EQUITY-BASED COMPENSATION

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

Under the equity incentive plan (the “Equity Plan”), approved by the board of directors, the Company is authorized to issue up to 11.80 million shares of incentive and non-statutory stock options, restricted stock awards and restricted stock units, performance awards and stock appreciation rights to eligible employees. The Company currently has outstanding restricted stock units and performance-based restricted stock units under the Equity Plan. At December 31, 2024, approximately 4.65 million shares of common stock remain available for future grants under the Equity Plan. The Company classifies its restricted stock units and performance-based restricted stock units as equity-based awards and estimates the fair values of restricted stock awards and units as the closing price of the Company’s common stock on the grant date of the award, which is expensed over the applicable vesting period.

In addition to the Equity Plan, Viper maintains its own long-term incentive plan, which is not significant to the Company.

The following table presents the financial statement impacts of equity compensation plans and related costs on the Company’s financial statements:


	Year Ended December 31,
	2024		2023		2022
	(In millions)
General and administrative expenses	$	65	$	54	$	55
Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties	$	30	$	26	$	21

Restricted Stock Units

The following table presents the Company’s restricted stock unit activity during the year ended December 31, 2024 under the Equity Plan:


	Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested at December 31, 2023	751,196	$	132.29
Granted	368,390	$	179.64
Vested	(436,343)	$	129.85
Forfeited	(37,835)	$	151.39
Unvested at December 31, 2024	645,408	$	159.84

The aggregate grant date fair value of restricted stock units that vested during the years ended December 31, 2024, 2023 and 2022 was $57 million, $48 million and $41 million, respectively. As of December 31, 2024, the Company’s unrecognized compensation cost related to unvested restricted stock units was $78 million, which is expected to be recognized over a weighted-average period of 2.0 years.

Performance-Based Restricted Stock Units

To provide long-term incentives for executive officers to deliver competitive returns to the Company’s stockholders, the Company has granted performance-based restricted stock units to eligible employees. The ultimate number of shares awarded from these conditional restricted stock units is based upon measurement of total stockholder return of the Company’s common stock (“TSR”) as compared to a designated peer group during a three-year performance period.

In March 2024, eligible employees received performance restricted stock unit awards totaling 110,989 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of total stockholder return of the Company’s common stock as compared to a designated peer group during the three-year performance period of January 1, 2024 to December 31, 2026 and cliff vest at December 31, 2026 subject to continued employment. The initial payout of the March 2024 awards will be further adjusted by a TSR modifier that may reduce the payout or increase the payout up to a maximum of 250%. Additionally, in September 2024 the Company granted 6,750 units under substantially the same terms as the March 2024 performance restricted stock unit awards.

In March 2023, eligible employees received performance restricted stock unit awards totaling 126,347 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of total stockholder return of the Company’s common stock as compared to a designated peer group during the three-year performance period of January 1, 2023 to December 31, 2025 and cliff vest at December 31, 2025 subject to continued employment. The initial payout of the March 2023 awards will be further adjusted by a TSR modifier that may reduce the payout or increase the payout up to a maximum of 250%. Additionally, in July 2023 the Company granted 1,858 units under substantially the same terms as the March 2023 performance restricted stock unit awards.

In March 2022, eligible employees received performance restricted stock unit awards totaling 126,905 units from which a minimum of 0% and a maximum of 200% units could be awarded based upon the TSR during the three-year performance period of January 1, 2022 to December 31, 2024. These awards cliff vested at 250% on December 31, 2024 based upon the results of the TSR during the performance period, which was further adjusted by a TSR modifier.

The fair value of each performance restricted stock unit issuance is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of units to be earned during the performance period.

The following table presents a summary of the grant-date fair values of performance restricted stock units granted and the related assumptions for the awards granted during the periods presented:


	March 2024			September 2024			March 2023			July 2023			2022
Grant-date fair value	$	341.38		$	337.23		$	259.52		$	222.09		$	237.13
Risk-free rate	4.38		%	3.54		%	4.64		%	4.70		%	1.44		%
Company volatility	41.40		%	34.40		%	46.90		%	47.20		%	72.10		%

The following table presents the Company’s performance restricted stock unit activity under the Equity Plan for the year ended December 31, 2024:


	Performance Restricted Stock Units	Weighted Average Grant-Date Fair Value
Unvested at December 31, 2023	278,056	$	234.80
Granted	293,081	$	341.14
Vested	(292,235)	$	114.12

Unvested at December 31, 2024(1)	278,902	$	278.72

(1)A maximum of 647,818 units could be awarded based upon the Company’s final TSR ranking.

As of December 31, 2024, the Company’s unrecognized compensation cost related to unvested performance based restricted stock awards and units was $41 million, which is expected to be recognized over a weighted-average period of 1.8 years.