DEF 14A 1 a2238530zdef14a.htm DEF 14A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.          )

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Soliciting Material under §240.14a-12

 

Equitrans Midstream Corporation

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April 26, 2019

Fellow Shareholders,

On behalf of the Board of Directors and management of Equitrans Midstream Corporation, I am pleased to invite you to participate in our first annual meeting of shareholders, to be held on Tuesday, June 11, 2019 at 9:00 a.m. Eastern Time at the law offices of McGuireWoods LLP, located at Tower Two-Sixty, 260 Forbes Avenue, Suite 1800, Pittsburgh, Pennsylvania 15222. We became a publicly traded company in November 2018, when EQT Corporation (our former parent company) made a pro-rata distribution of 80.1% of our outstanding common stock to its shareholders. As a result of the separation, we now operate as an independent public company and our common stock trades on the New York Stock Exchange under the symbol "ETRN."

You will be asked to vote on several items at the annual meeting, including the election of directors, approval of our executive compensation program for 2018 (the say-on-pay vote), approval of the frequency with which we should conduct a say-on-pay vote, and ratification of the appointment of our independent registered public accounting firm for 2019. The proxy statement describes these items in more detail. Please read the proxy materials and follow the voting instructions to ensure your shares are represented at the meeting.

Your vote is important. Whether or not you plan to attend the annual meeting, please vote as soon as possible — by telephone, via the Internet, or by completing and signing your paper proxy card or vote instruction form — to ensure that your shares are represented and voted.

Since completion of the separation, our employees have taken much pride in helping Equitrans Midstream Corporation achieve its vision to become the premier, top-tier midstream company in North America. Our goal is simple, to provide safe, reliable, and innovative infrastructure solutions for the energy industry. Moving forward as a standalone midstream organization, we will operate with integrity, accountability, and transparency to:

Deliver sustained value for our customers and shareholders

Provide an engaging workplace for our employees

Preserve and protect the environment

Support the communities where we live and work

I look forward to reporting on our progress and many successes during the annual meeting. Thank you for your investment in Equitrans Midstream Corporation and your participation in our first annual meeting of shareholders.

Thomas F. Karam

President and Chief Executive Officer

   

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Notice of Annual Meeting of Shareholders
To Be Held June 11, 2019

WHEN:    The annual meeting of shareholders of Equitrans Midstream Corporation (the Company or Equitrans Midstream) will be held on Tuesday, June 11, 2019, at 9:00 a.m. (Eastern Time) at the law offices of McGuireWoods LLP, located at Tower Two-Sixty, 260 Forbes Avenue, Suite 1800, Pittsburgh, Pennsylvania 15222.

RECORD DATE:    Our Board of Directors has established the close of business on April 12, 2019 as the record date for determining shareholders entitled to receive notice of, and to vote at, the annual meeting and any adjournment or postponement of the meeting.

ITEMS OF BUSINESS:    The following matters will be voted on at the meeting:

Election of seven directors, each for a one-year term expiring at the 2020 annual meeting of shareholders;

Approval, on an advisory basis, of the compensation of Equitrans Midstream's named executive officers for 2018;

Approval, on an advisory basis, of the frequency of future advisory votes on executive compensation;

Ratification of the appointment of Ernst & Young LLP as Equitrans Midstream's independent registered public accounting firm for 2019; and

Such other business that may properly come before the meeting or any adjournment or postponement of the meeting.

VOTING:    Please consider the issues presented in the attached proxy statement and vote your shares as soon as possible by following the voting instructions included in the proxy statement.

ATTENDING THE MEETING:    If you plan to attend the meeting, please follow the advance registration instructions under "Additional Information — Attending the Annual Meeting and Obtaining an Admission Ticket" on page 65 of the proxy statement and watch for an admission ticket in the mail. You will need an admission ticket and photo identification to enter the meeting.

On behalf of the Board of Directors,

Tobin M. Nelson

Deputy General Counsel & Corporate Secretary

April 26, 2019

Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Shareholders to Be Held June 11, 2019:

This notice and proxy statement and our annual report on Form 10-K for the year ended
December 31, 2018 are also available online at http://www.voteproxy.com.




TABLE OF CONTENTS



We commenced providing our proxy materials, or a notice of Internet availability providing access to such materials, on or about May 2, 2019.

Proxy Statement Summary

i

Item No. 1 – Election of Directors


1

Director Nominees

3

Corporate Governance and Board Matters


7

Board Meetings and Committees

7

Compensation Process

9

Board Leadership Structure

11

Board's Role in Risk Oversight

12

Director Nominations

13

Contacting the Board

14

Governance Principles

15

Independence and Related Person Transactions

16

Compensation Committee Interlocks and Insider Participation

17

Directors' Compensation


18

Equity-Based Compensation

18

Deferred Compensation

19

Equity Ownership Guidelines

19

Other

20

2018 Directors' Compensation Table

20

Equity Ownership


22

Stock Ownership of Significant Shareholders

22

Equity Ownership of Directors and Executive Officers

23

Equitrans Midstream Common Stock

23

EQM Common Units

24

Section 16(a) Beneficial Ownership Reporting Compliance

24

Executive Compensation Information


25

Compensation Discussion and Analysis


25

Named Executive Officers

25

Executive Summary

25

Our Compensation Committee's Process

28

Executive Pay Components

29

Separation of Named Executive Officer

33

Other Benefits

33

Looking Forward to 2019

34

Cautionary Statements

35

Report of the Management Development and Compensation Committee

36

Compensation Policies and Practices and Risk Management

36

Executive Compensation Tables

37

Summary Compensation Table

37

2018 Grants of Plan-Based Awards Table

39

Narrative Disclosure to Summary Compensation Table and 2018 Grants of Plan-Based Awards Table

40

Outstanding Equity Awards at Fiscal Year-End

41

Option Exercises and Stock Vested

43

Potential Payments Upon Termination or Change of Control

44

Item No. 2 – Advisory Vote on the Compensation of the Company's Named Executive Officers for 2018 (Say-On-Pay)


54

Item No. 3 – Advisory Vote on the Frequency of Future Advisory Votes on Executive Compensation


55

Report of the Audit Committee


56

Item No. 4 – Ratification of Appointment of Independent Registered Public Accounting Firm


58

Securities Authorized for Issuance Under Equity Compensation Plans


60

Equitrans Midstream Corporation Directors' Deferred Compensation Plan

60

Additional Information


61

Proposals, Board Recommendations, Vote Required, and Broker Non-Votes

61

Corporate Secretary Contact Information

61

Notice of Internet Availability of Proxy Materials

62

Voting Instructions

62

Attending the Annual Meeting and Obtaining an Admission Ticket

65

Other Matters

65

Appendices

 

Appendix A – Related Person Transactions with EQT and EQM

A-1

Appendix B – Non-GAAP Financial Information

B-1

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PROXY STATEMENT SUMMARY


WE BECAME A PUBLICLY TRADED COMPANY ON NOVEMBER 12, 2018

On November 12, 2018, we became a publicly traded company when our former parent company, EQT Corporation (EQT), separated its midstream business from its upstream business and made a pro-rata distribution of 80.1% of our outstanding common stock to EQT Corporation's shareholders (the Separation) and retained a 19.9% interest in our outstanding shares. The 2019 annual meeting is our first annual meeting following the Separation.


 



This summary highlights information about Equitrans Midstream Corporation and the upcoming 2019 annual meeting of shareholders. This summary does not contain all the information you should consider. You should read the entire proxy statement before you vote. We sometimes refer to Equitrans Midstream Corporation in this proxy summary and proxy statement as Equitrans Midstream, the Company, we, or us.


Equitrans Midstream Corporation was formed on May 11, 2018 to hold EQT's midstream business. As a stand-alone company, we are one of the largest natural gas gatherers in the United States, with a premier asset footprint in the Appalachian Basin. The Separation is described in more detail in our Annual Report on Form 10-K for the year ended December 31, 2018. In addition, our Annual Report on Form 10-K describes our company and the assets and liabilities that comprise the midstream business that we now own following completion of the Separation.

WE SIMPLIFIED OUR CORPORATE STRUCTURE AND GREW OUR BUSINESS SINCE THE SEPARATION

    Following the Separation, we executed a series of transactions to enhance and simplify our operating structure (the Simplification Transactions) as well as grow our asset footprint. Following completion of the Simplification Transactions and as of March 31, 2019, we owned 117,245,455 common units and 7,000,000 Class B units in EQM Midstream Partners, LP (NYSE: EQM) (collectively representing a 59.9% limited partner interest in EQM) and the entire non-economic general partner interest in EQM, while the public owned a 40.1% limited partner interest in EQM. Following the completion of a private placement, certain investors owned an aggregate of 24.6 million Series A Preferred Units and, taking into account such Series A Preferred Units issued in the private placement on an as-converted basis, as of March 31, 2019, the Company would have owned, directly or indirectly, a 53.5% limited partner interest in EQM, as well as the non-economic general partner interest in EQM. EQM is a growth oriented publicly traded limited partnership that owns, operates, acquires and develops midstream assets in the Appalachian Basin. EQM services producers, utilities and other customers through its strategically located natural gas transmission, storage, and gathering systems, and provides water services to support energy development and production in the Marcellus and Utica regions.

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Equitrans Midstream Corporation - 2019 Proxy Statement     i


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ANNUAL MEETING

  Time and Date:   9:00 a.m. (Eastern Time) on Tuesday, June 11, 2019

 

Place:

 

Law offices of McGuireWoods LLP
Tower Two-Sixty
260 Forbes Avenue
Suite 1800
Pittsburgh, Pennsylvania 15222

 

Record Date:

 

April 12, 2019

 

Admission:

 

You are entitled to attend the annual meeting if you were an Equitrans Midstream shareholder as of the close of business on the record date. If you plan to attend the meeting, you must obtain an admission ticket and abide by the agenda and procedures to be distributed at the meeting. If your shares are held by a broker, bank or other holder of record in street name, you must also provide proof of your ownership of the shares as of the record date in order to attend the meeting. See "Additional Information — Attending the Annual Meeting and Obtaining an Admission Ticket" on page 65 of this proxy statement for additional information and instructions.

MATTERS TO BE VOTED UPON

   
  Board Voting
Recommendation

  Page for more
Information


 

 

 

 

 

 
 

Item No. 1: Election of seven directors, each for a one-year term expiring at the 2020 annual meeting of shareholders

  FOR
EACH NOMINEE
  1
 

Item No. 2: Approval, on an advisory basis, of the compensation of Equitrans Midstream's named executive officers for 2018 (Say-on-Pay)

 

FOR

 

54

 

Item No. 3: Approval, on an advisory basis, of the frequency of future advisory votes on executive compensation

 

FOR
EVERY ONE YEAR

 

55

 

Item No. 4: Ratification of the appointment of Ernst & Young LLP as Equitrans Midstream's independent registered public accounting firm for 2019

 

FOR

 

58

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BOARD AND BOARD COMMITTEES

   
   
   
   
  Equitrans Midstream Board
Committee Membership
  Name, Principal Occupation &
Current Other Public Company Board Service

   
  Director
Since

   
  Age
  Independent
  AC
  CGC
  MDCC
  HSSE
  Vicky A. Bailey   66   2018   GRAPHIC       GRAPHIC       GRAPHIC
  President, Anderson Stratton International, LLC
& Vice President, BHMM Energy Services, LLC
                  Chair        

 

Current Other Public Company Boards: Cheniere Energy, Inc., PNM Resources, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Kenneth M. Burke   70   2018   GRAPHIC   GRAPHIC   GRAPHIC        
  Retired Partner, Ernst & Young LLP               Chair            

 

Current Other Public Company Boards: EQM Midstream Partners, LP

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Margaret K. Dorman   55   2018   GRAPHIC   GRAPHIC       GRAPHIC    
  Retired Executive Vice President, Chief Financial Officer and Treasurer,
Smith International, Inc.
                      Chair    

 

Current Other Public Company Boards: None

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Thomas F. Karam   60   2018                   GRAPHIC
  President and Chief Executive Officer, Equitrans Midstream Corporation                            

 

Current Other Public Company Boards: EQM Midstream Partners, LP

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  David L. Porges (Chairman)   61   2018                    
  Chairman, Equitrans Midstream Corporation and Retired Chairman, President and Chief Executive Officer, EQT Corporation                            

 

Current Other Public Company Boards: None

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Norman J. Szydlowski   67   2018   GRAPHIC           GRAPHIC   GRAPHIC
  Retired President and Chief Executive Officer, SemGroup Corporation                           Chair

 

Current Other Public Company Boards: None

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Robert F. Vagt (Lead Independent Director)   72   2018   GRAPHIC   GRAPHIC   GRAPHIC   GRAPHIC    
  Retired President, The Heinz Endowments                            

 

Current Other Public Company Boards: Kinder Morgan, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  AC   Audit Committee   MDCC   Management Development and Compensation Committee
  CGC   Corporate Governance Committee   HSSE   Health, Safety, Security and Environmental Committee

Equitrans Midstream Corporation - 2019 Proxy Statement     iii


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GOVERNANCE HIGHLIGHTS

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BUSINESS HIGHLIGHTS

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iv    Equitrans Midstream Corporation - 2019 Proxy Statement


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IMPORTANT DATES FOR 2020 ANNUAL MEETING OF SHAREHOLDERS

 
Shareholder proposals submitted for inclusion in Equitrans Midstream's 2020 proxy statement under Securities and Exchange Commission (SEC) rules must be submitted in writing and received by Equitrans Midstream's Corporate Secretary on or before January 3, 2020.
 
Under Equitrans Midstream's bylaws, if a shareholder would like to present a matter not included in our proxy statement in person at the 2020 annual meeting of shareholders, including nominations for director candidates, advance notice must be submitted in writing and received by Equitrans Midstream's Corporate Secretary no earlier than the close of business on February 12, 2020, and no later than the close of business on March 13, 2020.
 
Under our proxy access bylaws provision, a shareholder, or group of twenty or fewer shareholders, owning continuously for at least three years, shares of the Company representing an aggregate of at least 3% of the voting power entitled to vote in the election of directors, may nominate and include in Equitrans Midstream's proxy statement director nominees constituting the greater of (i) two and (ii) 20% of the Board of Directors of Equitrans Midstream. Shareholders will not be able to take advantage of our proxy access bylaws to satisfy the ownership requirement until our shareholders' meeting in 2022 (which is three years from the Separation).
 

For additional information, see "Additional Information – Shareholder Proposals and Director Nominations" on page 66 of this proxy statement.

Equitrans Midstream Corporation - 2019 Proxy Statement     v


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ITEM NO. 1    –    ELECTION OF DIRECTORS

The Board of Directors recommends a vote FOR each nominee for the Board of Directors.

Our Board of Directors, sometimes referred to in this proxy statement as the Board or our Board, is presenting seven nominees for election as directors at our annual meeting. All nominees currently serve on our Board of Directors and their current terms will expire at the 2019 annual meeting. Mses. Vicky A. Bailey and Margaret K. Dorman, and Messrs. Kenneth M. Burke, Thomas F. Karam, David L. Porges, Norman J. Szydlowski, and Robert F. Vagt, have been nominated to serve for a term of one year to expire at the 2020 annual meeting, or until their earlier removal or resignation or a successor is duly elected and qualified. Each nominee consents to being named in this proxy statement and to serve if elected. The Board has no reason to believe that any nominee will be unavailable or unable to serve. If any nominee is unable to stand for election for any reason, then the shares represented at our annual meeting will be voted by the persons named as proxies for substitute nominees proposed by the Board, unless the Board decides to reduce its size.

The following chart provides an overview of the attributes represented on our Board of Directors, in addition to each director's competencies included in the director profiles on the following pages.


INDEPENDENT
DIVERSE
EXPERIENCED


Each of our nominees was a member of the EQT board before the Separation. The Board selected our seven nominees based on a review of the attributes discussed on page 13 under "Corporate Governance and Board Matters – Director Nominations." Our Board believes that the nominees, individually and as a whole, possess qualifications consistent with our desired attributes and will provide management with strong independent oversight as we implement our strategic objectives and operate as a new public company.

OUR DIRECTOR NOMINEES



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Equitrans Midstream Corporation - 2019 Proxy Statement     1


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Each of our director nominees brings a unique skillset to the Board of Directors. Notably, all seven of our director nominees:

are experienced in Energy, Regulatory, Utility and/or Government;

have experience in the fields of finance, accounting and/or audit and control; and

have prior experience on the boards of other publicly traded companies.

Our director nominees are also experienced in the following areas:

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Each nominee must be elected by a majority of the votes cast FOR that director's election, and votes may not be cumulated. The persons named as proxies will vote FOR the nominees named, unless you vote against, or abstain from voting for or against, one or more of them.

In addition, under our bylaws, each nominee has submitted an irrevocable conditional resignation to be effective if the nominee receives a greater number of votes against than votes FOR his or her election in an uncontested election. If this occurs, the Board will decide whether to accept the tendered resignation no later than 90 days after certification of the election. The Board's determination shall be made without the participation of any nominee whose resignation is under consideration with respect to the election. The Board's explanation of its decision will be promptly disclosed on a Form 8-K furnished to the SEC.

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Director Nominees

Vicky A. Bailey Age 66 Director since November 2018

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Ms. Bailey served as a director of EQT Corporation from June 2004 until the Separation. Ms. Bailey has served as President, Anderson Stratton International, LLC (strategic consulting and government relations), since November 2005; and Vice President, BHMM Energy Services, LLC (utility and facilities management services), since January 2006. Ms. Bailey has been a director of Cheniere Energy, Inc. (an energy company primarily engaged in liquefied natural gas related businesses), since March 2006 and a director of PNM Resources, Inc. (an investor-owned holding company with two regulated utilities providing electricity and electric services in New Mexico and Texas) since January 2019. She was a director of Cleco Corporation (an energy services company with regulated utility and wholesale energy businesses) from June 2013 through March 2016.

Qualifications: Ms. Bailey has substantial regulatory and senior management experience in the energy industry, having previously served as a commissioner of the Federal Energy Regulatory Commission, President of PSI Energy, Inc. (a regulated utility) and commissioner of the Indiana Utility Regulatory Commission. These experiences enable her to provide valuable insights into issues facing the Company's regulated transmission business, particularly with respect to interacting with regulatory agencies. In addition, Ms. Bailey provides leadership to the Board with respect to energy policy issues, owing to her previous experience as Assistant Secretary for the Office of Policy and International Affairs at the Department of Energy. Ms. Bailey also draws upon public company board experience in supporting the Company's strategic efforts.

Ms. Bailey is Chair of the Corporate Governance Committee and a member of the Health, Safety, Security and Environmental Committee.

     
Kenneth M. Burke Age 70 Director since November 2018

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Mr. Burke served as a director of EQT Corporation from January 2012 until the Separation. Mr. Burke was a Partner at Ernst & Young LLP (EY) (a Big Four accounting firm) between October 1982 and June 2004. Mr. Burke served on the board of directors of Nexeo Solutions, Inc. (a publicly traded global chemical distributor) from November 2011 until its acquisition in March 2019. He also was appointed to the boards of directors of the general partners of EQM Midstream Partners, LP (EQM) and EQGP Holdings, LP (EQGP) in September 2018, and serves as a member of the Audit Committee of EQM's general partner. Mr. Burke served on the board of directors and as Chair of the Audit Committee of EQGP's general partner until the Company's acquisition of the interests in EQGP not held by the Company in January 2019 (the EQGP Buy-In).

Qualifications: Mr. Burke brings over three decades of experience focused on the energy industry, primarily oil and gas. Mr. Burke retired from EY in 2004, where he held a number of leadership positions, including National Energy Industry Director and Partner-in-Charge of the Houston Energy Services Group. He also co-authored the book "Oil and Gas Limited Partnerships: Accounting, Reporting and Taxation." During his years at EY, Mr. Burke served as audit partner for numerous companies in the oil and gas industry. Mr. Burke also has substantial experience as a director of both public and private companies where he has served on and chaired a number of committees.

Mr. Burke is Chair of the Audit Committee and a member of the Corporate Governance Committee.



   

Equitrans Midstream Corporation - 2019 Proxy Statement     3


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Margaret K. Dorman Age 55 Director since November 2018

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Ms. Dorman served as a director of EQT Corporation from January 2012 until the Separation. Ms. Dorman served as Chief Financial Officer and Treasurer of Smith International, Inc. (a publicly-traded supplier of oil and gas products and services) (now part of Schlumberger Limited), between May 1999 and October 2009. Ms. Dorman has been a director of privately-held Rubicon Oilfield International (provider of oilfield products and technologies) since August 2018, where she serves as chair of the Audit Committee and a member of the Compensation Committee.

Qualifications: Ms. Dorman brings to Equitrans Midstream a wealth of financial expertise and experience in the energy industry, having served in numerous financial positions with Smith International, Inc., including as the Chief Financial Officer for more than a decade, during a period of expansive growth. Previously, Ms. Dorman held management positions with Landmark Graphics, prior to its acquisition by Halliburton Corporation, and Ernst & Young LLP. She has experience directing financial accounting functions, building banking relationships, structuring debt and equity financings, integrating acquisitions and interacting with shareholders as the lead investor relations executive. Ms. Dorman also has other board and audit committee experience, having served as a director of EQT as well as Hanover Compressor Company (a full service natural gas compression business) (now part of Exterran Holdings, Inc.) from February 2004 through the date of the Exterran Holdings merger in August 2007.

Ms. Dorman is Chair of the Management Development and Compensation Committee (also referred to herein as the Compensation Committee) and a member of the Audit Committee.

     
Thomas F. Karam Age 60 Director since November 2018

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Mr. Karam was appointed President and Chief Executive Officer of Equitrans Midstream Corporation in September 2018 and to the Board of Equitrans Midstream in November 2018 upon the Separation. Prior to Equitrans Midstream, he was named Senior Vice President, EQT Corporation and President, Midstream in August 2018; serving in those capacities until the Separation in November 2018. He was also appointed as a Director and as President and Chief Executive Officer of EQM's general partner and EQGP's general partner in August 2018, and became Chairman in October 2018, serving in those capacities with EQGP's general partner until the EQGP Buy-In. Mr. Karam served on EQT's board of directors from November 2017 until the Separation. Mr. Karam was the founder and served as Chairman of Karbon Partners, LLC, which invests in, owns, constructs and operates midstream energy assets, from April 2017 to August 2018. Mr. Karam is the founder and previously served as Chairman and Chief Executive Officer of PennTex Midstream Partners, LLC, a publicly traded master limited partnership with operations in North Louisiana and the Permian Basin (PennTex), from 2014 until its sale to Energy Transfer Partners in 2016.

Qualifications: Mr. Karam has been a senior executive and entrepreneur in the midstream energy sector for more than 25 years. Preceding PennTex, he was the founder, Chairman and Chief Executive Officer of Laser Midstream Partners, LLC (Laser), one of the first independent natural gas gathering systems in the northeast Marcellus Shale, from 2010 until 2012 when it was acquired by Williams Partners. Prior to Laser, Mr. Karam was the President, Chief Operating Officer and Director of Southern Union Company, where he led its successful transformation from a large LDC to one of the largest pipeline companies in the United States at the time. Prior to Southern Union Company, Mr. Karam was the President and Chief Executive Officer of Pennsylvania Enterprises and PG Energy, a natural gas utility in central and northeastern Pennsylvania, until its acquisition by Southern Union Company. He began his professional career in investment banking with Legg Mason Inc. and Thomson McKinnon.

Mr. Karam is a member of the Health, Safety, Security and Environmental Committee.



   

4    Equitrans Midstream Corporation - 2019 Proxy Statement


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David L. Porges Age 61 Director since November 2018

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Mr. Porges served as a director of EQT Corporation from May 2002 until the Separation. In November 2018, Mr. Porges was appointed Chairman of Equitrans Midstream. Mr. Porges served as Chairman and Interim President and Chief Executive Officer of EQT Corporation from March 2018 to November 2018; Executive Chairman of EQT Corporation between March 2017 and February 2018; Chairman and Chief Executive Officer, EQT Corporation, between December 2015 through February 2017; and Chairman, President and Chief Executive Officer, EQT Corporation, between May 2011 and November 2015. Mr. Porges also served as the Chairman of the general partners of EQM and EQGP from January 2012 through October 2018 and from January 2015 through October 2018, respectively. Mr. Porges stepped down as a director of the general partners of EQM and EQGP following the EQGP Buy-In. Mr. Porges also served as Chairman of the general partner of Rice Midstream Partners LP (RMP) from November 2017 to July 2018 when RMP was acquired by EQM. Mr. Porges was the President and Chief Executive Officer of the EQGP and EQM general partners from each company's inception through February 2017.

Qualifications: Mr. Porges brings extensive business, leadership, management and financial experience, and tremendous knowledge of Equitrans Midstream's operations, culture and industry, to the Board. Mr. Porges served in a number of senior management positions with EQT, initially joining EQT as Senior Vice President and Chief Financial Officer in 1998. Prior to joining EQT, Mr. Porges held various senior positions within the investment banking industry and also held several managerial positions with Exxon Corporation (now Exxon Mobil Corporation, an international oil and gas company). Mr. Porges also served on the board of directors of Westport Resources Corp. (an oil and natural gas production company) (now part of Anadarko Petroleum Corporation), from April 2000 through 2004. Mr. Porges' strong financial and industry experience, along with his understanding of Equitrans Midstream's business operations and culture, enables him to provide unique and valuable perspectives on most issues facing the Company.

     
Norman J. Szydlowski Age 67 Director since November 2018

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Mr. Szydlowski served as a director of EQT Corporation from November 2017 until the Separation. Mr. Szydlowski served as President and Chief Executive Officer of SemGroup Corporation (SemGroup) (a publicly-traded midstream company that specializes in moving energy) from November 2009 through June 2014, and director of SemGroup from November 2009 through April 2014. Mr. Szydlowski served as a director of the general partner of 8point3 Energy Partners, LP (a publicly traded joint venture to own and operate solar generation assets) from June 2015 until its acquisition by Capital Dynamics, Inc. in June 2018. He also served as a director of the general partner of JP Energy Partners LP (a publicly-traded oil and natural gas company) from July 2014 through March 2017, a director of Transocean Partners, LLC (a publicly-traded offshore drilling contractor) from November 2014 through December 2016, and a director of the general partner of NGL Energy Partners LP (a publicly traded company specializing in transportation, storage, blending and marketing of crude oils, natural gas, refined products, renewables and water solutions) from November 2011 through April 2014.

Qualifications: Mr. Szydlowski's experience at SemGroup and before that as Chief Executive Officer of Colonial Pipeline Company (a refined pipeline system) and elsewhere provides him with significant executive and operational midstream experience. In particular, Mr. Szydlowski has a thorough understanding of master limited partnerships and midstream customers.

Mr. Szydlowski is Chair of the Health, Safety, Security and Environmental Committee and a member of the Compensation Committee.



   

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Robert F. Vagt Age 72 Director since November 2018

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Mr. Vagt served as a director of EQT Corporation from November 2017 until the Separation. Mr. Vagt currently serves as the Lead Independent Director of Equitrans Midstream. Mr. Vagt served as President of Davidson College (an independent liberal arts college) from July 1997 through August 2007, and served as President of The Heinz Endowments (a private philanthropic foundation) from January 2008 through January 2014. Mr. Vagt was a director of Rice Energy Inc. (Rice Energy), serving as that board's independent chair, chair of its Health, Safety and Environmental Committee, and a member of the Audit and Nominating and Governance Committees, from January 2014 through November 2017. From January 2014 to July 2018, Mr. Vagt also served on the board of directors of RMP's general partner, serving as board chair from December 2014 through November 2017. Mr. Vagt has served as a director of Kinder Morgan, Inc. (a publicly-traded energy infrastructure company) since May 2012, where he serves as a member of the Audit Committee and chair of its Environmental, Health and Safety Committee.

Qualifications: Prior to his service to The Heinz Endowments and Davidson College, Mr. Vagt had significant executive and operational oil and gas industry experience, having served as President and Chief Operating Officer of Seagull Energy Corporation (an oil and gas exploration and production company) from 1996 to 1997, as President, Chairman and Chief Executive Officer of Global Natural Resources (a producer of oil and natural gas) from 1992 to 1996 and as President and Chief Operating Officer of Adobe Resources Corporation (an oil and natural gas production company) from 1989 to 1992. Mr. Vagt also served as a director of El Paso Corporation (a provider of natural gas and related energy products) (now part of Kinder Morgan, Inc.) from May 2005 to 2012, where he was a member of the Compensation and Health, Safety and Environmental Committees. Mr. Vagt's professional background in both the public and private sectors makes him an important advisor and member of Equitrans Midstream's Board. Mr. Vagt brings to the Board operations and management expertise in both the public and private sectors. In addition, Mr. Vagt provides the Board with diversity of perspective gained from service as President of The Heinz Endowments, as well as from service as the President of Davidson College.

Mr. Vagt is a member of the Audit Committee, the Compensation Committee, and the Corporate Governance Committee.



   

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CORPORATE GOVERNANCE AND BOARD MATTERS

Board Meetings and Committees

The Board currently has four standing Committees: Audit, Management Development and Compensation (Compensation), Corporate Governance, and Health, Safety, Security and Environmental. The Board may from time to time form new Committees, disband an existing Committee and delegate additional responsibilities to a Committee. Our Committees report on their activities to the Board on a routine basis and also make recommendations regarding matters to be approved by the Board. The responsibilities of the Committees are included in written charters, which were developed in connection with the Separation and will be reviewed periodically by the Committees and the Board. All charters may be viewed on the Company's website at www.equitransmidstream.com by clicking on "Investors" on the main page and then on "Governance."

The Company does not have a formal policy of requiring its directors to attend the annual meeting, but encourages them to do so.

Following the November 12, 2018 Separation, our Board held three meetings, and each of our incumbent directors attended 75% or more of the aggregate meetings of our Board and the Committees on which he or she served. The following charts summarize each Committee's primary responsibilities, its membership and number of meetings held in 2018 following the Separation.

Audit Committee


Members
Kenneth M. Burke (Chair)
Margaret K. Dorman
Robert F. Vagt
 
Meetings Held in 2018:2

Primary Responsibilities:    The Audit Committee assists the Board by overseeing:

the accounting and financial reporting processes of the Company and related disclosure matters;
the audits of the Company's financial statements;
the integrity of the Company's financial statements;
the qualifications, independence, and performance of the Company's registered public accountants;
the qualifications and performance of the Company's internal audit function; and
compliance with legal and regulatory requirements, including with the Company's code of business conduct and ethics.

Independence:    Each member of the Committee is independent under the Company's corporate governance guidelines and applicable New York Stock Exchange (NYSE) listing standards and SEC rules. Each member of the Committee is financially literate. The Board has determined that each of Ms. Dorman and Messrs. Burke and Vagt qualify as an audit committee financial expert as defined under SEC rules. The designation as an audit committee financial expert does not impose any duties, obligations, or liabilities that are greater than those generally imposed upon a director who is a member of the Committee and the Board. As audit committee financial experts, Ms. Dorman and Messrs. Burke and Vagt also have accounting or related financial management experience under applicable NYSE listing standards.

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Management Development and Compensation Committee


Members
Margaret K. Dorman (Chair)
Norman J. Szydlowski
Robert F. Vagt
 
Meetings Held in 2018:1

Primary Responsibilities:    The Compensation Committee:

assists the Board in the discharge of its fiduciary responsibilities relating to agreements with, and the fair and competitive compensation of, the Company's Chief Executive Officer and other executive officers;
designs, administers and makes awards (or, as applicable, makes recommendations to the Board to make awards) under the Company's incentive compensation and equity-based plans;
provides oversight for and, as required, administers the Company's benefit plans; and
prepares a report for inclusion in the Company's proxy statement for the annual meeting of shareholders.

The Committee has the authority, in its sole discretion, to retain or obtain the advice of an independent compensation consultant, outside legal counsel or other personnel. It may also obtain advice and assistance from internal legal, accounting, human resources, and other advisors. Pursuant to its Charter, the Committee may delegate authority and responsibilities to subcommittees as it deems proper provided that no subcommittee shall consist of less than two members.

Independence:    Each member of the Committee must (i) meet the independence requirements of the NYSE or any other national securities exchange on which the securities of the Company are listed and applicable federal securities law, including the rules and regulations of the SEC, and (ii) satisfy the requirements of an outside director for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).

Corporate Governance Committee


Members
Vicky A. Bailey (Chair)
Kenneth M. Burke
Robert F. Vagt
 
Meetings Held in 2018:1

Primary Responsibilities:    The Corporate Governance Committee is responsible for:

establishing and recommending to the Board the requisite skills and characteristics to be found in individuals qualified to serve as directors;
identifying individuals qualified to become Board members consistent with criteria approved by the Board;
recommending to the Board the director nominees for each annual meeting of shareholders;
developing and recommending to the Board a set of corporate governance guidelines;
recommending Committee membership, including a Chair, for each Committee;
recommending an appropriate compensation structure for the directors, including administration of stock-based plans for the directors;
reviewing plans for management succession;
recommending director independence determinations to the Board; and
reviewing related person transactions under the Company's related person transaction approval policy.

Independence:    Each member of the Committee is independent under the Company's corporate governance guidelines and applicable NYSE listing standards.

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Health, Safety, Security and Environmental Committee


Members
Norman J. Szydlowski (Chair)
Vicky A. Bailey
Thomas F. Karam
 
Meetings Held in 2018:1

Primary Responsibilities:    The Health, Safety, Security and Environmental (HSSE) Committee:

provides input and direction to management and the Board about the Company's approach to health, safety, security (including cybersecurity), and environmental policies, programs and initiatives and reviews the Company's activities in those areas;
reviews the overall adequacy of, and provides oversight with respect to, HSSE policies, programs, procedures and initiatives of the Company, including, without limitation, the Company's emergency response preparedness;
reviews the Company's disclosures regarding the committee's role in the oversight of the Company's HSSE-related risk management; and
ensures that appropriate HSSE goals are in place and evaluates the Company's progress toward those goals.

Compensation Process

In discharging the Board's responsibilities relating to compensation of the Company's executive officers, the Compensation Committee recommends, and the Board approves, the target total direct compensation for named executive officers by establishing base salaries and setting short-term (bonus) and long-term incentive targets. This process includes consideration of the items discussed in more detail in our section titled "Compensation Discussion and Analysis — Determination of Target Compensation" below. When appropriate, the Compensation Committee may also provide certain limited perquisites and other benefits to executive officers and other key employees.

The Compensation Committee, with the approval of the Company's Board, establishes the plan designs and performance metrics for all of the Company's short-term and long-term incentive programs. The Compensation Committee also sets target and maximum metrics and related payouts under the Company's programs for executive officers and reviews the appropriateness of these for all Company personnel. After completion of the performance period, the Compensation Committee reviews actual performance in comparison to established metrics to determine the amount of short-term and long-term incentive awards earned for each executive officer and for Company personnel in total.

In connection with the Separation, the Compensation Committee retained the services of Mercer (US) Inc. (Mercer) as its independent consultant to aid the Compensation Committee in performing its duties. Representatives of Mercer provided the Compensation Committee with market data and counsel regarding executive officer compensation programs and practices, discussed in more detail in our "Compensation Discussion and Analysis" below. Representatives of Mercer do not make recommendations on, or approve, the amount of compensation for any executive officer. The Company has affirmatively determined that no conflict of interest has arisen in connection with the work of Mercer as compensation consultant for the Compensation Committee.

The Company's compensation process includes discussions among the Compensation Committee, other independent directors of the Board, management and Mercer. The Compensation Committee always seeks approval of the Board with respect to the total direct compensation for each named executive officer.

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Certain executive officers may review information with the Compensation Committee during meetings and may present management's view or recommendations. The Compensation Committee evaluates these recommendations generally in consultation with its independent compensation consultant, and takes them into consideration when making the Compensation Committee's decisions and recommendations. When establishing total direct compensation for executive officers and reviewing actual performance against established metrics, the Compensation Committee considers the Chief Executive Officer's compensation recommendations. The Chief Executive Officer does not participate in Compensation Committee or Board deliberations about his compensation.

The Compensation Committee has delegated limited authority to Mr. Karam, in his capacity as a director of the Company, to issue special bonus payments and grant certain long-term incentive awards. These awards must follow established guidelines and are reviewed by the Compensation Committee on a quarterly basis.

The Compensation Committee has approved a pre-established basket to provide for off-cycle awards to new hires eligible for an award under the 2018 Equitrans Midstream Corporation Long-Term Incentive Plan (ETRN LTIP). The guidelines are as follows:

    Individuals hired after the annual grant date that would have qualified for a grant may be awarded restricted shares or units in an amount not to exceed the median target for the position. Under this limited authorization, individual grants may not exceed $75,000 and would not apply to newly hired executive officers or direct reports of the Chief Executive Officer.
    The aggregate award value of all awards as of the date of any grant may not exceed $725,000.

The Compensation Committee has also approved a pre-established basket to provide for CEO Awards, Retention Awards, and Discretionary New Hire Awards to individuals other than executive officers and direct reports of the Chief Executive Officer. The guidelines are as follows:

    CEO Awards may be made to employees on the condition that no award exceeds $5,000 per employee per grant and the employee did not receive a long-term incentive grant in connection with the current year annual grant process.
    Retention Awards may be made to employees who have received a long-term incentive grant in the past on the condition that no award exceeds $25,000 per employee per grant.
    Discretionary New Hire Awards may be made to newly hired employees not otherwise entitled to a new hire award discussed above on the condition that no award exceeds $25,000 per employee per grant.
    In each case, the aggregate award value of all awards granted as of the date of any grant may not exceed $200,000.

The Compensation Committee has not delegated its authority to award equity to any other executive officer or CEO direct report.

We provide additional information regarding the Compensation Committee and our policies and procedures regarding executive compensation below under the caption "Compensation Discussion and Analysis."

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Board Leadership Structure

As described in the Company's corporate governance guidelines, the Board of Directors believes that the functions of the Chairman of the Board are distinct from those of the Chief Executive Officer but that both functions may be effectively performed by the same individual. From time to time, generally in connection with succession planning, the Board will consider whether the Chairman and the Chief Executive Officer should be separate, and if separate, whether the Chairman should be an outside director or an inside director. In connection with the Separation, in November 2018, Mr. Porges was appointed as Chairman. The Board believes that having a separate Chairman is the most effective leadership structure following the Separation, enabling Mr. Karam to focus on operations and strategy while providing for robust board oversight. The Board may at some point conclude that combining the functions of Chairman and Chief Executive Officer is the most effective leadership structure.

Under the Company's corporate governance guidelines, when the Board does not have an independent Chairman, the Board must designate an independent director as the Lead Independent Director. The Lead Independent Director's exclusive duties are described in the box on this page.

A Lead Independent Director's term is generally for one year, but an individual may serve multiple consecutive terms as our Lead Independent Director if recommended by the Corporate Governance Committee and approved by the Board.

Robert F. Vagt was appointed to serve as Lead Independent Director of the Board in November 2018 to serve until the 2019 annual meeting of shareholders.

Our Lead Independent Director:

convenes, presides over and sets agendas for regularly scheduled and special executive sessions of independent/non-management directors (which typically occur at each regularly scheduled meeting of the Board), and calls a meeting of the independent/non-management directors, if requested by any other director;

presides over any meeting at which the Chairman is not present;

consults with the Chairman to set the annual calendar of topics to be covered at Board meetings and reviews meeting agendas;

facilitates an assessment process with respect to the Board as a whole as well as for individual directors; and

serves as the designated director to speak with shareholders (when requested) and to receive communications from interested parties.

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Board's Role in Risk Oversight

The Board

Reviews the major risks facing the Company and delegates oversight of certain major risks to applicable Board Committees
Reviews the options for mitigating major risks facing the Company
     
Audit Committee

Discusses the Company's process for assessing major risk exposures and the policies management has implemented to monitor and control such exposures, including the Company's financial risk exposures, including financial statement risk and such other risk exposures as may be delegated by the Board to the Committee for oversight, and the Company's risk management policies

Reviews the integrity of the Company's financial statements

Reviews the qualifications, independence and performance of the Company's registered public accountants

Reviews the qualifications and performance of the Company's internal audit function

  Corporate Governance Committee

Addresses governance of the Company, including its director compensation structure, that is in full compliance with law, reflects good corporate governance, encourages flexible and dynamic management without undue burdens and effectively manages the risks of the business and operations of the Company

Identifies board members of the highest possible caliber to provided insightful, intelligent, effective guidance to management

Reviews plans for management succession

Reviews periodically and makes such recommendations regarding the Company's risks as may be delegated to the Committee by the Board

     
     
Management Development and Compensation Committee

Oversees the performance of an annual risk assessment of the Company's compensation policies and practices

Reviews periodically and makes recommendations regarding the Company's risks as may be delegated to the Committee by the Board

  Health, Safety, Security and Environmental Committee

Provides input and direction to management and the Board about the Company's approach to HSSE policies, programs and initiatives, and reviews the Company's activities in those areas

Reviews the overall adequacy of, and provides oversight with respect to, HSSE policies, programs, procedures and initiatives of the Company

Reviews periodically and makes recommendations regarding the Company's risks as may be delegated to the Committee by the Board

     

Management

    Certain executive officers and other members of management who oversee day-to-day risk management meet periodically throughout the year to review, prioritize and address the Company's major risk exposures and consider new or emerging risks, the results of which are reported to the Board on a regular basis.

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Director Nominations

The responsibilities of the Corporate Governance Committee include identifying and recommending to the Board for approval the requisite skills and characteristics to be found in individuals who will serve as members of the Board. The Committee strives to ensure that the Board consists of individuals from diverse educational and professional experiences and backgrounds who, collectively, provide meaningful counsel to management. The Corporate Governance Committee reviews the qualifications and backgrounds of the directors, as well as the overall composition of the Board, and recommends to the Board for approval the slate of directors to be recommended for nomination for election at our annual meeting of shareholders.

When assessing new director candidates for nomination, regardless of who recommends the candidate for consideration, the Corporate Governance Committee will consider the background, diversity, personal characteristics and business experience of the candidate against the ideal attributes identified below. Candidates generally possessing these attributes are further evaluated in light of the current needs of the Company to determine the appropriate fit in light of overall Board composition. The Corporate Governance Committee will review the attributes from time to time and recommend revisions for approval by the Board as the Corporate Governance Committee considers appropriate.

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As indicated in the Corporate Governance Committee's charter, the Corporate Governance Committee will consider, in its normal course, submissions from shareholders in making its recommendations for director nominees. Any shareholder desiring to recommend an individual to serve as a director of the Company should submit the information listed below to the Corporate Governance Committee Chair, care of the Corporate Secretary. The Corporate Governance Committee will consider recommendations received no earlier than the close of business on February 12, 2020 and no later than the close of business on March 13, 2020.

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A submitting shareholder must provide the following:

    The information required by Sections 1.09 and 1.10 of the Company's bylaws (a copy of which will be provided to any shareholder upon written request to the Corporate Secretary), including, but not limited to, (i) the proposing person's timely written notice; (ii) the nominee's written questionnaire with respect to the background and qualifications of such nominee and the background of any other person or entity on whose behalf the nomination is being made; (iii) a written representation and agreement of the nominee in the form provided by the Corporate Secretary; and (iv) the nominee's executed irrevocable conditional resignation letter.

    Updates and supplements to any information previously submitted to the Corporate Secretary.

    In addition, the Company may require the shareholder to provide such further information as the Company may reasonably request.

Please see "Corporate Secretary Contact Information" under the caption "Additional Information" on page 61.

Contacting the Board

Interested parties may communicate directly with the Lead Independent Director (and with independent directors, individually or as a group, through the Lead Independent Director) by sending an email
to ETRNPresidingDirector@equitransmidstream.com. You may also write to the Lead Independent Director, the entire Board, any Board Committee, or any individual director by addressing such communication to the applicable director or directors, care of the Corporate Secretary, at Equitrans Midstream Corporation, 625 Liberty Avenue, Suite 2000, Pittsburgh, Pennsylvania 15222. The Corporate Secretary will open the communication and promptly deliver it to the Lead Independent Director or the named director, unless the communication is junk mail or a mass mailing.
 
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Governance Principles

The Company maintains a corporate governance page on its website that includes key information about its corporate governance practices, including its corporate governance guidelines, code of business conduct and ethics, and charters for the Audit Committee, the Compensation Committee, the Corporate Governance Committee, and the Health, Safety, Security and Environmental Committee. The corporate governance page can be found at www.equitransmidstream.com, by clicking on the "Investors" link on the main page and then on the "Governance" link. The Company will provide copies of its corporate governance guidelines, code of business conduct and ethics, and any of the Board Committee charters upon request by a shareholder to the Corporate Secretary. See "Corporate Secretary Contact Information" under the caption "Additional Information."

The Board is committed to strong corporate governance practices. Through the Corporate Governance Committee, the Board monitors its corporate governance policies and practices against evolving best practices. Below are highlights of some of our corporate governance policies and practices.

Corporate Governance Highlights

The Board has adopted corporate governance guidelines

Our directors are elected annually for a term of one year

We have a Lead Independent Director with defined duties

We have a non-management Chairman

Five of the seven members of the Board are independent of the Company and its management

The Board's independent/non-management directors meet regularly in executive session, and the Lead Independent Director presides over and sets the agenda for sessions of the independent/non-management directors

All members of each of the Audit, Compensation, and Corporate Governance Committees are independent of the Company and its management

Each of the Audit, Compensation, and Corporate Governance Committees has a charter that meets applicable legal requirements and reflects good corporate governance

The Health, Safety, Security and Environmental Committee has a charter that reflects good corporate governance

The Board and each of the Audit, Compensation, Corporate Governance and Health, Safety, Security and Environmental Committees will engage in annual self-assessments

The Company's directors are encouraged to participate in educational programs relating to corporate governance and business-related issues, and the Company provides funding for such activities

The Company has a code of business conduct and ethics applicable to all employees and directors of the Company

Our bylaws require that any nominee for election to the Board who does not receive a majority of the votes cast in favor of that director's election to the Board in an uncontested election must tender his or her resignation to the Board

The Company has robust equity ownership requirements for executive management and the members of the Board

A director may not be nominated for re-election to our Board after the director has 12 years of service on our Board or reaches the age of 76

Our bylaws provide that shareholders meeting certain requirements may submit candidates for director to be included in our proxy statement

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Shareholder Engagement

We value feedback from our shareholders and are committed to engaging in an active dialogue with our shareholders year-round. Our management team spent a significant amount of time meeting and speaking to our shareholders before and after the Separation. We welcome feedback from our shareholders and strive to maintain the best governance, compensation, and oversight practices.

Independence and Related Person Transactions

Director Independence

The NYSE listing standards and our governance documents require a majority of our directors and each member of our Audit, Compensation, and Corporate Governance Committees to be independent. For a director to be considered independent, the Board must annually determine that he or she has no material relationship with the Company except as a director. To assist it in determining director independence, the Board established guidelines that meet or exceed the independence requirements under the NYSE listing standards, and which are included in our corporate governance guidelines found on the Company's website at www.equitransmidstream.com.

The Board considers all relevant facts and circumstances in making an independence determination. Any relationship involving a Company director that complies with the independence standards included in our corporate governance guidelines and is not otherwise a related person transaction under the Company's related person transaction approval policy (the related person transaction policy) is deemed to be an immaterial relationship not requiring consideration by the Board in assessing independence. In February 2019, our Board, in coordination with our Corporate Governance Committee, made an independence determination for each of our directors and director nominees and affirmatively determined that all of our directors and director nominees are independent, other than Messrs. Karam and Porges.

Director ownership of Company stock is encouraged and is not in itself a basis for determining that a director is not independent, provided that such ownership may preclude participation on the Audit Committee if its magnitude is sufficient to make the director an affiliated person of the Company as described in the Audit Committee charter. See "Equity-Based Compensation" under the caption "Directors' Compensation" below for a description of the equity ownership guidelines for directors.

Review, Approval or Ratification of Transactions with Related Persons

Our Board has adopted a related person transaction policy. Under the policy, it is the responsibility of the Corporate Governance Committee to review Related Person Transactions (as defined below) not otherwise approved by the Board. Company management, with the assistance of the Company's legal department, is responsible for determining whether a transaction between the Company and a Related Person (as defined below) constitutes a Related Person Transaction. This determination is based on a review of the facts and circumstances regarding the transaction, including information provided in annual director and executive officer questionnaires. If it is determined that a transaction is a Related Person Transaction that has not been approved by the Board, the material facts regarding the transaction are reported to the Corporate Governance Committee for its review. The Corporate Governance Committee then determines whether to approve, ratify, revise, reject, or take other action with respect to the Related Person Transaction.

Under the related person transaction policy, a Related Person Transaction is generally a transaction in which the Company or a subsidiary is a participant, the amount involved exceeds $120,000, and a Related Person has a direct or indirect material interest. A Related Person is generally any person who is a director or executive officer of the Company, any nominee for director, any shareholder known to the Company to be the beneficial owner of more than 5% of any class of the Company's voting securities, and any immediate family member (as defined by the SEC) of any of the foregoing persons.

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Under the policy, the following transactions are deemed to be automatically pre-approved and do not need to be brought to the Corporate Governance Committee for individual approval:

    transactions involving employment of an executive officer by the Company, as long as the executive officer is not an immediate family member of another executive officer or director of the Company and the compensation paid to the executive officer was approved by the Compensation Committee;

    transactions involving compensation and benefits paid to a director for service as a director of the Company;

    transactions on competitive business terms with another company in which the only relationship of a director or immediate family member of a director is as (i) an employee or executive officer, (ii) a director, or (iii) a beneficial owner of less than 10% of that company's shares, provided that the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of the other company's consolidated gross revenue;

    transactions where the interest of the Related Person arises solely from the ownership of a class of equity securities of the Company, and all holders of that class of equity securities receive the same benefit on a pro-rata basis (e.g., payment of dividends);

    transactions where the rates or charges involved are determined by competitive bids;

    transactions involving the rendering of services as a common or contract carrier or public utility at rates or charges fixed in conformity with law or governmental regulation;

    transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services; and

    charitable contributions, grants or endowments by the Company or the Company's charitable foundation to a charitable or non-profit organization, foundation or university in which a Related Person's only relationship is as an employee or a director or trustee, if the aggregate amount involved does not exceed the greater of $1,000,000 or 2% of the recipient's consolidated gross revenue.

The related person transaction policy does not limit or affect the application of the Company's code of business conduct and ethics and related policies, which require directors and executive officers to avoid engaging in any activity or relationship that may interfere, or have the appearance of interfering, with the performance of the directors' or executive officers' duties to the Company. Such policies require all directors and executive officers to report and fully disclose the nature of any proposed conduct or transaction that involves, or could involve, a conflict of interest and to obtain approval before any action is undertaken.

Related Person Transactions with Directors and Executive Officers

No reportable transactions between the Company and any of its directors or executive officers occurred during 2018, and there are no such proposed transactions.

Related Person Transactions with EQT and EQM

A discussion of related person transactions with EQT and EQM is attached on Appendix A.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation Committee has served as an officer or employee of Equitrans Midstream at any time. During 2018, no Equitrans Midstream executive officer served as a member of the compensation committee or on the board of directors of any company at which a member of Equitrans Midstream's Compensation Committee or Board of Directors served as an executive officer.

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DIRECTORS' COMPENSATION

The Corporate Governance Committee reviews and the Board approves director compensation on an annual basis. No compensation is paid to employee directors for their service as directors. Compensation for our non-employee directors during 2018 was established by our former parent, EQT, prior to the Separation and consisted of a mix of cash and equity-based compensation. At the effective time of the Separation, our Board approved the continuation of the same level of cash compensation for non-employee directors for the 2018 calendar year. Following the Separation, the Corporate Governance Committee engaged Mercer to review director compensation. Mercer performed a review of the compensation paid to our non-employee directors relative to a group of peer companies identified by Mercer and approved by the Corporate Governance Committee. In light of the non-employee directors' roles and responsibilities and after considering director compensation at relevant peer group companies, Mercer recommended the following non-employee director cash and equity-based compensation, which was approved by our Board for the 2019 calendar year.

Compensation Feature   2018 (1)   2019
Annual cash retainer – Board member   $85,000   $100,000
Annual cash retainer – Committee Chair   Audit: $25,000

Compensation: $15,000

All other Committees: $15,000

  $20,000

$20,000

$15,000

Annual cash retainer – Committee member (excluding the chair)   Audit: $10,000

Corporate. Governance,
Compensation, HSSE:
$5,000

  $7,500

None

Annual retainer – Chairman of the Board and Lead Independent Director   None   $25,000
Meeting fees   None   None
Deferred stock units   3,430 stock units   7,500 stock units
(1)
The 2018 cash retainer compensation paid by the Company was prorated from the Separation date through December 31, 2018.

Equity-Based Compensation

Pre-Separation stock awards.  EQT granted each non-employee director, on an annual basis, stock units under EQT's directors' deferred compensation plans that vested upon award and will be payable upon termination of service as a director of Equitrans Midstream, which are referred to herein as deferred stock units. Each deferred stock unit was equal in value to one share of EQT common stock and does not have voting rights. Dividends are credited quarterly in the form of additional deferred stock units. Pursuant to the terms of the Separation, each outstanding EQT deferred stock unit was converted into an award in respect of both shares of EQT common stock and shares of the Company's common stock. The number of shares of EQT common stock subject to each outstanding award is the same as the number subject to the award prior to the Separation, while the number of shares of Company common stock subject to the award was determined based on the number of the Company shares distributed in connection with the Separation.

Equitrans Midstream stock awards.  The Company expects to grant each non-employee director, on an annual basis, stock units under Equitrans Midstream's directors' deferred compensation plan. Each deferred stock unit vests upon award, will be payable upon termination of service as a director of Equitrans Midstream and is referred to herein as deferred stock units. Each deferred stock unit is equal in value to one share of Equitrans Midstream common stock and does not have voting rights. Dividends are credited quarterly in the form of additional deferred stock units.

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Newly elected non-employee directors of Equitrans Midstream are generally expected to receive an equity grant upon joining the Board equal to the pro-rata amount of the then applicable annual grant.

Deferred Compensation

Pre-Separation Directors' Deferred Compensation.  Under the terms of the EQT deferred compensation plans for non-employee directors, in addition to the automatic deferral of stock units awarded, non-employee directors were eligible to elect to defer up to 100% of their retainers and fees into the 2005 Directors' Deferred Compensation Plan and receive an investment return on the deferred funds as if the funds were invested in EQT common stock or permitted mutual funds. Prior to the deferral, plan participants were required to irrevocably elect to receive the deferred funds either in a lump sum or in equal annual installments. Deferred funds for which directors elected to receive an investment return as if the funds were invested in EQT common stock were payable in shares of EQT common stock. Distributions were to be made or commence following termination of service as a director. Mr. Szydlowski deferred fees under the plan in 2018 prior to the Separation.

Equitrans Midstream Directors' Deferred Compensation.  Prior to the Separation, the Company established the Equitrans Midstream Corporation Directors' Deferred Compensation Plan with substantially the same terms as the EQT non-employee director compensation program immediately prior to the Separation. Each Company non-employee director who served on the EQT board of directors immediately prior to the Separation and held a deferred compensation balance under the EQT 2005 Directors' Deferred Compensation Plan was credited with such deferred compensation balance under the Equitrans Midstream Corporation Directors' Deferred Compensation Plan and ceased participation in the EQT plan with respect to future accruals; however, any phantom equity awards in respect of EQT common stock held by such director remained under the EQT plan.

Under the Equitrans Midstream Corporation Directors' Deferred Compensation Plan, in addition to the automatic deferral of stock units awarded, non-employee directors are permitted to elect to defer up to 100% of their retainers and any fees into the plan and receive an investment return on the deferred funds as if the funds were invested in Company common stock or permitted mutual funds. Prior to the deferral, plan participants are required to irrevocably elect to receive the deferred funds either in a lump sum or in equal annual installments. Deferred funds for which directors have elected to receive an investment return as if the funds were invested in Company common stock will be distributed in shares of Company common stock. Distributions will be made or, if applicable, commence following termination of service as a director. The directors' deferred compensation accounts are unsecured obligations of the Company. Mr. Szydlowski deferred fees under the Equitrans Midstream Corporation Directors' Deferred Compensation Plan after the Separation.

Equity Ownership Guidelines

The non-employee directors are subject to equity ownership guidelines which require them to hold shares (or share equivalents, including deferred stock units) with a value equal to five times the annual cash retainer. Under the guidelines, directors have up to five years from joining the Board to acquire a sufficient number of shares (or share equivalents, including deferred stock units) to meet the ownership guidelines. In addition to Company equity, EQM units count toward satisfying the equity ownership requirement. Each of the Company's non-employee directors satisfies the equity ownership guidelines or is within the five-year grace period.

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Other

    All directors are eligible to participate in the Matching Gifts Program of the Equitrans Midstream Foundation on the same terms as Company employees. Under this program, the Equitrans Midstream Foundation will match gifts of at least $100 made by a director to eligible charities, up to an aggregate total of $50,000 per director in any calendar year.

    The Company reimburses directors for their travel and related expenses in connection with attending Board and Committee meetings and related activities. The Company also provides non-employee directors with $20,000 of life insurance and $250,000 of travel accident insurance while traveling on business for the Company.

2018 Directors' Compensation Table

The table below shows the total 2018 compensation of the Company's non-employee directors. The majority of these amounts were paid by EQT before the Separation to compensate directors who at the time served on the EQT Corporation board of directors.

Name


Fees Earned or
Paid in Cash
($) (1)



Stock
Awards
($) (2)



All Other
Compensation
($) (3)



Total ($)

Ms. Bailey

$ 88,981 $ 256,401 $12,544 $ 357,926

Mr. Burke

$ 90,313 $ 256,401 $83,929 $ 430,642

Ms. Dorman

$ 85,897 $ 256,401 $44 $ 342,342

Mr. Karam(4)

Mr. Porges

$ 11,318 $ 150,140 $50,000 $ 211,458

Mr. Szydlowski

$ 77,731 $ 256,401 $19,071 $ 353,203

Mr. Vagt

$ 80,815 $ 256,401 $265,689 $ 602,905
(1)
Includes annual cash retainers, meeting fees and committee chair fees, some of which have been deferred at the election of the director.

(2)
This column reflects the aggregate grant date fair values determined in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718 for the deferred stock units awarded to each director during 2018. On January 1, 2018, EQT granted 3,430 deferred stock units with a grant date fair value of $195,236 to each non-employee director serving at that time. The grant date fair value is computed as the number of deferred stock units awarded on the grant date multiplied by the closing stock price of EQT's common stock on December 29, 2017, the business day prior to the grant date, of $56.92. On December 12, 2018, Equitrans Midstream granted 6,980 deferred stock units with a grant date fair value of $150,140 to each non-employee director serving at that time. The grant date fair value is computed as the number of deferred stock units awarded on the grant date multiplied by the closing stock price of Equitrans Midstream's common stock on December 12, 2018, the grant date, of $21.51. The aggregate number of Equitrans Midstream deferred stock units, including accrued dividends thereon, held at December 31, 2018 was: Ms. Bailey — 36,901; Mr. Burke 22,190; Ms. Dorman — 22,190; Mr. Karam — 3,053; Mr. Porges — 6,980; Mr. Szydlowski — 10,033; and Mr. Vagt — 10,033. Additionally, the directors held the following EQT Corporation deferred stock units, including dividends thereon, at December 31, 2018: Ms. Bailey — 37,461; Mr. Burke 19,043; Ms. Dorman — 19,043; Mr. Karam — 3,823; Mr. Szydlowski — 3,823; and Mr. Vagt — 3,823. See "Equity-Based Compensation" above for the treatment of the directors' equity awards in connection with the Separation.

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(3)
This column reflects (i) annual premiums paid for life insurance and travel accident insurance policies ($43.88 per director); (ii) the following matching gifts made to qualifying organizations under the EQT Foundation's Matching Gifts Program: Ms. Bailey — $12,500; Mr. Porges — $50,000; Mr. Szydlowski — $19,027; and Mr. Vagt — $50,000; (iii) the following matching gifts made to qualifying organizations under the Equitrans Midstream Foundation's Matching Gifts Program: Mr. Szydlowski — $5,000; (iv) with respect to Mr. Burke, compensation for his services as a director of EQM ($40,375, which includes fees of $18,623 and a grant of an equity award valued at $22,092) and compensation for his services as a director of EQGP ($43,179, which includes fees of $20,625 and a grant of an equity award valued at $22,540); and (v) with respect to Mr. Vagt, compensation for his services as a director of RMP ($215,667, which includes fees of $50,625 and a grant of an equity award valued at $165,020). Prior to the Separation, the non-employee directors were permitted to use a de minimis number of tickets purchased by EQT to attend sporting or other events when such tickets were not otherwise being used for business purposes. The use of such tickets did not result in any incremental costs to the Company.

(4)
Mr. Karam's compensation for his services as a director of EQT in 2018 is reflected in the "Other" column of the Summary Compensation Table found on page 37 herein. Mr. Karam received no compensation for his service as a director of the Company in 2018.

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EQUITY OWNERSHIP

Stock Ownership of Significant Shareholders

The following shareholders reported to the SEC that they owned more than 5% of the Company's outstanding common stock as of December 31, 2018:

Name and Address


Shares
Beneficially
Owned



Percent of
Common
Stock
Outstanding




EQT Corporation
625 Liberty Avenue, Suite 1700
Pittsburgh, PA 15222

50,599,503 (1) 19.9 %

BlackRock, Inc.
55 East 52nd Street
New York, NY 10055

19,633,390 (2) 7.7 %

The Vanguard Group
100 Vanguard Boulevard
Malvern, PA 19355

18,796,741 (3) 7.39 %

T. Rowe Price Associates, Inc.
100 E. Pratt Street
Baltimore, MD 21202

17,187,504 (4) 6.7 %
(1)
Information based on Schedule 13G filed with the SEC on January 31, 2019 reporting that EQT owned 50,599,503 shares. In connection with the Separation, EQT and the Company entered into a Registration Rights Agreement, pursuant to which EQT granted to the Company a proxy to vote the shares of Company common stock owned by EQT immediately after the Separation in proportion to the votes cast by the Company's other shareholders. As a result, EQT does not exercise voting power over any of the shares of Company common stock that it beneficially owns.
(2)
Information based on Schedule 13G filed with the SEC on February 8, 2019, reporting that BlackRock, Inc. has sole voting power over 18,508,137 shares, and sole dispositive power over 19,633,390 shares.
(3)
Information based on Schedule 13G filed with the SEC on February 11, 2019, reporting that The Vanguard Group has sole voting power over 102,463 shares, sole dispositive power over 18,678,269 shares, shared voting power over 36,986 shares, and shared dispositive power over 118,472 shares.
(4)
Information based on Schedule 13G filed with the SEC on February 14, 2019, reporting that T. Rowe Price Associates, Inc. has sole voting power over 5,948,500 shares, and sole dispositive power over 17,155,503 shares.

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Equity Ownership of Directors and Executive Officers

The tables below provide the number of shares of Company common stock and EQM common units beneficially owned by the Company's directors and named executive officers and all directors and executive officers of the Company as a group as of April 12, 2019, determined under SEC rules, which include Company shares and EQM common units they had the right to acquire within 60 days after April 12, 2019. At the close of business on April 12, 2019, Equitrans Midstream had 255,014,730 shares of common stock outstanding and EQM had 200,457,630 common units outstanding. Under SEC rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or to direct the voting of a security, or investment power, which includes the power to dispose of or to direct the disposition of a security. Except as indicated by footnote, the persons named below have sole voting and investment power with respect to all Company common stock and EQM common units beneficially owned by them, subject to community property laws where applicable. None of the Company common stock or the EQM common units are subject to a pledge.

Equitrans Midstream Common Stock

Name




Common
Stock (1)






Exercisable
Stock
Options
(2)








Total
Shares
Beneficially
Owned




Percent of
Class (3)

Non-Employee Directors:

                     

D.L. Porges(4)

    520,706     299,180     819,886   *

V.A. Bailey

    28,193         28,193   *

K.M. Burke

    32,193         32,193   *

M.K. Dorman

    33,443         33,443   *

N.J. Szydlowski

    23,057         23,057   *

R.F. Vagt

    37,068         37,068   *

Executive Officers:

                     

T.F. Karam

    397,473         397,473   *

D.M. Charletta(5)

    55,026         55,026   *

K.R. Oliver(6)

    20,934         20,934   *

C. Petrelli(7)

    51,420     45,045     96,465   *

R.C. Williams

    17,025         17,025   *

P.D. Swisher

    8,210         8,210   *

Directors and executive officers as a group: (12 individuals)

    1,224,748     344,225     1,568,973   *
*
Indicates ownership or aggregate voting percentage of less than 1%.

(1)
This column reflects shares held of record and shares owned through a bank, broker or other nominee, including shares owned through a 401(k) plan. For the directors, this column includes deferred stock units, including accrued dividends, to be settled in Company common stock, and over which the directors have no voting or investment power prior to settlement, in the following amounts: Mr. Porges — 14,803 units; Ms. Bailey — 28,193 units; Mr. Burke — 28,193 units; Ms. Dorman — 28,193 units; Mr. Karam — 3,053 units; Mr. Szydlowski — 17,924 units; and Mr. Vagt — 17,924 units. For Messrs. Porges and Szydlowski, this column also includes 1,428 and 5,133 deferred stock units, respectively, including accrued dividends, that will be settled in common stock in connection with the deferral of director fees, over which Messrs. Porges and Szydlowski have sole investment but no voting power prior to settlement.
(2)
This column reflects the number of shares of Company common stock that the executive officers and directors had a right to acquire within 60 days after April 12, 2019 through the exercise of stock options.
(3)
This column reflects for each of the named executive officers and directors, as well as all executive officers and directors as a group, the total Equitrans Midstream shares beneficially owned as a percentage of the sum of the Company's outstanding shares at April 12, 2019, all options exercisable by the executive officer and director group within 60 days of April 12, 2019, and all deferred stock units that will be settled in Company common stock upon termination of the directors' service.

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(4)
Shares beneficially owned include 40,000 shares that are held in a trust of which Mr. Porges is a co-trustee and in which he shares voting and investment power.
(5)
Shares beneficially owned include 8,219 shares owned by Ms. Charletta's husband, of which 59 shares are held in Ms. Charletta's husband's 401(k) plan account.
(6)
Shares beneficially owned include 4,950 shares that are held in a trust of which Mr. Oliver is a co-trustee and in which he shares voting and investment power.
(7)
Information regarding Company shares beneficially owned by Ms. Petrelli is based on information provided by Ms. Petrelli as of January 2, 2019.

EQM Common Units

Name






Common
Units
Beneficially
Owned (1)(2)




Percentage of
Common Units
Beneficially
Owned

Non-Employee Directors:

         

D.L. Porges

    42,148   *

V.A. Bailey

    1,000   *

K.M. Burke

    2,463   *

M.K. Dorman

    11,000   *

N.J. Szydlowski

     

R.F. Vagt

    2,961   *

Executive Officers:

         

T.F. Karam

     

D.M. Charletta(3)

    3,246   *

K.R. Oliver

     

C. Petrelli(4)

    18,130   *

R.C. Williams

     

P.D. Swisher

    1,790   *

Directors and executive officers as a

         

group:(12 individuals)

    82,738   *
*
Indicates ownership or aggregate voting percentage of less than 1%.

(1)
This column reflects common units held of record and units owned through a broker, bank or other nominee.
(2)
For Mr. Burke, this column includes 2,463 phantom units, including accrued distributions, to be settled in EQM common units.
(3)
Common units beneficially owned include 1,000 common units held by Ms. Charletta's husband, over which Ms. Charletta has shared voting and investment authority.
(4)
Information regarding EQM common units beneficially owned by Ms. Petrelli is based on information provided by Ms. Petrelli as of January 2, 2019.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended (Exchange Act), requires our directors, executive officers, and anyone holding 10% or more of a registered class of our equity securities (reporting persons) to file reports with the SEC showing their holdings of, and transactions in, these securities. Based solely on a review of copies of such reports, and written representations from each reporting person that no other reports are required, we believe that for 2018 all reporting persons filed the required reports on a timely basis under Section 16(a), except that on February 8, 2019, Mr. Swisher filed a late Form 4 amendment related to a single transaction of 521 restricted stock units that were not reported on Mr. Swisher's initial Form 4 filed on November 12, 2018 in connection with the Separation due to an administrative error at the Company.

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EXECUTIVE COMPENSATION INFORMATION

COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis (CD&A) describes the objectives, principles and components of the material elements of compensation for the Company's named executive officers, as determined by EQT prior to the Separation on November 12, 2018 and by the Company following the Separation. Because the Separation did not occur until November, most of the compensation for the Company's named executive officers in 2018 was determined prior to the Separation under the historical compensation philosophy, programs and practices of EQT. This CD&A addresses the pre-Separation decisions made by EQT as well as the impact of the Employee Matters Agreement on named executive officer compensation. In addition, this CD&A describes the decisions made by our newly formed Management Development and Compensation Committee following the Separation on November 12, 2018 that impact both 2018 and 2019 compensation.

Named Executive Officers

For 2018, the Company's named executive officers were:

      Thomas F. Karam, President and Chief Executive Officer;

      Kirk R. Oliver, Senior Vice President and Chief Financial Officer;

      Diana M. Charletta, Executive Vice President and Chief Operating Officer;

      Phillip D. Swisher, Vice President and Chief Accounting Officer;

      Robert C. Williams, Vice President and General Counsel; and

      Charlene Petrelli, Former Senior Vice President and Chief Administrative Officer

These named executive officers received compensation for their services only from, prior to the Separation, EQT, and following the Separation, the Company. EQT and the Company have allocated a portion of their compensation costs to EQGP, EQM and RMP, as applicable, in accordance with agreements with those partnerships. This proxy statement sets forth the combined compensation paid by both EQT and the Company to each of the named executive officers.

Prior filings with the SEC, including but not limited to, the Employee Matters Agreement by and between the Company and EQT (described below), include additional information regarding the effect of the Separation on each component of compensation.

Executive Summary

Compensation Philosophy: Pay for Performance & Commitment to Core Values

The 2018 compensation programs were designed by EQT pursuant to EQT's compensation philosophy. Accordingly, the following discussion is largely a review of those programs implemented and compensation decisions made prior to the Separation.

Subsequent to the Separation, the Equitrans Midstream board formed a Management Development and Compensation Committee. Prior to their first formal meeting in December 2018, the Committee had a number of meetings, conference calls and consultations with management, other independent directors and the independent compensation consultant (both prior to and following the Separation) which led to a significant re-design of the Company's compensation philosophy and programs for the 2019 fiscal year.

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The Company's core values include a commitment to safety, integrity, collaboration, transparency and excellence, and its executive compensation program is intended to promote achievement consistent with these values. The Company's executive compensation program is designed to:

      attract and retain the highest quality named executive officers;

      align the interests of the Company's named executive officers with the interests of its shareholders by directly linking executive pay to Company performance;

      directly support the Company's strategic plan by focusing employee performance on specific drivers; and

      be market-based and premised upon an informed review of industry compensation practices.

In summary, the Company's compensation program links pay with performance by rewarding our named executive officers when the Company achieves strong financial and operational results.

2018 Company Performance Highlights

In 2018, the Company achieved the following performance highlights:

      Successful integration of Rice Energy Inc. midstream assets

      Consummation of the merger of EQM Midstream Partners, LP and Rice Midstream Partners LP

      Successful acquisition of the Olympus and Strike Force gathering systems from affiliates of EQT and Gulfport Energy Corporation

      Successful consummation of EQM's $2.5 billion senior notes offering

      Successfully upsizing EQM's revolving credit facility to $3 billion

      Reduction of gathering unit cost rate 2% more than business plan

      Achievement of 98% availability for compression equipment

      Consummation of the purchase of EQGP common units and the exercise of the limited call right to acquire all outstanding EQGP common units

      Successful consummation of the Separation

Components of Executive Compensation

In 2018, as reported by EQT, the compensation of our executive officers consisted of the following four primary components, which were established by EQT prior to the Separation:

    EQT Compensation
Component



Description



EQT Objectives


    Base Salary  

Fixed compensation that is reviewed annually and is based on performance, experience, responsibilities, skillset and market value.

 

Provide a base level of compensation that corresponds to position and responsibilities.

Attract, retain, reward and motivate qualified and experienced executives

   
    Annual Incentives  

"At-risk" compensation measured against annual financial goals and evaluation of individual performance.

 

Incentivize executives to achieve near-term goals that ultimately contribute to long-term company growth and shareholder return.

 
     

Goals related to Company, business unit and personal performance are designed to reflect each executive's position.

       

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    EQT Compensation
Component



Description



EQT Objectives


    Long-Term Incentives  

"At-risk" compensation in the form of restricted stock and restricted stock unit awards whose value fluctuates according to shareholder value.

25% of each executive's long-term incentive award cliff vests based on continued service over three years.

50% of each executive's long-term incentive award vests 50% on the payment date following the anniversary of the grant date and 50% on the payment date following the second anniversary of the grant date based on EQT's 2018 adjusted EBITDA versus EQT's 2018 business plan.

25% of each executive's long-term incentive award cliff vests based on achievement of pre-established TSR, Operating Efficiency, Development Efficiency and Return on Capital Employed goals measured over a three-year performance period.

 

Align executives' interests with those of Company shareholders.

Promote stability among leadership via incentives to remain with the Company long-term.

Incentivize executives to achieve goals that drive Company performance over the long-term.

   
    Other Benefits  

Broad-based benefits provided to our employees (e.g., health and group insurance), a retirement savings plan and other personal benefits, where appropriate.

 

Provide a total compensation package that is competitive with the marketplace and addresses unique needs.

 

Key Compensation Program Features

As reported by EQT, the Company's compensation program, practices and policies for 2018, as adopted by EQT prior to the Separation, were designed to drive performance and align executives' interests with those of its shareholders. Highlighted below are some of the Company's more significant practices and policies for 2018.

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GRAPHIC

Our Compensation Committee's Process

Determination of Target Total Compensation

For 2018, the target total direct compensation for named executive officers was established by EQT's Management Development and Compensation Committee (the EQT MDCC) prior to the Separation. Beginning in 2019, the Compensation Committee established the target total direct compensation for named executive officers by establishing base salaries and setting annual and long-term incentive targets. When appropriate, the Compensation Committee also provides certain limited perquisites and may make other awards. When establishing target total direct compensation for each named executive officer, the Compensation Committee considers:

      the compensation philosophy articulated above;

      the market median target total direct compensation as reviewed with the Compensation Committee's independent compensation consultant;

      the scope of the executive's responsibility, internal pay equity, succession planning, and industry-specific technical skills and abilities that may be difficult to replace; and

      the Chief Executive Officer's compensation recommendations.

The Compensation Committee also periodically seeks input from the other independent directors of the Board and always seeks approval of the Board with respect to target total direct compensation for each named executive officer.

In considering the amount and type of each component of compensation, the Compensation Committee considers the effect of each element on all other elements as well as the allocation of target total direct compensation between cash and equity. The Compensation Committee is committed to providing a significant portion of each named executive officer's compensation in performance-based awards.

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Role of Independent Compensation Consultant

The Compensation Committee has the sole authority to hire, terminate and approve fees for compensation consultants, outside legal counsel and other advisors as it deems to be necessary to assist in the fulfillment of its responsibilities. In connection with the Separation, the Compensation Committee retained the services of Mercer as its independent compensation consultant to aid the Compensation Committee in performing its duties and redesigning the compensation philosophy and structure for the Equitrans Midstream organization. Representatives of Mercer provided the Compensation Committee with market data and counsel regarding executive officer compensation programs and practices, including specifically:

    competitive benchmarking;

    peer group identification and assessment;

    advice and market insight as to the form of and performance measures for annual and long-term incentives;

    marketplace compensation trends in the Company's industry and generally; and

    advice regarding the performance of the Company's annual review of compensation risk.

Representatives of Mercer do not make recommendations on, or approve, the amount of compensation for any executive officer. The Company has affirmatively determined that no conflict of interest has arisen in connection with the work of Mercer as compensation consultant for the Compensation Committee.

Executive Pay Components

Base Salary

In 2018 prior to the Separation, EQT set the base salary for all of the named executive officers. Following the Separation, the Compensation Committee approved the base salaries set forth below for each of the named executive officers, effective as of November 17, 2018:

    Name
Title      
Base
Salary


    Thomas F. Karam   President and Chief Executive Officer   $675,000    
    Kirk R. Oliver   Senior Vice President and Chief Financial Officer   $500,000  
    Diana M. Charletta   Executive Vice President and Chief Operating Officer   $400,000    
    Phillip D. Swisher   Vice President and Chief Accounting Officer   $224,000  
    Robert C. Williams   Vice President and General Counsel   $297,000    

The Compensation Committee anticipates that base salaries will be considered and, where appropriate, ordinarily adjusted towards the beginning of each calendar year.

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Annual Incentives

In connection with the Separation, and pursuant to the Employee Matters Agreement, the short-term incentive awards previously granted to the Company's employees by EQT pursuant to the EQT short-term incentive

compensation plans (including the underlying performance goals) remained in place for 2018. The EQT performance metrics included the following:

GRAPHIC

For our named executive officers other than Mr. Karam, the Compensation Committee and Mr. Karam conducted a review of each officer's performance. Mr. Karam also provided a self-assessment to the Compensation Committee to assist its review of his performance pursuant to the EQT short-term incentive plans. Based on these reviews, the successful planning and execution of the Separation, and the significant additional executive team performance highlights outlined in the table below, the Compensation Committee determined it was appropriate to increase the aggregate annual incentive amount by $0.2 million. From this aggregate bonus amount, the Compensation Committee recommended, and the Board approved, the following specific annual bonus payments for 2018 under the EQT short-term incentive plans for each named executive officer:

GRAPHIC

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Long-Term Incentives — EQT 2018 LTIP Grants

EQT reported that in January 2018, prior to the Separation, the EQT MDCC awarded long-term incentives to each of Ms. Charletta and Messrs. Williams and Swisher, pursuant to the EQT Corporation 2014 Long-Term Incentive Plan (the EQT LTIP). In addition, EQT reported that, in August 2018 and September 2018 prior to the Separation, the EQT MDCC awarded long-term incentives to Mr. Karam and Mr. Oliver, respectively, pursuant to the EQT LTIP. In developing EQT's 2018 long-term incentive program, EQT reported that the EQT MDCC designed a program it believed would align the interests of the named executive officers with the interests of its shareholders, drive appropriate performance, be market competitive, promote retention, be tax efficient, minimize earnings volatility and result in a portfolio approach to performance metrics. The table below sets forth the types and amounts of awards received by each named executive officer under the EQT LTIP during 2018. A detailed description of the terms of each type of EQT award is included in the sections that follow.

             
EQT LTIP Award
         
             
    Name


Restricted
Shares




Restricted
Stock Units





SIA
Restricted
Stock Units





IPSUP Perf.
Share Units






Value
Driver
Perf.
Share Units




      Thomas F. Karam     59,340                    
    Kirk R. Oliver     8,710        
             
    Diana M. Charletta         2,070         2,070     4,140    
    Phillip D. Swisher     550   650   550   1,100  
             
    Robert C. Williams         1,360         1,360     2,720    

Effective upon the Separation and pursuant to the Employee Matters Agreement, each award under the EQT LTIP was converted into two separate awards — a post-Separation EQT award and a Company award. Both the post-Separation EQT award and the Company award remained subject to the same terms and conditions (including with respect to vesting) after the conversion; provided that, after the conversion, (i) the number of shares subject to the post-Separation EQT award was equal to the number of EQT shares subject to such award immediately prior to the conversion, (ii) the number of shares subject to the Company award was equal to the number of EQT shares subject to such award immediately prior to the conversion, multiplied by a distribution ratio, and (iii) service requirements may be satisfied by service with the Company.

Restricted Share Awards

The restricted shares granted by the EQT MDCC in August 2018 to Mr. Karam will vest on the third anniversary of the grant date thereof, contingent upon continued service with the Company through such date.

Restricted Stock Unit Awards

The restricted stock units granted by the EQT MDCC to Ms. Charletta and Messrs. Swisher and Williams in January 2018 will vest on January 1, 2021, contingent upon continued service with the Company through such date, and be payable in cash. The restricted stock units granted to Mr. Oliver in September 2018 will vest on September 10, 2021, contingent upon continued service with the Company through such date, and be payable in cash.

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IPSUP Performance Share Units

EQT reported that the EQT 2018 Incentive Performance Share Unit Program (IPSUP) was designed to drive long-term value directly related to EQT production efficiency by using operating efficiency, development efficiency and return on capital employed as well as relative total shareholder return (TSR) performance as performance metrics over the period beginning January 1, 2018 and ending December 31, 2020. Under the EQT 2018 IPSUP, each participant can earn up to a maximum of three times his or her target award.

EQT also reported that, as a result, the performance measures and their weighting under the EQT 2018 IPSUP were based on EQT's performance over the period January 1, 2018 through December 31, 2020 as follows:

       
    Relative TSR (50%)  

  Measures EQT total shareholder return relative to EQT's 2018 peer group of companies over the performance period.  
    Operating Efficiency (25%)  

  Measures EQT's efficiency in operating expenses over the performance period.    
    Development Efficiency (25%)  

  Measures EQT's efficiency in capital spending on wells SPUD and turned-in-line over the performance period.  
    Return on Capital Employed (may modify performance on all other metrics by up to 10%)  

  Measures EQT's return over the performance period.    

Effective as of the Separation and pursuant to the Employee Matters Agreement, one-third of the EQT 2018 IPSUP performance share units remained subject to and were earned based on actual performance as of December 31, 2018 with respect to the performance measures described above, subject to continued employment with the Company. Of the remaining two-thirds of the EQT 2018 IPSUP performance share units, and pursuant to the Employee Matters Agreement, the post-Separation EQT award component will be earned based on new performance goals related to EQT performance and the Company award component will be earned based on new performance goals related to Company performance, each for the period beginning January 1, 2019 and ending December 31, 2020.

Value Driver Performance Share Units

EQT reported that the EQT 2018 Value Driver Performance Share Unit Award (VDA) was designed to drive the focus of next tier senior leadership on activities aligned with EQT's business plan and on EQT business unit and individual value drivers considered critical to EQT's long-term success.

Effective as of the Separation, pursuant to the Employee Matters Agreement, the EBITDA goal for the EQT 2018 VDA performance share units was deemed satisfied. In addition, the satisfaction of the business unit value drivers and other applicable performance goals was determined pursuant to the terms of the program adopted by the EQT MDCC, based on actual performance as of the earlier of December 31, 2018 or the last date performance could be determined for the post-Separation EQT award component and as of September 30, 2018 for the Company award component. One-half of the EQT 2018 VDA was confirmed and paid in cash in the first quarter of 2019, and the remaining one-half will be confirmed and vest upon payment in cash in the first quarter of 2020, subject in each case to continued employment with the Company.

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Strategic Implementation Awards

The Separation was an extraordinarily complex transaction, and EQT reported that the EQT MDCC determined it was important to have a stable, focused and experienced leadership team throughout this process. Accordingly, in recognition of the management team's efforts and to incentivize future efforts, EQT reported that the EQT MDCC approved a Strategic Implementation Award (SIA) for certain members of the management team, including Mr. Swisher, in March 2018. The Strategic Implementation Award for Mr. Swisher included the following components:

GRAPHIC

Pursuant to the terms of the program adopted by the EQT MDCC, the cash award vested and was paid upon grant in March 2018. One-half of the SIA restricted stock units vested on the first anniversary of the grant date and the remaining one-half will vest on the second anniversary of the grant date, subject to continued employment with the Company. Mr. Swisher received the following grants under the SIA program:

 

 

Name

 

Cash

 

RSUs

 

 

 

Phillip D. Swisher

 

$16,667

 

650

   

Separation of Named Executive Officer

As noted above, Ms. Petrelli is the Company's former Senior Vice President and Chief Administrative Officer. Ms. Petrelli's employment with the Company terminated effective December 13, 2018. The Company previously entered into a transition agreement and general release with Ms. Petrelli in order to provide for a smooth and orderly succession, have Ms. Petrelli release any claims against the Company and ensure her adherence to restrictive covenants that protect the Company.

In 2018, prior to the Separation, EQT awarded Ms. Petrelli 16,000 stock options, 4,780 shares of restricted stock, 9,550 performance share units under the 2018 IPSUP, and 6,710 performance share units and a cash payment of $166,667 under the SIA. Effective upon the Separation, the Company maintained Ms. Petrelli's annual base salary at $272,635. For additional information regarding the treatment of these awards and the payments Ms. Petrelli received in connection with her termination, which was determined in accordance with an agreement assumed by the Company in connection with the Separation, please see "Payments Upon Termination of Employment or a Change of Control" below.

Other Benefits

Health and Welfare Benefits

Following the Separation, the named executive officers participate in the same health and welfare benefit plans offered to other Company employees, including medical, prescription drug, dental, vision, short- and long-term disability, wellness and employee assistance programs. The same contribution amounts, deductibles and plan design provisions are generally applicable to all employees.

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Retirement Program

Following the Separation, the named executive officers participate in the same defined contribution 401(k) plan as other Company employees. The Company typically contributes an amount equal to 6% of each participant's base salary to an individual investment account for the employee, subject to applicable tax regulations. In addition, the Company matches a participant's elective contribution by contributing to the participant's individual investment account an amount equal to 50% of each dollar contributed by the employee, subject to a maximum Company contribution of 3% of the employee's base salary and to applicable tax regulations.

Pursuant to the terms of the Payroll Deduction and Contribution Program assumed by the Company in connection with the Separation, the Company also contributed an amount equal to 11% of Mr. Karam's annual incentive award for 2018 on an after-tax basis through the purchase of a retirement annuity product. The after-tax annuity program contains no vesting requirements. In 2019, the Compensation Committee discontinued this annual incentive award component of this program.

Limited Perquisites

EQT previously offered perquisites to certain of the EQT named executive officers including the following: a car allowance, a country club and a dining club membership, executive physical (including preferred access to healthcare professionals and related services for the executive and, in certain cases, his/her spouse), financial planning, life insurance and accidental death and disability insurance (both of which exceed the level of insurance provided to other employees), and de minimis personal usage of EQT purchased event tickets and parking.

With the assistance of Mercer, in connection with its review of the Company's compensation philosophy and structure, the Compensation Committee reviewed the perquisites historically provided by EQT. Consistent with its philosophy of pay for performance, following the Separation, the Company only provides modest perquisites to its named executive officers that, in number and value, are below median competitive levels for the peer group.

See footnote (4) to the Summary Compensation Table below for a discussion of the perquisites provided to the named executive officers in 2018.

Looking Forward to 2019

On January 15, 2019, the Company entered into an amended and restated confidentiality, non-solicitation and non-competition agreement with Ms. Charletta. This amended and restated agreement supersedes her prior agreement that was assigned to the Company in connection with the Separation. Among other things, this amended and restated agreement (i) subjects Ms. Charletta to non-competition, non-solicitation, and other restrictive covenants and (ii) provides for certain severance payments and benefits in the event of a termination of employment by the Company without "cause" or by Ms. Charletta for "good reason", all of which are consistent with the payments and benefits described below for Messrs. Karam and Oliver.

Mr. Williams' employment with the Company ended on March 28, 2019. We entered into an offer letter and a confidentiality, non-solicitation and non-competition agreement with a new Senior Vice President and General Counsel, Mr. Stephen M. Moore, effective April 15, 2019. Among other things, this confidentiality, non-solicitation and non-competition agreement (i) subjects Mr. Moore to non-competition, non-solicitation, and other restrictive covenants and (ii) provides for certain severance payments and benefits in the event of a termination of employment by the Company without "cause" or by Mr. Moore for "good reason", all of which are also consistent with the payments and benefits described below for Messrs. Karam and Oliver.

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As mentioned above, in addition to its first formal meeting in December 2018, the Committee had a number of meetings, conference calls and consultations with management, other independent directors and the independent compensation consultant (both prior to and following the Separation) which led to a significant re-design of the Company's compensation philosophy and programs for the 2019 fiscal year.

Cautionary Statements

Disclosures in this proxy statement may contain certain forward-looking statements within the meaning of Section 21E of the Exchange Act and Section 27A of the Securities Act of 1933, as amended. Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as "anticipate," "estimate," "approximate," "expect," "intend," "plan," "believe" and other words of similar meaning in connection with any discussion of future operating or financial matters. Without limiting the generality of the foregoing, forward-looking statements contained in this proxy statement include the matters discussed regarding the expectation of performance under compensation plans, anticipated financial and operational performance of the Company and its subsidiaries. These statements involve risks and uncertainties that could cause actual results to differ materially from projected results. Accordingly, investors should not place undue reliance on forward-looking statements as a prediction of actual results. The Company has based these forward-looking statements on current expectations and assumptions about future events. While the Company considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and are beyond the Company's control. The risks and uncertainties that may affect the operations, performance and results of the Company's business and forward-looking statements include, but are not limited to, those set forth in the Company's annual report on Form 10-K for the year ended December 31, 2018.

Any forward-looking statement speaks only as of the date on which such statement is made, and the Company does not intend to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

The "Narrative Disclosure to Summary Compensation Table" and "2018 Grants of Plan-Based Awards Table" and the "CD&A" contain references to 2018 adjusted midstream EBITDA, a financial measure that has not been calculated in accordance with generally accepted accounting principles (GAAP), which is also referred to as a non-GAAP supplemental financial measure. Attached as Appendix B is a reconciliation of 2018 adjusted midstream EBITDA to net income, the most directly comparable GAAP financial measure, as well as other important disclosures regarding non-GAAP financial measures.

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Report of the Management Development and Compensation Committee

We have reviewed and discussed the CD&A with the Company's management. Based on our review and discussions, we recommended to the Board of Directors that the CD&A be included in the Equitrans Midstream Corporation Proxy Statement for 2019.

This report is not soliciting material, is not deemed to be filed with the SEC and is not to be incorporated by reference in any filing of Equitrans Midstream Corporation under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date hereof and irrespective of any general incorporation language in any such filing.

This report has been furnished by the Management Development and Compensation Committee
of the Board of Directors.

Margaret K. Dorman, Chair
Norman J. Szydlowski
Robert F. Vagt

Compensation Policies and Practices and Risk Management

Culminating in early 2019, members of the Company's management, with the assistance of the Compensation Committee's independent compensation consultant, conducted a risk assessment of the Company's compensation programs for all employees. The results of such assessment were presented to the Compensation Committee. Based on the assessment, the Company and the Compensation Committee believe that the Company's compensation programs are balanced and do not create risks reasonably likely to have a material adverse impact on the Company.

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EXECUTIVE COMPENSATION TABLES

The following tables reflect the compensation of the Company's named executive officers. The information set forth below with respect to the period prior to the Separation and years ended December 31, 2017 and 2016 is historical EQT compensation. This historical EQT compensation, which was approved by EQT, has been provided by, or derived from information provided by, EQT and reflects compensation earned during 2018 prior to the Separation and for the years ended December 31, 2017 and 2016 based upon services performed during such periods. The Company provided the compensation information for periods following the Separation, most of which was attributable to EQT program assumed by the Company as a result of the Separation. See "Compensation Discussion and Analysis" for an explanation of our compensation philosophy and program following the Separation.

Summary Compensation Table

The table below sets forth the compensation earned by or paid to our named executive officers during the fiscal years ended December 31, 2018, 2017, and 2016.

  Name and Principal Position
Year
Salary
($)


Bonus
($) (1)


Stock
Awards
($) (2)



Option
Awards
($) (3)



Non-Equity
Incentive Plan
Compensation
($)




All Other
Compensation
($) (4)



Total
($)


  Thomas F. Karam 2018 212,308 267,000 3,000,230 205,941 3,685,479  
  President and Chief 2017  
  Executive Officer 2016  
  Kirk R. Oliver 2018 134,616 20,000 405,538 10,189 570,343
  Senior Vice President 2017
  and Chief Financial Officer 2016
  Diana M. Charletta 2018 283,167 321,040 510,890 36,017 1,151,114  
  Executive Vice President 2017 270,150 499,170 220,900 35,716 1,025,936  
  and Chief Operating Officer 2016 262,101 411,151 218,000 30,605 921,857  
  Phillip D. Swisher 2018 203,462 167,748 166,892 18,794 556,896
  Vice President and 2017
  Chief Accounting Officer 2016
  Robert C. Williams(5) 2018 279,011 235,680 336,314 25,393 876,398  
  Vice President and 2017 275,400 465,474 240,300 33,229 1,014,403  
  General Counsel 2016 275,400 575,908 235,000 32,779 1,119,087  
  Charlene Petrelli(6) 2018 374,539 166,667 1,321,731 246,240 69,917 2,345,762
  Former Senior Vice 2017 359,039 858,546 213,248 425,000 136,287 1,992,120
  President and Chief Administrative Officer 2016 355,000 1,189,305 201,411 445,000 129,509 2,320,225
(1)
The amounts for 2018 in this column reflect the performance bonuses earned by each named executive officer pursuant to the terms of the EQT Corporation 2018 Short-Term Incentive Plan (EQT STIP) with respect to performance during the year ended December 31, 2018. These awards were paid to the named executive officers in cash in the first quarter of 2019. See "Annual Incentives" in the Compensation Discussion and Analysis above for further discussion of the EQT STIP for the 2018 plan year. In addition, for Mr. Swisher and Ms. Petrelli, the amounts for 2018 in this column reflect the cash portion of the EQT 2018 SIA. See "Long-Term Incentives" in the Compensation Discussion and Analysis above for further discussion of the 2018 SIA.

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(2)
The amounts for 2018 in this column reflect the aggregate grant date fair values determined in accordance with FASB ASC Topic 718 using the assumptions described in Note 9 to the Company's Consolidated Financial Statements, which is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 14, 2019, and in Note 13 to EQT's Consolidated Financial Statements, which is included in EQT's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 14, 2019. With respect to stock awards granted in 2018, the table below sets forth the value attributable to performance restricted stock units under the EQT 2018 IPSUP and EQT 2018 VDA valued at target achievement. Pursuant to SEC rules, the amounts included for awards subject to performance conditions are based on the probable outcome as of the date of grant, which would have amounted to the target total grant date fair values listed in the table below. These performance restricted stock units under the EQT 2018 IPSUP and EQT 2018 VDA may pay out up to 300% of the target award, which would have amounted to the maximum total grant date fair values listed in the table below.

 

                        Name


Target Total Grant
Date Fair Value
($)



Maximum Total Grant
Date Fair Value
($)



 

Diana M. Charletta

394,006 1,182,018  

 

Phillip D. Swisher

104,704 314,112

 

Robert C. Williams

258,903 776,709  

 

Charlene Petrelli

730,862 2,192,586

See "Long-Term Incentives" in the Compensation Discussion and Analysis above for further discussion of the EQT 2018 IPSUP, EQT 2018 VDA and EQT 2018 SIA as well as the EQT 2018 Restricted Share and Unit Awards.

(3)
The amounts for 2018 in this column reflect the grant date fair value of option awards granted on January 1, 2018 calculated using a Black-Scholes option pricing model using the assumption described in Note 9 to the Company's Consolidated Financial Statements, which is included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 14, 2019 and in Note 13 to EQT's Consolidated Financial Statements, which is included in EQT's Annual Report on Form 10-K for the year ended December 31, 2018, filed with the SEC on February 14, 2019. For details regarding the stock option award (and the other awards for Ms. Petrelli included in this table), please see "Payments Upon Termination of Employment or a Change of Control" below.

(4)
This column includes the dollar value of premiums paid by EQT and the Company for group life and accidental death and dismemberment insurance, the Company's contributions to the 401(k) plan and the Payroll Deduction and Contribution Program, perquisites and for Mr. Karam, the compensation for his services as a non-employee director of EQT prior to him being named Senior Vice President, EQT and President, Midstream, which consist of $44,117 of fees earned or paid in cash; $106,261 of stock awards and $44 for annual life insurance premiums. For 2018, these amounts were as follows:

 

Name


EQT Director
Compensation
($)



Insurance
Premiums
($)



401(k)
Contributions
($)



Payroll
Deduction and
Contribution
Program
($)





Perquisites
(See Below)
($)



Total
($)


 

Thomas F. Karam

150,422 599 15,508 29,370 10,042 205,941  

 

Kirk R. Oliver

381 9,808 10,189

 

Diana M. Charletta

690 24,750 10,577 36,017  

 

Phillip D. Swisher

482 18,312 18,794

 

Robert C. Williams

643 24,750 25,393  

 

Charlene Petrelli

855 24,750 44,312 69,917

For 2018, the Company contributed an amount equal to 11% of the annual incentive award for Mr. Karam on an after-tax basis under the Payroll Deduction and Contribution Program through an annuity program offered by Fidelity Investments Life Insurance Co. In 2019, the Compensation Committee discontinued the annual incentive component of this program.



Amounts in the perquisite column, which are attributable to perquisites adopted by EQT and assumed by the Company in connection with the Separation, include the following:

for Mr. Karam and Ms. Petrelli the cost of acquiring, maintaining and insuring a car;

for Mses. Charletta and Petrelli and Mr. Karam reduced parking;

for Ms. Petrelli the cost of country club and dining club dues;

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    for Mses. Charletta and Petrelli the cost of providing financial planning and tax preparation services;

    for Mses. Charletta and Petrelli and Mr. Karam the cost of providing the executive physical benefit, which includes preferred access to healthcare professionals and related services for the executives and for Mr. Karam and Ms. Petrelli, their spouses


Following the Separation, the Company discontinued the parking benefit and vehicle allowance. See "Potential Payments Upon Termination or Change of Control" below for further discussion of the severance benefits Ms. Petrelli received following the end of fiscal year 2018.


Prior to the Separation, the named executive officers were allowed to use certain tickets purchased by EQT to attend a limited number of sporting or other events when such tickets were not otherwise being used for business purposes. The cost of such tickets used for personal purposes was considered de minimis by the Company and is not included as perquisites in the Summary Compensation Table because there were no incremental costs to EQT associated with such use.

(5)
Mr. Williams' employment with the Company terminated effective March 28, 2019.

(6)
Ms. Petrelli's employment with the Company terminated effective December 13, 2018.

2018 Grants of Plan-Based Awards Table

The table below sets forth additional information regarding stock options, restricted shares, and restricted share units granted by EQT to our named executive officers during the 2018 fiscal year.

 

      Estimated Future Payouts
Under Equity Incentive
Plan Awards



All Other
Stock
Awards:
Number of
Shares





All Other
Option
Awards:
Number of
Securities





Exercise
or Base
Price of



Grant
Date Fair
Value of
Stock and




 

 

Name


Type of
Award (1)


Grant
Date


Approval
Date


Threshold
(#)


Target
(#) (2)


Maximum
(#) (2)


of Stock
or Units
(#) (3)



Underlying
Options
(#) (4)



Option
Awards
($/share)



Option
Awards
($)



 

Thomas F. Karam

RS    8/9/2018 59,340 3,000,230  

 

Kirk R. Oliver

RS 9/10/2018    9/4/2018 8,710 405,538

 

Diana M. Charletta

PSU    1/1/2018 12/5/2017 2,070 6,210 158,417  

 

  RS    1/1/2018 12/5/2017 2,070 117,824  

 

  VDA    1/1/2018 12/5/2017 4,140 12,420 235,649  

 

Phillip D. Swisher

PSU    1/1/2018 12/5/2017 550 1,650 42,092

 

RS    1/1/2018 12/5/2017 550 31,306

 

VDA    1/1/2018