Form 4: Sitio Royalties Corp. Executive Dawn Smajstrla Receives Stock Grants

Dawn Smajstrla, Chief Accounting Officer of Sitio Royalties Corp., was granted restricted stock units (RSUs) and performance stock units (PSUs) on June 24, 2024, under the company's Long Term Incentive Plan.

Summary

• Dawn Smajstrla, Chief Accounting Officer of Sitio Royalties Corp., received grants of restricted stock units (RSUs) and performance stock units (PSUs) on June 24, 2024.
• The RSUs total 26,750 and will vest in equal one-third installments on the anniversaries of June 24, 2024, contingent upon continuous service.
• The PSUs total 15,604 at target and are eligible to be earned based on the achievement of an annualized absolute total shareholder return performance goal over a three-year period from June 24, 2024, to June 24, 2027.
• The number of PSUs earned can range from 0% to 200% of the target number, depending on performance.

Sentiment

Score: 7

Explanation: The document reflects a standard executive compensation practice, aligning management interests with shareholders. The performance-based component is a positive sign.

Positives

• The grants of RSUs and PSUs align the executive's interests with those of the shareholders.
• The performance-based vesting of PSUs incentivizes strong shareholder returns.

Risks

• The value of the RSUs and PSUs is dependent on the future performance of Sitio Royalties Corp.'s stock.
• The executive must remain employed with the company for the vesting periods to receive the full benefit of the grants.

Future Outlook

The PSUs are subject to a three-year performance period ending June 24, 2027, with the number of PSUs earned dependent on the company's total shareholder return.

Industry Context

Equity compensation is a common practice in the oil and gas industry to attract and retain talent, aligning executive incentives with shareholder value creation.

Comparison to Industry Standards

• Equity grants are a standard component of executive compensation packages in the oil and gas industry.
• Companies like Devon Energy (DVN) and Pioneer Natural Resources (PXD) also utilize RSUs and PSUs in their executive compensation plans.
• The vesting schedules and performance metrics for PSUs are generally aligned with industry best practices, focusing on shareholder return and long-term value creation.

Stakeholder Impact

• Shareholders: The equity grants aim to align management's interests with shareholder value creation.
• Employees: The grants are part of the company's overall compensation strategy to attract and retain talent.

Key Dates