Share-Based Compensation |
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| Share-Based Compensation | Share-Based Compensation Plan for Employees
On December 29, 2021, the Company adopted the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”). The 2021 Plan provides for the grant of non-qualified stock options, incentive stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards and other stock-based awards. Awards granted under the 2021 Plan are generally subject to a minimum vesting period of at least one year. Awards may be subject to cliff-vesting or graded-vesting conditions, with graded-vesting starting no earlier than one year after the grant date. The maximum aggregate number of shares of the Company’s Common Stock that may be issued under the 2021 Plan is 75,000 shares.
The following table sets forth the restricted stock activity for the year ended December 31, 2021:
Restricted stock awards were granted December 29, 2021 with 1,993 shares vesting on December 29, 2022 and 1,337 shares vesting on December 29, 2023. Unvested restricted stock awards are entitled to dividends which are accrued and distributed to award recipients at the time such awards vest. For the year ended December 31, 2021, we recognized share compensation expense of less than $0.1 million. There was no share compensation expense for the year ended December 31, 2020.
On February 11, 2022, the Company granted awards totaling 3,823 restricted stock units (“RSUs”) to certain employees. The grant date fair value was $1,105 per share. These time-based awards vest over three years upon the annual anniversary dates of the RSUs.
On February 11, 2022, the Company also granted performance stock units (“PSUs”) to certain employees. Each PSU has a value equal to one share of Common Stock. The PSUs will vest three years after grant if certain performance metrics are met, as follows: 50% of the PSUs may be earned based on the Company’s relative total stockholder return (“RTSR”) for the three year period from January 2022 to January 2025 compared to the XOP Index, and 50% of the PSUs may be earned based on the cumulative free cash flow per share over the three year vesting period.
Plan for Non-Employee Directors
On December 29, 2021, the Company adopted the 2021 Non-Employee Director and Deferred Compensation Plan (the “2021 Directors Plan”). The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Directors Plan is 10,000 shares, which may consist, in whole or in part, of authorized and unissued shares (if any), treasury shares, or shares reacquired by the Company in any manner. As of December 31, 2021, no shares had been granted under the 2021 Directors Plan. On January 1, 2022, the Company granted 680 shares of restricted stock to our directors. The shares will vest on the first anniversary of the award. The fair value as of the date of grant was $1,249 per share.
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