Form 4: Magnolia Oil & Gas CEO Christopher Stavros Reports Acquisition of Restricted Stock Units and Performance Share Units

CEO Christopher Stavros reports the acquisition of restricted stock units and performance share units in Magnolia Oil & Gas Corp.

Summary

• On February 12, 2025, Christopher Stavros, CEO and Director of Magnolia Oil & Gas Corp, reported acquiring 100,684 restricted stock units (RSUs) and 100,684 performance share units (PSUs).
• The RSUs vest in three equal installments on March 1, 2026, 2027, and 2028, contingent upon continued employment.
• The PSUs' payout ranges from 0% to 150% of the target, based on the company's total shareholder return relative to a peer group between January 1, 2025, and December 31, 2027, also subject to continued employment.
• Following the transaction, Stavros directly owns 962,526 shares of Class A Common Stock.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices, aligning management incentives with shareholder value. The use of performance-based metrics is a positive sign.

Positives

• The vesting of RSUs and PSUs is tied to continued employment, aligning the CEO's interests with the company's long-term success.
• PSU payout is linked to relative total shareholder return, incentivizing outperformance against peers.

Risks

• The value of the RSUs and PSUs is contingent on the company's stock price and performance.
• Failure to meet performance targets could result in a lower payout for the PSUs.

Future Outlook

The document outlines future vesting dates for RSUs and the performance period for PSUs, indicating a long-term incentive structure for the CEO.

Industry Context

In the oil and gas industry, equity-based compensation is a common practice to align management's interests with those of shareholders, incentivizing long-term value creation. The use of relative TSR as a performance metric is also common to ensure management is focused on outperforming peers.

Comparison to Industry Standards

• Companies like EOG Resources and Pioneer Natural Resources also utilize performance-based equity compensation plans.
• These plans often include metrics such as production growth, cost control, and return on capital employed, in addition to relative TSR.
• The vesting schedules and performance periods are generally in line with industry standards, typically spanning three to five years.

Stakeholder Impact

• Shareholders benefit from the alignment of management's interests with long-term value creation.
• Employees may be indirectly impacted by the CEO's incentives to improve company performance.

Next Steps

• The RSUs will vest on March 1, 2026, 2027, and 2028, subject to continued employment.
• The PSU performance will be evaluated at the end of the performance period on December 31, 2027.

Key Dates