LandBridge Co LLC Stock Compensation Disclosure
10. Share-Based Compensation
A summary of the Company’s aggregate share-based compensation expense (income) is shown below. Share-based compensation expense related to incentive units allocated to the Company is recognized as a deemed non-cash contribution to or distribution from shareholders’ equity on the consolidated balance sheets. Substantially all share-based compensation expense (income) is included in general and administrative expense (income) on the consolidated statements of operations.
|
|
Year Ended December 31, |
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|||||||||
|
|
2025 |
|
|
2024 |
|
|
2023 |
|
|||
Incentive Units |
|
$ |
36,508 |
|
|
$ |
91,307 |
|
|
$ |
(17,230 |
) |
Restricted Share Units |
|
|
8,811 |
|
|
|
4,028 |
|
|
|
- |
|
Total share-based compensation expense (income) (1) |
|
$ |
45,319 |
|
|
$ |
95,335 |
|
|
$ |
(17,230 |
) |
Share-based compensation expense related to incentive units for the year ended December 31, 2025, consists only of the Incentive Units. Share-based compensation expense related to incentive units for the year ended December 31, 2024, consists of $18.7 million related to the Incentive Units, and consists of $72.6 million related to the NDB Incentive Units. Share-based compensation income related to incentive units for the year ended December 31, 2023 consists only of NDB Incentive Units. NDB Incentive Units were liability awards resulting in periodic fair value remeasurement prior to the Division. Following the Division, Incentive Units are equity awards and do not require periodic remeasurements. Any cash expense associated with Incentive Units will be borne solely by LandBridge Holdings and not the Company. Such incentive units are not dilutive of public ownership.
Incentive Units
Prior to the Division, our management and employees participated in an equity-based incentive unit plan managed by NDB LLC, the direct parent of the Company. The NDB Incentive Units consisted of time-based awards of profits interest in NDB LLC.
On July 1, 2024, as a result of the Division, holders of NDB Incentive Units received an identical number of LBH Incentive Units consisting of time-based awards of profits interest in LandBridge Holdings. Pursuant to the Division, the LBH Incentive Units held at LandBridge Holdings are the only incentive units attributable and allocated to the Company.
The incentive units received by the NDB Incentive Unit holders in conjunction with the Division were considered a modification of the awards under ASC 718. As discussed above, the NDB Incentive Units that previously received liability award accounting are now accounted for as equity awards at LandBridge Holdings. In conjunction with the modification, there was no immediate incremental expense recognized as the fair value of the modified equity awards at the modification date was less than the fair value of the liability awards remeasured immediately prior to modification. As of the modification date, the LBH Incentive Units had $24.2 million of unrecognized share-based compensation expense that will be recognized over a weighted average remaining term of 2.0 years.
LBH Incentive Units granted during December 31, 2025 and 2024 were estimated using a Monte Carlo Simulation with the following inputs:
|
|
10/1/2025 |
|
|
12/9/2024 |
|
|
10/29/2024 |
|
|
7/18/2024 |
|
|
7/1/2024(1) |
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|||||
Share price |
|
$ |
55.56 |
|
|
$ |
62.29 |
|
|
$ |
53.84 |
|
|
$ |
28.45 |
|
|
$ |
22.96 |
|
Expected life (in years) |
|
|
2.0 |
|
|
|
2.1 |
|
|
|
2.2 |
|
|
|
2.0 |
|
|
|
1.5 |
|
Risk-free interest rate |
|
|
3.5 |
% |
|
|
4.0 |
% |
|
|
4.0 |
% |
|
|
4.4 |
% |
|
|
4.8 |
% |
Dividend yield |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
|
|
0 |
% |
Volatility |
|
|
40.0 |
% |
|
40% - 76% |
|
|
35% - 72% |
|
|
40% - 132% |
|
|
40% - 225% |
|
||||
Marketability discount |
|
17% - 30% |
|
|
13% - 22% |
|
|
12% - 22% |
|
|
12% - 30% |
|
|
11% - 32% |
|
|||||
A summary of LBH Incentive Units activity during the year ended December 31, 2025 is shown in the following table:
|
|
Incentive Units |
|
|
Weighted Average Grant Date Fair Value |
|
|
Weighted Average Remaining Contractual Term (years) |
|
|||
Outstanding at December 31, 2024 (1) |
|
|
30,020 |
|
|
$ |
5,130 |
|
|
|
|
|
Granted |
|
|
200 |
|
|
|
7,175 |
|
|
|
|
|
Forfeited |
|
|
- |
|
|
|
- |
|
|
|
|
|
Outstanding at December 31, 2025 |
|
|
30,220 |
|
|
$ |
5,144 |
|
|
|
0.9 |
|
As of December 31, 2025, remaining unrecognized compensation expense for the LBH Incentive Units was $45.3 million and the weighted average remaining vesting period was approximately 1.5 years.
Share-based compensation expense for the year ended December 31, 2024, includes $1.2 million of additional expense related to accelerated vesting due to an employee departure. There were no accelerations for the years ended December 31, 2025 and 2023.
Restricted Share Units
Under the LTIP, participants were granted RSUs which are subject to graded vesting generally ranging from one to three years. The fair value of the awards is based on our share price on the date of grant with compensation expense recognized on a straight-line basis over the applicable vesting period.
A summary of RSU activity during the year ended December 31, 2025 is shown in the following table:
|
|
RSUs |
|
|
Weighted Average Grant Date Fair Value |
|
||
Nonvested at December 31, 2024 |
|
|
749,529 |
|
|
$ |
31.37 |
|
Granted (1) |
|
|
57,393 |
|
|
|
56.17 |
|
Forfeited |
|
|
- |
|
|
|
- |
|
Vested (2) |
|
|
(269,441 |
) |
|
|
31.48 |
|
Nonvested at December 31, 2025 |
|
|
537,481 |
|
|
$ |
33.96 |
|
As of December 31, 2025, remaining unrecognized compensation expense for the RSUs was $13.9 million and the weighted average remaining vesting period was approximately 1.8 years.
Defined Contribution Plan
WaterBridge Management Company LLC, an affiliate of the Company, sponsors a defined contribution plan available to all eligible employees. Qualifying participants receive a matching contribution based on the amount participants contribute to the plan up to 7% of their qualifying compensation. Contributions of an immaterial amount were made during the years ended December 31, 2025, 2024 and 2023.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 6, 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.