Diamondback Energy, Inc.

10. EQUITY-BASED COMPENSATION

Under the Equity Plan approved by the board of directors, the Company is authorized to issue up to 11.8 million shares of incentive and non-statutory stock options, restricted stock awards and restricted stock units (“RSUs”), performance-based restricted stock units (“PSUs”) and stock appreciation rights to eligible employees. At June 30, 2026, the Company had outstanding RSUs and PSUs and approximately 3.0 million shares of common stock remain available for future grants under the Equity Plan. The Company classifies its RSUs and PSUs as equity-based awards and estimates their fair values based on the closing price of the Company’s common stock on the grant date of the award, which is expensed over the applicable vesting period.

In addition to the Equity Plan, Viper maintains its own long-term incentive plan, which is not significant to the Company.

The following table presents the financial statement impacts of equity compensation plans and related costs on the Company’s financial statements:

Restricted Stock Units

The following table presents the Company’s RSU activity during the six months ended June 30, 2026, under the Equity Plan:

The aggregate grant date fair value of restricted stock units that vested during the six months ended June 30, 2026, was $22 million. As of June 30, 2026, the Company’s unrecognized compensation cost related to unvested restricted stock units was $157 million, which is expected to be recognized over a weighted-average period of 2.2 years.

Performance-Based Restricted Stock Units

The following table presents the Company’s PSU activity under the Equity Plan for the six months ended June 30, 2026:

(1)A maximum of 1,160,668 units could be awarded based upon the Company’s final TSR ranking.

As of June 30, 2026, the Company’s unrecognized compensation cost related to unvested PSUs was $63 million, which is expected to be recognized over a weighted-average period of 1.7 years.

In March 2026, eligible employees received PSU awards totaling 170,279 units from which a minimum of 0% and a maximum of 200% of the units could be awarded based upon the measurement of TSR of the Company’s common stock as compared to a designated peer group during thethree-year performance period of January 1, 2026, to December 31, 2028, and cliff vest at December 31, 2028, subject to continued employment. The initial payout of the March 2026 awards will be further adjusted by a TSR modifier that may reduce the payout or increase the payout up to a maximum of 250%.

The fair value of each PSU issuance is estimated at the date of grant using a Monte Carlo simulation, which results in an expected percentage of units to be earned during the performance period.

The following table presents a summary of the grant-date fair values of PSUs granted and the related assumptions for the awards granted during the period presented: