Form 4: Sitio Royalties Corp. Executive Dawn Smajstrla Reports Stock and Unit Grants

Dawn Smajstrla, Chief Accounting Officer of Sitio Royalties Corp., reports the grant of restricted stock units (RSUs) and performance stock units (PSUs) as part of the company's Long Term Incentive Plan.

Summary

• On December 31, 2024, Dawn Smajstrla, Chief Accounting Officer of Sitio Royalties Corp., reported transactions related to the company's Long Term Incentive Plan.
• Smajstrla was granted 14,498 restricted stock units (RSUs) at a price of $0 per unit.
• These RSUs will vest in equal one-third installments on each of the first three anniversaries of December 31, 2024, contingent upon continuous service.
• Smajstrla also received 4,833 performance stock units (PSUs) related to calendar year 2025.
• The PSUs are eligible to be earned based on the achievement of an annualized absolute total shareholder return performance goal over a three-year period, from the last 20 trading days of 2024 through the last 20 trading days of 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 standard executive compensation practices, indicating a neutral to slightly positive sentiment as it aligns management with shareholder interests.

Positives

• The grants of RSUs and PSUs align executive compensation with the long-term performance of Sitio Royalties Corp.
• The vesting schedule of the RSUs incentivizes continued service by the Chief Accounting Officer.
• The performance-based nature of the PSUs encourages efforts to maximize shareholder returns.

Risks

• The actual number of PSUs earned could be significantly lower than the target if the performance goals are not met.
• The value of the RSUs and PSUs is subject to the market price of Sitio Royalties Corp.'s Class A common stock.

Future Outlook

The document outlines future vesting and earning potential of RSUs and PSUs based on service and performance criteria.

Industry Context

This type of equity compensation is common in the oil and gas industry to align management interests 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 and Pioneer Natural Resources also utilize RSUs and PSUs to incentivize performance and retention.
• The specific vesting schedules and performance metrics vary by company, but the overall structure is similar.

Stakeholder Impact

• Shareholders: Potential for increased value if performance goals are met.
• Employees: Provides insight into executive compensation structure.

Next Steps

• Vesting of RSUs on the anniversaries of the grant date.
• Evaluation of performance against the total shareholder return goal for the PSUs.

Key Dates