Kinetik Holdings Inc.KNTK

Kinetik Holdings Inc. Stock Compensation Disclosure

10-KFiled Feb 26, 20263 min read
SHARE-BASED COMPENSATION
Class A Shares and Class C Shares
The table below summarizes Class A Shares and Class C Shares activity for the year ended December 31, 2025:
Number of Shares
Weighted Avg Grant-Date Fair Market Value Per Unit
Outstanding and unvested units as of December 31, 2024
5,399,730 $28.89 
Vested
2,359,102 31.18 
Outstanding and unvested units as of December 31, 2025
3,040,628 $28.58 
The table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested Class A Shares for the years ended December 31, 2025 and 2024. No vesting or forfeitures occurred for Class C Shares during 2025 or 2024.
Year Ended December 31,
20252024
(In thousands)
Aggregate intrinsic value of vested Class A Shares
$134,139 $1,756 
Grant-date fair value of vested Class A Shares
$73,545 $1,346 
As of December 31, 2025, there were $3.3 million of unrecognized compensation costs related to unvested Class A Shares and Class C Shares. These costs are expected to be recognized over a weighted average period of two months.
Restricted Stock Units
The table below summarizes RSUs activity for the year ended December 31, 2025:
Number of Shares
Weighted Avg Grant-Date Fair Market Value Per Unit
Outstanding and unvested units as of December 31, 2024
698,595 $33.11 
Granted604,518 49.08 
Vested347,250 45.49 
Forfeited24,356 41.62 
Outstanding and unvested units as of December 31, 2025(1)
931,507 $40.98 
(1)The weighted average grant-date fair market value per unit of outstanding and unvested shares at December 31, 2025 includes modifications made during 2025.
The table below summarizes aggregate intrinsic value (market value at vesting date) and grant-date fair value of vested RSUs for the years ended December 31, 2025 and 2024.
Year Ended December 31,
20252024
(In thousands)
Aggregate intrinsic value of vested RSUs
$17,091 $21,104 
Grant-date fair value of vested RSUs
$15,796 $20,667 
As of December 31, 2025, there were $11.2 million of unrecognized compensation costs related to unvested RSUs. These costs are expected to be recognized over a weighted average period of 1.61 years.
Performance Stock Units
The table below summarizes PSU activities for the year ended December 31, 2025:
Number of Shares
Weighted Avg Grant-Date Fair Market Value Per Unit
Outstanding and unvested units as of December 31, 2024
198,703 $36.76 
Granted
148,794 40.66 
Outstanding and unvested units as of December 31, 2025(1)
347,497 $41.41 
(1)The weighted average grant-date fair market value per unit of outstanding and unvested shares at December 31, 2025 includes modifications made during 2025
No vesting or forfeiture occurred for PSUs for the year ended December 31, 2025.
The table below presents a summary of the grant-date fair value assumptions used to value the PSUs on the grant date:
March 2025
Grant-date fair value per unit$42.10
Beginning average price
$55.95
Risk-free interest rate3.93%
Volatility factor33%
Expected term
2.82 years
As of December 31, 2025, there were $7.8 million of unrecognized compensation costs related to the PSUs. These costs are expected to be recognized over a weighted average period of 1.55 years.
With respect to the above Class A Shares, Class C Shares, RSUs and PSUs, the Company recorded compensation expenses of $62.6 million, $76.5 million and $56.0 million in “General and administrative expenses” of the Consolidated
Statements of Operations, for the years ended December 31, 2025, 2024 and 2023, respectively, based on a straight-line amortization of the associated awards’ fair value over the respective vesting life of the shares. In addition, during the first half of 2025, the Company modified certain equity awards in connection with two key employees retiring from the Company. The modifications allowed for continued vesting of unvested equity awards that would have otherwise been forfeited upon the former employees’ retirement. As a result of the modifications, the Company recognizes $2.9 million in additional stock-based compensation cost, which is amortized over the remaining term of respective equity awards.

Historical Timeline

Fiscal YearFiled
2025Feb 26, 2026Showing above
2024Mar 3, 2025
2023Mar 5, 2024
2022Mar 7, 2023

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.

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