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Share-Based Compensation | 12 Months Ended
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Dec. 31, 2025
Share-Based Payment Arrangement [Abstract] |
Share-Based Compensation | 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, |
|  | 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 | )
(1) The tax benefit associated with share-based compensation expense was $1.1 million for the year ended December 31, 2025. ## 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 y ears. 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) |
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% |
(1) The LBH Incentive Units utilized the same inputs for the modification date fair value as it occurred on the same date as the 7/1/2024 grant date. 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 |
(1) The units outstanding as of December 31, 2024 reflect the effects of the Division and only include the LBH Incentive Units. The grant date fair value per unit amount includes the modification date weighted average per unit fair value of $7,959 per unit. 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 |
(1) The weighted average grant date fair values of RSUs granted was $56.17 and $31.36 for the years ended December 31, 2025 and 2024, respectively. (2) Included within the 269,441 RSUs that vested during the period, 86,661 RSUs were surrendered by employees to the Company to settle tax withholding requirements. The total fair value of RSUs vested was $8.5 million for the year ended December 31, 2025 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.

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