Form 4: Sitio Royalties Corp. Executive Reports Stock Transactions Following RSU Vesting and PSU Grant

Andrew Dax McDavid, an executive at Sitio Royalties Corp., reports the acquisition and disposal of Class A Common Stock related to RSU vesting and PSU grants.

Summary

• On February 27, 2025, Andrew Dax McDavid disposed of 3,386 shares of Class A Common Stock to cover tax obligations related to the vesting of restricted stock units (RSUs) at a price of $19.5 per share.
• On February 28, 2025, McDavid acquired 27,564 shares of Class A Common Stock through the vesting of RSUs under the Sitio Royalties Corp. Long Term Incentive Plan (LTIP).
• Also on February 28, 2025, McDavid was granted 82,692 performance stock units (PSUs) under the LTIP, which will be eligible to be earned based on the company's total shareholder return performance over a three-year period.
• On March 1, 2025, McDavid disposed of 2,913 shares of Class A Common Stock to cover tax obligations related to the vesting of RSUs at a price of $20 per share.
• Following these transactions, McDavid directly owns 234,029 shares of Class A Common Stock and 221,999 PSUs.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices, indicating alignment of management with shareholder interests. The granting of PSUs based on TSR suggests a focus on long-term value creation, which is generally viewed positively.

Positives

• The vesting of RSUs and granting of PSUs to an executive suggests continued alignment of interests with shareholders.
• The LTIP incentivizes executives based on long-term shareholder value creation through total shareholder return performance.

Future Outlook

The PSUs granted will be eligible to be earned based on achievement with respect to an annualized absolute total shareholder return performance goal over a three-year performance period beginning with the last 20 trading days of 2024 through the last 20 trading days of 2027.

Industry Context

Executive compensation packages often include RSUs and PSUs to align management's interests with those of shareholders, particularly in the energy and natural resources sector where long-term performance is critical.

Comparison to Industry Standards

• RSUs and PSUs are common components of executive compensation packages in publicly traded companies, particularly in the oil and gas industry.
• Companies like Devon Energy and Pioneer Natural Resources also utilize similar equity-based compensation plans to incentivize executives.
• The vesting schedules and performance metrics associated with these grants are typically benchmarked against industry peers to ensure competitiveness and alignment with shareholder interests.

Stakeholder Impact

• Shareholders may view the equity-based compensation as aligning management's interests with long-term shareholder value.
• Employees may see the LTIP as a positive incentive for executives to drive company performance.

Key Dates