Equity-Based Compensation

12 Months Ended

Dec. 31, 2022

Share-Based Payment Arrangement [Abstract]

Equity-Based Compensation

Note 9. Equity-Based Compensation

We adopted the Hess Midstream LP 2017 Long-Term Incentive Plan (the “LTIP”). Awards under the LTIP are available for officers, directors and employees of our general partner or its affiliates, and any individuals who perform services for the Company. The LTIP provides the Company with the flexibility to grant restricted share awards, restricted shares, phantom units, share options, share appreciation rights, distribution equivalent rights, profits interest shares and other equity‑based awards. The LTIP limits the number of shares that may be delivered pursuant to vested awards to 3,000,000 Class A Shares.

Under the LTIP, we granted phantom unit awards with distribution equivalent rights to certain officers, employees and directors. These phantom units and distribution equivalent rights vest ratably over a three‑year period for officers and employees, and vest after one year for directors. Each phantom unit represents the right to receive one Class A Share upon vesting (or an equivalent amount of cash). Cash distributions on the phantom units accumulate and are paid upon vesting. Fair value of phantom units is based on the fair value of Class A Shares on the grant date.

Equity‑based award activity for the year ended December 31, 2022 was as follows:

				Weighted Average
				Award Date
	Number of Shares			Fair Value
Outstanding and unvested shares at December 31, 2021		187,931		$	16.75
Granted		53,548			33.52
Vested		(95,778	)		16.89
Outstanding and unvested shares at December 31, 2022		145,701		$	22.82

(in millions)	2022		2021		2020
Fair value of shares granted	$	1.8	$	1.8	$	1.9
Fair value of shares vested	$	1.6	$	1.8	$	1.5

During the year ended December 31, 2022, we recognized compensation expense related to the outstanding awards of $1.6 million (2021: $1.4 million, 2020: $1.5 million). As of December 31, 2022, $1.9 million of compensation cost related to our unvested restricted shares awarded under the LTIP remains to be recognized over an expected weighted‑average period of 1.8 years.