Texas Pacific Land Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

Share-Based Compensation (Tables)

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Restricted Stock Awards and Units Activity

The following table summarizes activity related to RSAs and RSUs under the 2021 Plan for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
	2023						2022
	Restricted Stock Awards			Restricted Stock Units			Restricted Stock Awards			Restricted Stock Units
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	1,337	$	1,252	5,612	$	1,323	3,330	$	1,252	—	$	—
Granted (2)	—	—		2,848	1,924		—	—		5,612	1,323
Vested (3)	—	—		(1,864)	1,324		—	—		—	—
Cancelled and forfeited	—	—		—	—		—	—		—	—
Nonvested at end of period	1,337	$	1,252	6,596	$	1,583	3,330	$	1,252	5,612	$	1,323

(1)RSAs were granted on December 29, 2021: 1,993 shares vested on December 29, 2022 and 1,337 shares will vest on December 29, 2023.

(2)RSUs vest in one-third increments over a three-year period.

(3)Of the 1,864 shares that vested during the nine months ended September 30, 2023, 669 shares were surrendered upon vesting by employees to the Company to settle tax withholdings.

The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
	2023			2022
	Number of RSAs	Weighted-Average Grant-Date Fair Value per Share		Number of RSAs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period	699	$	1,281	—	$	—
Granted (1)	486	2,344		784	1,277
Vested	(699)	1,281		—	—
Cancelled and forfeited	—	—		(85)	1,249
Nonvested at end of period	486	$	2,344	699	$	1,281

(1)RSAs vest on the first anniversary of the grant date.

Schedule of Performance Share Units Activity

The following table summarizes activity related to PSUs for the nine months ended September 30, 2023 and 2022:


	Nine Months Ended September 30,
	2023			2022
	Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share		Number of Target PSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period (1)	2,394	$	1,355	—	$	—
Granted (2)	1,852	2,342		2,394	1,355
Vested	—	—		—	—
Cancelled and forfeited	—	—		—	—
Nonvested at end of period	4,246	$	1,786	2,394	$	1,355

(1)The PSUs were granted on February 11, 2022 and include 1,197 RTSR (as defined below) PSUs (based on target) with a grant date fair value of $1,605 per share and 1,197 FCF (as defined below) PSUs (based on target) with a grant date fair value of $1,105 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 2,394 additional units would be issued).

(2)The PSUs were granted on February 10, 2023 and include 926 RTSR PSUs (based on target) with a grant date fair value of $2,761 per share and 926 FCF PSUs (based on target) with a grant date fair value of $1,924 per share. If the maximum performance potential metrics described in the PSU agreements are achieved, the actual number of units that will ultimately be awarded under the PSU agreements will exceed target units by 100% (i.e., a collective 1,852 additional units would be issued).

Schedule of Share-Based Compensation Expense

The following table summarizes our share-based compensation expense by line item in the condensed consolidated statements of income (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Salaries and related employee expenses (employee awards)	$	2,502	$	1,910	$	7,217	$	4,989
General and administrative expenses (director awards)	287		211		895		627
Total share-based compensation expense (1)	$	2,789	$	2,121	$	8,112	$	5,616

(1)The Company recognized a tax benefit of $0.6 million and $0.4 million related to share-based compensation for the three months ended September 30, 2023 and 2022, respectively. The Company recognized a tax benefit of $1.7 million and $1.2 million related to share-based compensation for the nine months ended September 30, 2023 and 2022, respectively.