ any of the individuals responsible for managing or operating our business nor do we have any directors. We obtain managerial, administrative and operational services from our general partner, Enbridge Management and Enbridge pursuant to service agreements among us, Enbridge Management, and affiliates of Enbridge. Pursuant to these service agreements, we have agreed to reimburse our general partner and affiliates of Enbridge for the cost of managerial, administrative, operational and director services they provide to us.

The compensation policies and philosophy of Enbridge govern the types and amounts of compensation granted to each of the Named Executive Officers, or NEOs. The NEOs at December 31, 2008 were as follows: Stephen J.J. Letwin, Managing Director, Terrance L. McGill, President, Stephen J. Wuori, Executive Vice President—Liquids Pipelines, Mark A. Maki, Vice President of Finance, and Al Monaco, Executive Vice President. Since the policies and philosophy are those of Enbridge, we refer you to a discussion of those items as set forth in the Executive Compensation section of the Enbridge “Management Information Circular,” or MIC, on the Enbridge website at www.enbridge.com. The Enbridge MIC is produced by Enbridge pursuant to Canadian securities regulations and is not incorporated into this document by reference or deemed furnished or filed by us under the Exchange Act; rather the reference is to provide our investors with an understanding of the compensation policies and philosophy of the ultimate parent of our general partner.

The boards of directors of Enbridge Management and our general partner do not have separate compensation committees, nor do they have responsibility for approving the elements of compensation presented in the tables which follow this discussion. The boards of directors of Enbridge Management and our general partner do have responsibility for evaluating and determining the reasonableness of the total amount we are charged for managerial, administrative and operational support, including compensation of the NEOs, provided by Enbridge and its affiliates, including our general partner and Enbridge Management.

All Enbridge employees domiciled in the United States are directly employed by its subsidiary, Enbridge Employee Services, Inc., which we refer to as EES. In connection with our annual budget process, we calculate an average “Budgeted Allocation Rate,” which represents an estimated average percentage of expected time that will be spent by each of our NEOs on our business during the succeeding year. Those estimates are revised each year based on historical experience. The average Budgeted Allocation Rate was 85% for 2008 and has been set at approximately 77% for 2009. Salary costs of EES are allocated to us based on the percentage of time spent by EES employees on our behalf compared with the total time of all EES employees. We are allocated a portion of the equity-based compensation expense as determined in accordance with U.S. GAAP. Pension expenses of EES (other than expenses under Enbridge’s nonqualified supplemental pension plan for U.S.-domiciled employees, which we refer to as the SPP) are allocated to us based on the proportion that the total headcount of EES employees assigned to us bears to the total headcount of EES. For this purpose, an employee of EES is deemed to be assigned to us if he or she works on assets we own. Pension expenses of EES attributable to the SPP are allocated to us based upon the average Budgeted Allocation Rate. EES allocates to us that portion of its compensation expense for Enbridge’s Short Term Incentive Plan, a non-equity performance-based incentive plan, equal to the total salaries of employees who perform work for us multiplied by the average Budgeted Allocation Rate divided by EES’ total salary expense.

We are a partnership and not a corporation for U.S. federal income tax purposes, and therefore, are not subject to the executive compensation tax deductible limitations of Internal Revenue Code §162(m). Accordingly, none of the compensation paid to our NEOs is subject to limitation. The compensation of our NEOs included in the tables below is established by a committee of the board of directors of Enbridge. We have included in the following tables the full amount of compensation and related benefits provided for the NEOs for 2008, 2007 and 2006, together with the approximate amount of compensation cost allocated to us for the years ended December 31, 2008, 2007 and 2006.

 

105


Table of Contents
Index to Financial Statements
This excerpt taken from the EEQ 10-K filed Feb 22, 2007.

COMPENSATION DISCUSSION AND ANALYSIS

We are a master limited partnership and we do not directly employ any of the individuals responsible for managing or operating our business nor do we have any directors. We obtain managerial, administrative and operational services from our general partner and Enbridge pursuant to service agreements among us, Enbridge Management, and affiliates of Enbridge. Pursuant to these service agreements, we have agreed to reimburse our general partner and affiliates of Enbridge for the cost of managerial, administrative, operational and director services they provide to us.

The compensation policies and philosophy of Enbridge govern the types and amount of compensation granted each of the Named Executive Officers, or NEOs. Since these policies and philosophy are those of Enbridge, we refer you to a discussion of those items as set forth in the Executive Compensation section of the Enbridge “Management Information Circular” on the Enbridge website at www.enbridge.com. The Enbridge “Management Information Circular” is produced by Enbridge pursuant to Canadian securities regulations and is not incorporated into this document by reference or deemed furnished or filed by us under the Securities Exchange Act of 1934, as amended; rather the reference is to provide our investors with an understanding of the compensation policies and philosophy of the ultimate parent of our general partner.

The boards of directors of Enbridge Management and our General Partner do not have separate compensation committees, nor do they have responsibility for approving the elements of compensation presented in the tables which follow this discussion. The boards of directors of Enbridge Management and our general partner do have responsibility for evaluating and determining the reasonableness of the total amount we are charged for managerial, administrative and operational support, including compensation of the NEOs, provided by Enbridge and its affiliates, including our general partner.

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All U.S.-domiciled employees of Enbridge are directly employed by its subsidiary, Enbridge Employee Services, Inc., which we refer to as EES. In connection with our annual budget process, we calculate an average “Budgeted Allocation Rate,” which represents an estimated average of the percentage of time for each of our NEOs that will be spent on our business during the succeeding year. Those estimates are revised each year based on historical experience. The average Budgeted Allocation Rate was 87% for 2006 and has been set at 84% for 2007. EES’s salary costs are allocated to us based on the percentage of time spent by EES employees on our behalf compared with the total time of all EES employees. We are allocated a portion of the equity-based compensation expense as determined in accordance with U.S. GAAP. Pension expenses of EES (other than expenses under Enbridge’s nonqualified supplemental pension plan for U.S.-domiciled employees, which we refer to as the SPP) are allocated to us based on the proportion that the total headcount of EES employees assigned to us bears to the total headcount of EES. For this purpose, an employee of EES is deemed to be assigned to us if he or she works on assets owned by the Partnership. Pension expenses of EES attributable to the SPP are allocated to us based upon the average Budgeted Allocation Rate. EES allocates to us that portion of its compensation expense for Enbridge’s Short Term Incentive Plan, a non-equity performance-based incentive plan, equal to the total salaries of employees who perform work for us multiplied by the average Budgeted Allocation Rate divided by EES’ total salary expense.

As we are a partnership and not a corporation for U.S. federal income tax purposes, we are not subject to the executive compensation tax deductible limitations of Internal Revenue Code §162(m). Accordingly, none of the compensation paid to our NEOs is subject to limitation. The compensation of our Named Executive Officers included in the tables below is established by a committee of the board of directors of Enbridge. We have included in the following tables, the full amount of compensation and related benefits provided for the NEOs for 2006, together with the approximate amount of compensation cost allocated to us for the year ended December 31, 2006.

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