Diamondback Energy, Inc.FANG
Diamondback Energy, Inc. Stock Compensation Disclosure
EQUITY-BASED COMPENSATION
Under the Equity Plan approved by the board of directors, the Company is authorized to issue up to 11.8 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, 2025, approximately 3.80 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, | |||||||||||||||||
| 2025 | 2024 | 2023 | |||||||||||||||
| (In millions) | |||||||||||||||||
| General and administrative expenses | $ | 81 | $ | 65 | $ | 54 | |||||||||||
| Equity-based compensation capitalized pursuant to full cost method of accounting for oil and natural gas properties | $ | 33 | $ | 30 | $ | 26 | |||||||||||
Restricted Stock Units
The following table presents the Company’s restricted stock unit activity during the year ended December 31, 2025 under the Equity Plan:
| Restricted Stock Units | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at December 31, 2024 | 645,408 | $ | 159.84 | ||||||||
| Granted | 722,623 | $ | 148.86 | ||||||||
| Vested | (400,017) | $ | 154.66 | ||||||||
| Forfeited | (77,952) | $ | 152.86 | ||||||||
Unvested at December 31, 2025 | 890,062 | $ | 153.87 | ||||||||
The aggregate grant date fair value of restricted stock units that vested during the years ended December 31, 2025, 2024 and 2023 was $62 million, $57 million and $48 million, respectively. As of December 31, 2025, the Company’s unrecognized compensation cost related to unvested restricted stock units was $105 million, which is expected to be recognized over a weighted-average period of 2.1 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 TSR of the Company’s common stock as compared to a designated peer group during a three-year performance period.
In March 2025, eligible employees received performance restricted stock unit awards totaling 171,638 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of TSR of the Company’s common stock as compared to a designated peer group during the three-year performance period of January 1, 2025 to December 31, 2027, and cliff vest at December 31, 2027, subject to continued employment. The initial payout of the March 2025 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 May 2025 the Company granted 14,881 performance restricted stock units under substantially the same terms as the March 2025 performance restricted stock unit awards.
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 TSR 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% units could be awarded based upon the TSR during the three-year performance period of January 1, 2023 to December 31, 2025. These awards cliff vested at 200% on December 31, 2025 based upon the outcome of the TSR during the performance period, which did not result in a further TSR modifier being applied. Additionally, in July 2023 the Company granted 1,858 units under substantially the same terms as the March 2023 performance restricted stock unit awards.
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 and the related assumptions for the awards granted during the periods presented:
| March 2025 | May 2025 | March 2024 | September 2024 | March 2023 | July 2023 | ||||||||||||||||||||||||||||||
| Grant-date fair value | $ | 222.34 | $ | 167.75 | $ | 341.38 | $ | 337.23 | $ | 259.52 | $ | 222.09 | |||||||||||||||||||||||
| Risk-free rate | 3.99 | % | 4.00 | % | 4.38 | % | 3.54 | % | 4.64 | % | 4.70 | % | |||||||||||||||||||||||
| Company volatility | 34.60 | % | 33.30 | % | 41.40 | % | 34.40 | % | 46.90 | % | 47.20 | % | |||||||||||||||||||||||
The following table presents the Company’s performance restricted stock unit activity under the Equity Plan for the year ended December 31, 2025:
| Performance Restricted Stock Units | Weighted Average Grant-Date Fair Value | ||||||||||
Unvested at December 31, 2024 | 278,902 | $ | 278.72 | ||||||||
| Granted | 314,724 | $ | 129.19 | ||||||||
| Vested | (263,000) | $ | 130.23 | ||||||||
| Forfeited | (2,695) | $ | 254.31 | ||||||||
Unvested at December 31, 2025(1) | 327,931 | $ | 254.50 | ||||||||
(1)A maximum of 780,276 units could be awarded based upon the Company’s final TSR ranking.
As of December 31, 2025, the Company’s unrecognized compensation cost related to unvested performance based restricted stock awards and units was $43 million, which is expected to be recognized over a weighted-average period of 1.7 years.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 25, 2026 | Showing above |
| 2023 | Feb 22, 2024 | |
| 2022 | Feb 23, 2023 | |
| 2021 | Feb 24, 2022 | |
| 2020 | Feb 25, 2021 | |
About Stock Compensation Disclosures
Stock-based compensation disclosures detail the equity awards granted to employees and executives — including stock options, restricted stock units (RSUs), and performance shares — along with the valuation methods and assumptions used to expense them. This section reveals the true cost of talent retention and the alignment between management incentives and shareholder interests.
Key signals: total unrecognized compensation expense and its expected recognition period signal future earnings headwinds from already-granted awards. For stock options, examine Black-Scholes assumptions — expected volatility, risk-free rate, and expected term — as understating any of these reduces reported compensation expense. Compare stock compensation expense as a percentage of revenue against peers to assess dilution cost. Watch vesting schedules for acceleration clauses tied to change-of-control events. Performance-based awards with undemanding targets may indicate weak governance. Add back stock compensation to operating cash flow to calculate a more conservative free cash flow figure.