Form 4: Sitio Royalties Corp. Executive Receives Stock Grants

Jarret J. Marcoux, Executive Vice President of Operations at Sitio Royalties Corp., was granted restricted stock units (RSUs) and performance stock units (PSUs) on February 27, 2024.

Summary

• Jarret J. Marcoux, an Executive Vice President at Sitio Royalties Corp., received grants of restricted stock units (RSUs) and performance stock units (PSUs) on February 27, 2024.
• The RSUs, totaling 24,105, will vest in equal installments over three years, contingent on continuous service.
• The PSUs, with a target number of 72,314, are tied to the company's total shareholder return over a three-year period, with the actual number earned potentially ranging from 0% to 200% of the target.
• Following these transactions, Marcoux directly owns 74,580 shares of Class A Common Stock and 189,140 derivative securities.

Sentiment

Score: 6

Explanation: The document is a routine disclosure of stock grants, which is neither particularly positive nor negative. The sentiment is neutral, reflecting standard corporate governance practices.

Positives

• The grants of RSUs and PSUs align Marcoux's interests with those of the shareholders, incentivizing him to drive company performance.
• The vesting schedule of the RSUs encourages long-term commitment from the executive.
• The performance-based nature of the PSUs ensures that Marcoux is rewarded for achieving specific shareholder return goals.

Risks

• The actual number of PSUs earned could be significantly lower than the target if the company fails to meet its total shareholder return goals.
• The vesting of the RSUs is contingent on continuous service, meaning Marcoux could forfeit the unvested units if he leaves the company.

Future Outlook

The PSUs are subject to a three-year performance period, with the number of shares ultimately received dependent on the company's total shareholder return between the last 20 trading days of 2023 and the last 20 trading days of 2026.

Industry Context

Stock grants are a common form of executive compensation in the oil and gas industry, aligning management's interests with those of shareholders and incentivizing long-term value creation.

Comparison to Industry Standards

• Executive compensation packages, including stock grants, are common in the oil and gas industry to attract and retain talent.
• Companies like Devon Energy and Pioneer Natural Resources also utilize similar long-term incentive plans with performance-based metrics.
• The specific terms of the grants, such as vesting schedules and performance goals, are typically benchmarked against industry peers to ensure competitiveness.

Stakeholder Impact

• The stock grants could have a positive impact on shareholders by aligning management's interests with theirs.
• Employees may view the grants as a positive sign of the company's commitment to its executives.

Key Dates