Kimbell Royalty Partners, LP Stock Compensation Disclosure
NOTE 12—UNIT-BASED COMPENSATION
On May 1, 2024, the Board of Directors approved and adopted the first amendment to the Amended and Restated Kimbell Royalty GP, LLC 2017 Long-Term Incentive Plan (as so amended, the “A&R LTIP”), which increased the number of common units available to be awarded under the A&R LTIP by 4,684,622 common units, which increased the total number of common units available to be awarded under the A&R LTIP, after taking into account previously awarded common units, to 6,765,012 common units. The Partnership’s A&R LTIP authorizes grants to its employees and directors. The restricted units under the Partnership’s A&R LTIP generally vest in -third installments on each of the first anniversaries of the grant date, subject to the grantee’s continuous service through the applicable vesting date. Compensation expense for such awards will be recognized over the term of the service period on a straight-line basis over the requisite service period for the entire award. Management elects not to estimate forfeiture rates and to account for forfeitures in compensation cost when they occur.
Distributions related to the restricted units are paid concurrently with the Partnership’s distributions for common units. The fair value of the Partnership’s restricted units under the A&R LTIP to the Partnership’s employees and directors is determined by utilizing the market value of the Partnership’s common units on the respective grant date.
The following table presents a summary of the Partnership’s unvested restricted units.
Weighted | | Weighted | |||||
Average | Average | ||||||
Grant-Date | Remaining | ||||||
Fair Value | Contractual | ||||||
Units | per Unit | Term | |||||
Unvested at December 31, 2024 | 1,992,201 | $ | 15.727 |
| 1.542 years | ||
Awarded | 1,213,611 | 15.780 | — | ||||
Vested | (975,338) | 15.519 | — | ||||
Forfeited | (4,078) | 15.633 | — | ||||
Unvested at December 31, 2025 (1) | 2,226,396 | $ | 15.847 |
| 1.575 years | ||
v
| (1) | As of December 31, 2025, there was $35.3 million of unrecognized compensation expense associated with unvested restricted units based on the weighted average grant date fair value per unit of $15.847. |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Feb 27, 2025 | |
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.