Texas Pacific Land Corp

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2024 Business and Financial Performance Highlights(1)

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(1)

All share and share price amounts reflect the three-for-one stock split effected on March 26, 2024.

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(2)

Adjusted EBITDA and free cash flow are non-GAAP financial measures. Reconciliations of non-GAAP measures are provided in Appendix A attached hereto.

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(3)

Based on the closing stock price per share of our Common Stock as of December 31, 2024 compared to the closing price per share of our Common Stock as of December 31, 2023, in each case, as reported on the NYSE.

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Key Aspects of 2024 Design

Following a substantial redesign of our compensation programs in 2022, and based on positive feedback from our stockholders, the Compensation Committee generally maintained the overall compensation program structure in 2024. This program design is based on typical practices among our Reference Group (see below) while reflecting the unique aspects of TPL. The compensation program design is intended to meet the following objectives:

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Align executives’ financial interests more closely with stockholders;

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Tie a substantial portion of executive compensation with the Company’s performance (both stock price and financial performance) to incorporate risk into the awards, while relying heavily on formulaic incentive compensation;

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Incorporate long-term vesting periods for a substantial portion of executive compensation to help ensure continuity of the management team;

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Ensure transparency for participants and stockholders about how outcomes are determined with an appropriate and competitive level of pay at risk;

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Meet common governance standards for public companies, and assess and control the program to avoid creating undue risk or encouraging excessive risk-tasking by executives; and

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Ensure a competitive compensation program.

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We believe that our program, including awards under the Texas Pacific Land Corporation 2021 Incentive Plan (the “2021 Plan”), has an appropriate balance of risk and reward in relation to our overall business strategy and that the balance of compensation elements discourages excessive risk-taking.

We have maintained the key aspects of our compensation program for 2025.

Decision-Making Process

Compensation Philosophy and Approach

TPL’s 2024 executive compensation program was designed to recruit and retain an executive team and to reward performance in achieving TPL’s goal of creating stockholder value. The 2024 executive compensation program consisted principally of a salary, an annual cash incentive (sometimes referred to as awards under a non-equity incentive plan), and long-term share-based compensation as discussed below:

As part of its compensation program, TPL also maintains both a qualified defined benefit pension plan (the “Pension Plan”) and a qualified defined contribution plan which are both available to employees generally, including the Named Executive Officers. These plans are designed to assist employees in planning for their retirement. The Pension Plan was frozen as of December 31, 2024 and no future benefit accruals will be made. In conjunction with freezing the Pension Plan, the Board has approved a discretionary contribution to employees’ 401(k) plan for 2025. See further discussion of the freezing of the Pension Plan in Note 8, “Pension and Other Postretirement Benefits” in the notes to our consolidated financial statements included in the Annual Report in Part II, Item 8. “Financial Statements and Supplementary Data.”

Consideration of 2024 Say on Pay Vote; Stockholder Engagement

At our November 2024 annual meeting of stockholders, the majority of our stockholders voted to approve our executive compensation program, with approximately 88% approval among votes cast. The Compensation Committee viewed this as support of its approach and philosophy and as a basis for continuing with the program described in this CD&A for 2024.

In 2024, we reached out to stockholders representing 48% of our outstanding shares of Common Stock and held meetings with stockholders representing 32% of our outstanding shares of Common Stock (measured as of September 3, 2024) to discuss their perspectives on various issues, including executive compensation. Independent members of our Board participated in and led each of these meetings with stockholders. The participating members of our Board were joined in these meetings by one or more of the Company’s Chief Executive Officer, Chief Financial Officer, Senior Vice President, Secretary and General Counsel, and Vice President of Finance and Investor Relations.

Following these meetings, the Compensation Committee met with senior management to discuss what we learned during this comprehensive outreach process. In general, we learned that stockholders were not seeking significant changes to our compensation program. Many expressed support for our overall compensation philosophy and suggested modest changes, including enhancing our proxy statement disclosures and increasing the proportion of performance-based equity that we award over time.

In 2025, we engaged ICR to conduct a perception study survey of our stockholders to consider their perspectives on various issues, including strategy, capital allocation, governance and investor relations. ICR contacted approximately 50 participants and asked broadly for feedback on our governance and overall thoughts on performance. Respondents

generally acknowledged recent changes such as the declassification of the Board and stockholders’ ability to call a special meeting as positives. Respondents also stated that the Company’s conversion to a C-corporation has been a success. Respondents did not provide specific feedback on or suggest any changes to our compensation program.

See “Corporate Governance and Board Structure — Stockholder Engagement and Communications with Directors” on page 24 above for a detailed discussion of the Company’s stockholder engagement efforts, including stockholder engagement regarding executive compensation, and how feedback from stockholders impacted decisions made with respect to our 2025 executive compensation program.

Role of the Compensation Committee

The Compensation Committee has the sole authority to determine the compensation of the Named Executive Officers other than the Chief Executive Officer and to make recommendations to the Board, which has the authority to make final decisions, with respect to the compensation of the Chief Executive Officer. The Compensation Committee is also responsible for developing and overseeing an equity compensation program for the Company generally for other employees, and for making recommendations to the Board with respect to compensation for non-employee directors, with assistance from the Compensation Committee’s independent compensation consultant.

In establishing the Named Executive Officers’ compensation for 2024, the chair of the Compensation Committee and the full Compensation Committee met multiple times, including with management and/or the Compensation Committee’s independent compensation consultant, to review market practices, evaluate potential alternatives, determine appropriate metrics and goals, and review strategic goals and performance.

Role of Management

Our Chief Executive Officer, Mr. Glover, provided recommendations for compensation for his direct reports. Additionally, the management team provided the Compensation Committee with financial performance information to assist with the assessment of company and individual performance in determining the bonuses for 2024. The Compensation Committee considered this information in its decision-making process. No member of management participated in discussions relating to his or her own compensation.

Role of the Independent Consultant

Since 2021, the Compensation Committee has used Meridian Compensation Partners (“Meridian”) as its independent compensation consultant to assist the Compensation Committee in fulfilling its responsibilities related to the oversight of TPL’s executive officer and non-employee director compensation. The Compensation Committee determined that Meridian was independent from management based upon the consideration of various relevant factors, including that Meridian did not provide any services to TPL except advisory services to the Compensation Committee, and that Meridian maintained, and adhered to, policies and procedures that were designed to prevent conflicts of interests.

The independent compensation consultant advises the Compensation Committee in the development of pay strategies regarding our executive officers, including our Chief Executive Officer, and non-employee directors. The Compensation Committee reviews and discusses matters involving executive officer and non-employee director compensation. Following this review, the Compensation Committee makes a determination and/or recommendation to the Board, as applicable under the Compensation Committee’s Charter, regarding, among other things (a) the compensation of the Chief Executive Officer and the compensation of executive officers other than the Chief Executive Officer, in each case including salary, bonus, benefits, incentive awards and perquisites, and (b) compensation for TPL’s non-employee directors.