Texas Pacific Land Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

Share-Based Compensation

Share-Based Compensation

12 Months Ended

Dec. 31, 2025

Share-Based Payment Arrangement [Abstract]

The Company grants share-based compensation to employees under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”) and to its non-employee directors under the 2021 Non-Employee Director Stock and Deferred Compensation Plan (the “2021 Directors Plan” and, together with the 2021 Plan, the “Plans”). As of December 31, 2025, share-based compensation granted under the Plans included restricted stock awards (“RSAs”), restricted stock units (“RSUs”) and performance stock units (“PSUs”). RSUs granted under the 2021 Plan vest in one-third annual increments over three years, and PSUs granted under the 2021 Plan cliff vest at the end of three years if the applicable performance metrics are achieved (as discussed further below). RSAs granted under the 2021 Directors Plan vest in full on the date of grant.

Incentive Plan for Employees

The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Plan is 675,000 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, 2025, 366,381 shares of Common Stock remained available under the 2021 Plan for future grants.

The following table summarizes activity related to RSUs under the 2021 Plan for the years ended December 31, 2025 and 2024:


		Years Ended December 31,
		2025				2024
	Restricted Stock Units (1)				Restricted Stock Units (1)
		Number of RSUs	Weighted-Average Grant-Date Fair Value per Share			Number of RSUs	Weighted-Average Grant-Date Fair Value per Share
Nonvested at beginning of period		69,636	$	170		56,025	$	176
Granted		19,512	457			37,965	160
Vested (2)		(36,177)	166			(23,436)	169
Cancelled and forfeited		(267)	457			(918)	176
Nonvested at end of period		52,704	$	277		69,636	$	170

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

(2)Of the 36,177 RSUs that vested during the year ended December 31, 2025, 14,262 RSUs were surrendered by employees to the Company upon vesting to settle tax withholdings. Of the 23,436 RSUs that vested during the year ended December 31, 2024, 8,844 RSUs were surrendered by employees to the Company upon vesting to settle tax withholding obligations.

The following table summarizes activity related to PSUs under the 2021 Plan for the years ended December 31, 2025 and 2024:


	Years Ended December 31,
	2025			2024
	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)	63,234	$	191	38,214	$	198
Granted(2)	11,544	548		25,020	179
Vested(3)	(21,546)	151		—	—
Cancelled and forfeited	—	—		—	—
Nonvested at end of period	53,232	$	285	63,234	$	191

(1)Nonvested PSUs as of January 1, 2025 included 31,617 RTSR (as defined below) PSUs and 31,617 FCF (as defined below) PSUs. If the maximum of the performance metrics described in the applicable PSU agreements are achieved, the actual number of shares that will ultimately vest pursuant to the PSU agreements will exceed target PSUs by 100% (i.e., a collective 63,234 additional shares would be issued).

(2)The PSUs were granted on February 15, 2025 and include 5,772 RTSR PSUs (based on target) with a grant date fair value of $638 per share and 5,772 FCF PSUs (based on target) with a grant date fair value of $457 per share. If the maximum amount of the performance metrics described in the applicable PSU agreements are achieved, the actual number of shares that will ultimately vest pursuant to the PSU agreements will exceed target PSUs by 100% (i.e., a collective 11,544 additional shares would be issued).

(3)Vested PSUs are based on the original number of PSUs granted (i.e., target units). The actual number of shares delivered upon vesting of PSUs during the year ended December 31, 2025 totaled 43,092 shares, of which 18,750 shares were surrendered by employees to the Company upon vesting to settle tax withholding obligations.

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”) over the applicable three-year measurement period compared to the SPDR® S&P® Oil & Gas Exploration & Production ETF (“XOP”) Index, and 50% of the PSUs may be earned based on the cumulative free cash flow per share (“FCF”) over the three-year vesting period. As the RTSR PSUs are market-based awards, their grant date fair value was determined using a Monte Carlo simulation model that uses the same input assumptions as the Black-Scholes model to determine the expected potential ranking of the Company against the XOP Index (i.e., the probability of satisfying the market condition defined in the awards). Expected volatility in the model was estimated based on the volatility of historical stock prices over a period matching the expected term of the awards. The risk-free interest rate was based on U.S. Treasury yield constant

maturities for a term matching the expected term of the awards. The inputs for the Monte Carlo simulation model are designated as Level 2 within the fair value hierarchy.

Equity Plan for Non-Employee Directors

The maximum aggregate number of shares of Common Stock that may be issued under the 2021 Directors Plan is 90,000 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, 2025, 69,093 shares of Common Stock remained available under the 2021 Directors Plan for future grants.

The following table summarizes activity related to the RSAs under the 2021 Directors Plan for the years ended December 31, 2025 and 2024:


		Years Ended December 31,
		2025				2024
	Restricted Stock Awards				Restricted Stock Awards
		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		—	$	—		3,402	$	260
Granted (1)		3,564	369			6,480	175
Vested		(3,564)	369			(9,882)	204
Cancelled and forfeited		—	—			—	—
Nonvested at end of period		—	$	—		—	$	—

(1)RSAs vest in full on the date of grant.

Share-Based Compensation Expense

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


	Years Ended December 31,
	2025		2024		2023
Salaries and related employee expenses (employee awards)	$	13,817	$	11,364	$	9,124
General and administrative expenses (director awards)	1,314		1,134		1,219
Total share-based compensation expense (1)	$	15,131	$	12,498	$	10,343

(1)The Company recognized a tax benefit of $3.2 million, $2.6 million, and $2.2 million related to share-based compensation for the years ended December 31, 2025, 2024, and 2023, respectively.

As of December 31, 2025, there was $12.4 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under existing share-based plans expected to be recognized over a weighted average period of 11 months.