INFINITY NATURAL RESOURCES, INC.INR
INFINITY NATURAL RESOURCES, INC. Stock Compensation Disclosure
Share-based Compensation
INR Holdings Incentive Plan
In connection with the closing of the IPO, INR Holdings’ members elected to accelerate the vesting of certain Incentive Units. The Incentive Units were originally issued by INR Holdings and were accounted for under ASC 710. As a result of the acceleration, all unvested Incentive Units vested and were recapitalized into INR Units at a valuation of $20.00 per unit, which reflects the IPO price of the Company’s Class A common stock. This recapitalization resulted in the recognition of $126.1 million of non-recurring compensation expense for the year ended December 31, 2025 and is recorded within the consolidated statement of operations as a component of General and administrative.
Omnibus Incentive Plan
In connection with the IPO, the Company adopted the Infinity Natural Resources, Inc. Omnibus Incentive Plan (the “Plan”). The Plan provides for the grant of stock-based awards to the Company’s employees, non-employee directors, and consultants, including restricted stock units (“RSUs”), performance stock units (“PSUs”), stock options, stock appreciation rights, restricted stock, dividend equivalent rights and other stock or stock-based awards. An aggregate of 5,888,889 shares of Class A common stock have been reserved for issuance under the Plan, subject to adjustments for stock splits, recapitalizations, and other corporate events. We recognize share-based compensation expense in the consolidated statement of operations as a component of General and administrative.
Restricted Stock Units
In connection with the closing of IPO, the Company granted 162,500 RSUs to employees under the Plan. These RSUs vest in full after one year of continuous service. In March and April 2025, the Company granted an additional 311,991 RSUs to certain employees and non-employee directors under the Plan. In July 2025, the Company granted an additional 10,086 RSUs to an employee under the Plan. The RSUs granted to employees generally vest ratably over a -year service period, while the RSUs granted to non-employee directors vest in full on the earlier of (i) the one year anniversary and (ii) the Company's next annual stockholder meeting.
In July and August 2025, the Company accelerated the vesting of 1,779 RSUs awarded to certain former employees based on a pro rata allocation of the service period completed through the date of their respective terminations of employment. This accelerated vesting did not result in any incremental fair value, and therefore, no additional compensation expense was recognized. Upon vesting, the Company issued 1,238 shares of Class A common stock, net of shares withheld to cover employee tax obligations.
The grant-date fair value of each RSU is determined based on the closing stock price of the Company’s Class A common stock on the grant date. Share-based compensation expense related to RSUs is recognized on a straight-line basis over the requisite service period, which corresponds to the vesting terms of the respective awards. We account for forfeitures as they occur. The following table summarizes the RSU activity for the year ended December 31, 2025:
RSUs | Weighted-average grant date fair value | ||||||||||
| Unvested as of beginning of period | — | ||||||||||
| Granted | 485,558 | $ | 18.12 | ||||||||
| Vested and settled | (1,779) | $ | 18.33 | ||||||||
| Canceled/Forfeited | (50,297) | $ | 17.67 | ||||||||
| Unvested as of end of period | 433,482 | $ | 18.17 | ||||||||
The RSUs are entitled to Dividend Equivalent Rights (as defined in the Plan) on unvested RSUs, which are payable only if the underlying RSUs vest. The Company recognized compensation expense for RSUs of $4.7 million for the year ended December 31, 2025.
As of December 31, 2025, unrecognized compensation expense related to unvested RSU awards was $3.2 million, which is expected to be recognized over a weighted-average remaining service period of 1.1 years.
Performance Stock Units
In March 2025, the Company granted 455,601 PSUs under the Plan to certain employees. The PSUs are subject to a performance period from the grant date to December 31, 2027. Vesting is based on the Company's Total Shareholder Return (“TSR”) relative to a defined peer group and the Company's absolute TSR over the performance period. The number of PSUs that may vest ranges from 0% to 300% of the target award, depending on performance outcomes.
The grant-date fair value of the PSUs was estimated using a Monte Carlo simulation model, which reflects the probability of achieving various market-based outcomes and incorporates key assumptions such as expected volatility, risk-free interest rate, expected dividend yield and correlation with the peer group.
| 2025 | |||||
| Expected volatility | 40.00% | ||||
| Risk-free rate | 4.04% | ||||
| Expected dividend yield | —% | ||||
| Correlation with peer group range | 45.00% - 68.00% | ||||
The fair value was determined on the grant date and will not be remeasured. Compensation expense for the PSUs is recognized on a straight-line basis over the requisite service period, which begins on the grant date and ends on the certification date. Expense is recognized regardless of whether the market conditions are ultimately achieved, provided the service condition is satisfied. The Company accounts for forfeitures as they occur. The PSUs are entitled to Dividend Equivalent Rights (as defined in the Plan) on unvested PSUs, which are payable only if the underlying PSUs vest. The following table summarizes the PSU activity for the year ended December 31, 2025:
PSUs | Weighted-average grant date fair value | ||||||||||
| Unvested as of beginning of period | — | ||||||||||
| Granted | 455,601 | $ | 22.20 | ||||||||
| Vested | — | ||||||||||
| Canceled/Forfeited | (29,019) | 22.20 | |||||||||
| Unvested as of end of period | 426,582 | $ | 22.20 | ||||||||
The Company recognized compensation expense for PSUs of $2.5 million for the year ended December 31, 2025, respectively.
As of December 31, 2025, unrecognized compensation expense related to unvested PSU awards was $6.9 million, which is expected to be recognized over a weighted-average remaining service period of 2.2 years.
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.