Unit-based Compensation

12 Months Ended

Dec. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

UNIT-BASED COMPENSATION

11. UNIT-BASED COMPENSATION

Overview

Our general partner maintains the Valero Energy Partners LP 2013 Incentive Compensation Plan (2013 ICP) under which various unit and unit-based awards may be granted to employees and non-employee directors. Awards under the 2013 ICP may include, but are not limited to, options to purchase common units, performance awards that vest upon the achievement of an objective performance goal, unit appreciation rights, and restricted units that vest over a period determined by the plan. The 2013 ICP was approved by the board of directors and the sole member of our general partner on November 26, 2013. As of December 31, 2017, 2,978,394 common units were available to be awarded under the 2013 ICP.

Restricted Units

Restricted units have been granted to each of our three independent directors (i.e., participants) in tandem with an equal number of DERs. The restricted units vest in accordance with individual written agreements between the participants and us, usually in equal one-third increments on each anniversary of the restricted units’ grant date. The DERs entitle the participant to a cash payment equal to the cash distribution per unit paid on our outstanding common units and is paid to the participant in cash as of each record payment date during the period the restricted units are outstanding.

Unit-based compensation expense associated with these restricted units was $266,000,$196,000, and $173,000 for the years ended December 31, 2017, 2016, and 2015, respectively, and is recorded within general and administrative expenses on our statements of income.