Form 4: SM Energy SVP Kenneth Knott Reports Stock Acquisition and RSU Grant

SM Energy's Senior Vice President of Business Development and Land, Kenneth J. Knott, reported the acquisition of common stock from a performance share unit award and a new grant of restricted stock units.

Summary

• Kenneth J. Knott, SVP Bus Dev & Land, acquired 3,458 shares of SM Energy Co common stock on July 24, 2025.
• These shares were issued under a performance share unit (PSU) award granted on July 1, 2022, which fully vested on July 1, 2025, based on achievement of time-based vesting and specific performance criteria.
• Concurrently, 843 shares of common stock were disposed of on July 24, 2025, at a price of $24.71 per share, likely for tax withholding purposes related to the PSU vesting.
• Following these transactions, Knott beneficially owns 134,235 shares of common stock.
• Additionally, Knott was granted 15,361 Restricted Stock Units (RSUs) on July 25, 2025.
• These RSUs represent a contingent right to receive one share of stock per unit and will vest in six equal biannual installments beginning January 1, 2026.

Sentiment

Score: 7

Explanation: The filing indicates a positive event for the executive with the vesting of performance-based shares and the grant of new restricted stock units, reflecting successful achievement of performance criteria and ongoing executive compensation alignment. The sale of shares is a routine tax-related transaction.

Positives

• Issuance of 3,458 shares of common stock to the Reporting Person under a performance share unit (PSU) award, indicating achievement of performance criteria and time-based vesting.
• The PSU award, granted on July 1, 2022, allowed for a contingent right to receive between 0% to 200% of shares, suggesting strong performance led to the issuance.
• Grant of 15,361 Restricted Stock Units (RSUs) to a key executive, aligning management incentives with shareholder interests.

Negatives

• Disposal of 843 shares of common stock at $24.71, likely for tax withholding, which reduces the executive's direct ownership.

Future Outlook

The Restricted Stock Units granted on July 25, 2025, are scheduled to vest in six equal biannual installments beginning January 1, 2026, with vested shares to be issued upon the earlier of the Reporting Person's retirement or July 1 of the applicable year.

Industry Context

This filing represents a routine insider transaction related to executive compensation in the energy sector. The issuance of performance share units and restricted stock units is a common practice in publicly traded companies, including those in the oil and gas industry, to align executive incentives with long-term company performance and shareholder value.

Related Party Transactions

• The transactions involve the issuance of shares and restricted stock units to a Senior Vice President of the Issuer, which are considered related party transactions as they involve an executive officer.

Stakeholder Impact

• Shareholders: The issuance of performance-based shares indicates management achieved certain goals, potentially benefiting shareholders. The grant of new RSUs aligns executive incentives with long-term shareholder value.
• Employees: The compensation structure for a senior executive may reflect broader company compensation policies.

Next Steps

• Vesting of 15,361 Restricted Stock Units in six equal biannual installments beginning January 1, 2026.
• Issuance of vested RSU shares to the Reporting Person on the earlier of retirement or July 1 of the applicable year.

Key Dates

Recommendation

This Form 4 filing details routine executive compensation transactions, including the vesting of performance-based shares and the grant of new restricted stock units, along with a tax-related sale. It does not provide new fundamental information about the company's operational performance, financial health, or strategic direction that would warrant a change in investment recommendation. Investors should continue to hold based on their existing analysis of SM Energy's fundamentals.

Keywords

SM Energy, Kenneth Knott, Form 4, Insider Transaction, Performance Share Units, Restricted Stock Units, Equity Compensation, Executive Compensation, Stock Award, Share Vesting, Oil and Gas