USA Compression Partners, LPUSAC
USA Compression Partners, LP Stock Compensation Disclosure
Unit-Based Compensation
Long-Term Incentive Plan
In January 2013, the Board adopted the USA Compression Partners, LP 2013 Long-Term Incentive Plan (as amended, the “LTIP”), which is available for certain employees, consultants, and directors of the General Partner and any of its affiliates who perform services for us. The LTIP provides for awards of unit options, unit appreciation rights, restricted units, phantom units, DERs, unit awards, profits interest units, and other unit-based awards. Under the LTIP, the maximum number of common units available for issuance is 10,000,000 and the term of the LTIP is until November 1, 2028. Awards that are forfeited, canceled, paid, or otherwise terminate or expire without the actual delivery of common units will be available for delivery pursuant to other awards. The LTIP is administered by the Board or a committee thereof.
(a)Phantom Units
Prior to December 2024, the General Partner’s executive officers, certain of its employees, and certain of its outside directors were granted phantom units to incentivize them to help drive our future success and to share in the economic benefits of that success. Our Compensation Committee has the ability to allow, and has historically granted, employees with phantom
units the option to have a portion of their phantom unit settled in cash, above the statutory tax rate, with the remainder settled in common units upon vesting. ASC Topic 718 Compensation – Stock Compensation requires the entire amount of an award with such features to be accounted for as a liability. Under the liability method of accounting for unit-based compensation, we re-measure the fair value of the phantom unit award at each financial statement date until the award vests or is forfeited. The fair value is measured using the market price of the Partnership’s common units. During the requisite service period (the vesting period of the phantom unit awards), compensation cost is recognized using the proportionate amount of the award’s fair value that has been earned through service to date. Phantom unit awards granted to outside directors do not have a cash settlement option and as such, we account for these phantom unit awards as equity. Each phantom unit is granted in tandem with a corresponding DER, which entitles the recipient to receive an amount in cash on a quarterly basis equal to the product of (i) the number of the recipient’s outstanding, unvested phantom units on the record date for such quarter and (ii) the quarterly distribution declared by the Board for such quarter with respect to the Partnership’s common units.
During the years ended December 31, 2024, and 2023, an aggregate of 17,384, and 476,959, respectively, phantom units (including the corresponding DERs) were granted under the LTIP to the General Partner’s executive officers, certain of its employees, and outside directors. The phantom units (including the corresponding DERs) awarded are subject to restrictions on transferability, customary forfeiture provisions, and time vesting provisions. These phantom unit awards vest incrementally, with 60% of the phantom units vesting on December 5 of the third year following the grant and the remaining 40% vesting on December 5 of the fifth year following the grant.
Phantom units vest in full upon a change in control. Phantom unit recipients do not have all the rights of a unitholder in the Partnership with respect to the phantom units until the units have vested.
As of December 31, 2025 and 2024, our total unit-based compensation liability related to these phantom units was $3.9 million and $22.8 million, respectively. During the years ended December 31, 2025, 2024, and 2023, we recognized $2.3 million, $16.4 million, and $22.2 million of compensation expense associated with these phantom unit awards, respectively, recorded in selling, general, and administrative expense. During the years ended December 31, 2025, 2024, and 2023, amounts paid related to the cash settlement of vested phantom units under the LTIP were $7.7 million, $5.4 million, and $6.4 million, respectively.
The total fair value and intrinsic value of the phantom units vested under the LTIP was $11.4 million, $6.3 million, and $7.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.
The following table summarizes information regarding phantom unit awards for the periods presented:
| Number of Units | Weighted-Average Grant Date Fair Value per Unit | ||||||||||
| Phantom units outstanding at December 31, 2022 | 2,154,015 | $ | 14.21 | ||||||||
| Granted | 476,959 | 23.13 | |||||||||
| Vested | (585,055) | 13.29 | |||||||||
| Forfeited | (122,887) | 17.50 | |||||||||
| Phantom units outstanding at December 31, 2023 | 1,923,032 | $ | 17.08 | ||||||||
Granted | 17,384 | 24.70 | |||||||||
Vested | (506,516) | 15.40 | |||||||||
Forfeited | (113,584) | 18.09 | |||||||||
| Phantom units outstanding at December 31, 2024 | 1,320,316 | $ | 18.59 | ||||||||
Vested | (797,412) | 17.03 | |||||||||
Forfeited | (220,570) | 18.82 | |||||||||
| Phantom units outstanding at December 31, 2025 | 302,334 | $ | 20.16 | ||||||||
The unrecognized compensation cost associated with phantom unit awards was an aggregate $2.5 million as of December 31, 2025. We expect to recognize the unrecognized compensation cost for these phantom unit awards on a weighted-average basis over a period of approximately 1.3 years.
(b)Restricted Units
Beginning December 2024, the General Partner’s executive officers, certain of its employees, and its outside directors were granted restricted units to incentivize them to help drive our future success and to share in the economic benefits of that success.
Each restricted unit is granted in tandem with a corresponding DER, which entitles the recipient to receive an amount in cash on a quarterly basis equal to the product of (i) the number of the recipient’s outstanding, unvested restricted units on the record date for such quarter and (ii) the quarterly distribution declared by the Board for such quarter with respect to the Partnership’s common units.
These restricted units vest incrementally, with 60% of the restricted units vesting on December 5 of the third year following the grant and the remaining 40% vesting on December 5 of the fifth year following the grant. Upon vesting, one Partnership common unit is issued for each restricted unit.
Restricted units vest in full upon a change in control. Restricted unit recipients do not have all the rights of a unitholder in the Partnership with respect to the restricted units until the units have vested.
During the years ended December 31, 2025 and 2024, we recognized $2.0 million and $0.1 million, respectively, of compensation expense associated with these restricted units recorded in selling, general, and administrative expense.
The following table summarizes information regarding restricted units for the periods presented:
| Number of Units | Weighted-Average Grant Date Fair Value per Unit | ||||||||||
| Restricted units outstanding at December 31, 2023 | — | $ | — | ||||||||
Granted | 323,390 | 22.25 | |||||||||
| Restricted units outstanding at December 31, 2024 | 323,390 | 22.25 | |||||||||
Granted | 392,422 | 24.26 | |||||||||
Forfeited | (69,430) | 22.25 | |||||||||
| Restricted units outstanding at December 31, 2025 | 646,382 | $ | 23.84 | ||||||||
The unrecognized compensation cost associated with restricted units was an aggregate $13.2 million as of December 31, 2025. We expect to recognize the unrecognized compensation cost for these restricted units on a weighted-average basis over a period of approximately 3.4 years.
Long-Term Cash Restricted Unit Plan
In December 2024, the Compensation Committee adopted the USA Compression Partners, LP Long-Term Cash Restricted Unit Plan (the “CRU Plan”) which is available for certain employees and directors of the General Partner and any of its affiliates who perform services for us. The CRU Plan provides for awards of cash restricted units which vest one-third on December 5, each of the first, second, and third anniversaries following the grant. A cash restricted unit entitles the award recipient to receive cash equal to the market value of one Partnership common unit upon vesting. ASC Topic 718 Compensation – Stock Compensation requires the entire amount of an award with such features to be accounted for as a liability. Under the liability method of accounting for unit-based compensation, we re-measure the fair value of the cash restricted unit at each financial statement date until the cash restricted unit vests or is forfeited. The fair value is measured using the market price of the Partnership’s common units. During the requisite service period (the vesting period of the cash restricted units), compensation cost is recognized using the proportionate amount of the cash restricted unit’s fair value that has been earned through service to date. Cash restricted units vest in full upon a change in control.
For the years ended December 31, 2025 and 2024, the Partnership granted a total of 115,962 and 107,820, respectively, cash restricted units. As of December 31, 2025 and 2024, a total of 172,405 and 107,820, respectively, cash restricted units were unvested. As of both December 31, 2025 and 2024, our total unit-based compensation liability related to these cash restricted units was $0.1 millionHistorical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 17, 2026 | Showing above |
| 2024 | Feb 11, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.