Form 4: Sitio Royalties Corp. Executive Receives Stock Grants

Britton L. James, Executive Vice President of Land at Sitio Royalties Corp., was granted restricted stock units (RSUs) and performance stock units (PSUs) on February 27, 2024.

Summary

• On February 27, 2024, Britton L. James, an Executive Vice President at Sitio Royalties Corp., received grants of restricted stock units (RSUs) and performance stock units (PSUs) under the company's Long Term Incentive Plan (LTIP).
• The RSU grant consists of 24,105 units, each representing a contingent right to receive one share of Sitio Royalties Corp.'s Class A common stock.
• These RSUs will vest in equal one-third installments on each of the first three anniversaries of February 27, 2024, contingent upon continuous service.
• The PSU grant consists of 72,314 units, also representing the right to receive one share of Class A common stock each.
• The number of PSUs earned will depend on the achievement of an annualized absolute total shareholder return performance goal over a three-year period, from the last 20 trading days of 2023 through the last 20 trading days of 2026.
• The actual number of PSUs earned can range from 0% to 200% of the target number, depending on performance.

Sentiment

Score: 7

Explanation: The document indicates standard executive compensation practices, aligning management with shareholder interests. 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 the executive to drive shareholder value.

Risks

• The executive may not meet the performance goals required to earn the target number of PSUs.
• The executive may leave the company before the vesting dates of the RSUs, forfeiting the unvested units.

Future Outlook

The executive's compensation is tied to the company's performance, incentivizing them to contribute to future growth and shareholder value.

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.

Comparison to Industry Standards

• Comparing Sitio Royalties Corp.'s executive compensation practices to those of its peers, such as Viper Energy Partners LP and Black Stone Minerals, L.P., would provide a better understanding of whether the grants are in line with industry standards.
• Analyzing the vesting schedules and performance metrics used by these companies would offer further context.

Stakeholder Impact

• Shareholders benefit from the alignment of executive compensation with company performance.
• Employees may be motivated by the company's commitment to incentivizing its executives.

Key Dates