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

Brett S. Riesenfeld, Executive Vice President, General Counsel, and Secretary of Sitio Royalties Corp., reports stock transactions related to RSU vesting and PSU grants.

Summary

• On February 27, 2025, Brett S. Riesenfeld had 4,321 Class A Common Stock shares withheld 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, Riesenfeld was granted 23,077 RSUs under the Sitio Royalties Corp. Long Term Incentive Plan (LTIP).
• These RSUs vest in equal one-third installments annually, starting February 28, 2025, contingent upon continuous service.
• On March 1, 2025, 3,758 Class A Common Stock shares were withheld to cover tax obligations related to the vesting of RSUs at a price of $20 per share.
• Riesenfeld was also granted 69,231 performance stock units (PSUs) under the LTIP for calendar year 2025.
• The PSUs' vesting depends on achieving an annualized absolute total shareholder return performance goal over a three-year period, with potential payout ranging from 0% to 200% of the target number.

Sentiment

Score: 7

Explanation: The document reflects standard executive compensation practices and compliance with SEC regulations. The sentiment is neutral to slightly positive, as it indicates alignment of executive incentives with shareholder value through equity-based compensation.

Positives

• The grant of RSUs and PSUs aligns executive compensation with the company's long-term performance and shareholder value.

Risks

• The vesting of PSUs is contingent on achieving specific performance targets, which may not be met.
• Fluctuations in the company's stock price could impact the value of the RSUs and PSUs.

Future Outlook

The RSUs will vest in equal one-third installments on each of the first three anniversaries of February 28, 2025, subject to continuous service. The PSUs 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, subject to continuous service.

Industry Context

This filing is a routine disclosure of executive stock transactions, common in publicly traded companies to ensure transparency and compliance with SEC regulations. It reflects standard practices for incentivizing executives through equity-based compensation.

Comparison to Industry Standards

• Equity-based compensation, including RSUs and PSUs, is a common practice among publicly traded companies, particularly in the energy sector, to align executive incentives with shareholder value.
• Companies like Devon Energy and Pioneer Natural Resources also utilize similar long-term incentive plans tied to performance metrics such as total shareholder return and production growth.
• The vesting schedules and performance goals are generally aligned with industry benchmarks to attract and retain top talent.

Stakeholder Impact

• Shareholders may view the equity-based compensation as a positive sign, aligning executive interests with long-term company performance.
• Employees may see the LTIP as a standard component of executive compensation.

Key Dates