Unit-based Compensation
The Westlake Chemical Partners LP Long-Term Incentive Plan (the "Plan") was adopted on July 15, 2014 and provides for grants of unit options, restricted units, phantom units, unit awards, distribution equivalent rights ("DERs") and other unit-based awards. The purpose of the Plan is to attract and retain the services of individuals who are essential for the growth and profitability of the Partnership and to encourage such individuals to devote their best efforts to advancing the business of the Partnership and its affiliates. Awards under the Plan are determined by the board of directors of the Partnership's general partner or a committee thereof (the "Committee"). Under the Plan, DERs may be granted, which represent a contingent right to receive an amount in cash, units, restricted units and/or phantom units, as determined by the Committee at its sole discretion, equal in value to the cash distributions made by the Partnership with respect to a common unit during the period such award is outstanding. The terms and conditions of each award are determined by the Committee. The maximum number of common units of the Partnership that may be delivered with respect to awards under the Plan is 1,270,000. The phantom units along with a corresponding number of DERs were granted to certain non-employee directors of the general partner of the Partnership during the years ended December 31, 2025, 2024 and 2023. These phantom units vest on the first anniversary of the grant date. There were no forfeitures under the Plan during 2025, 2024 and 2023. The total fair value of phantom units that vested during the years ended December 31, 2025, 2024 and 2023 was $322, $423 and $278, respectively.
Non-vested phantom unit awards as of December 31, 2025 and 2024 and changes during the period were as follows:
| | | | | | | | | | | | | | |
| | Number of
Units | | Weighted
Average Fair Value |
| | | | |
| | | | |
| | | | |
| Non-vested balance at December 31, 2024 | | 14,646 | | | $ | 23.14 | |
| Granted | | 15,015 | | | 21.92 | |
| Vested | | (14,646) | | | 21.96 | |
| Non-vested balance at December 31, 2025 | | 15,015 | | | $ | 19.00 | |
Each phantom unit represents the right to receive, upon vesting, either a cash payment equal to the fair market value of one Partnership common unit or a Partnership common unit. Each DER has distribution rights only so long as the phantom units to which it relates to has not vested or been settled.
The awards, which are classified as liability awards for financial accounting purposes, are measured at fair value on the grant date of the award and are re-measured at each reporting date until they vest based on the market price of the Partnership's units. The total units available for grant at December 31, 2025 were 1,184,657. The total compensation cost recognized during the years ended December 31, 2025, 2024 and 2023 was $301, $373 and $349, respectively, and is included in selling, general and administrative expenses and the related liability is classified as accrued and other liabilities in the consolidated financial statements of the Partnership. The unrecognized compensation cost associated with all grants under the Plan at December 31, 2025 was $169 and the weighted average remaining term of the units at December 31, 2025 was 0.6 years.