Business Context and Reporting Period
This Form 8-K was filed by Kimbell Royalty Partners, LP on April 4, 2019. The report addresses Item 5.02(e) regarding the approval of executive compensation arrangements for the 2019 fiscal year by the Conflicts and Compensation Committee of the General Partner.
Key Financial Metrics
The filing does not provide specific financial performance data such as revenue, profit, cash flow, margins, debt, or liquidity for the reporting period. The document focuses exclusively on the structure of executive compensation.
Material Changes and Compensation Structure
The Committee approved target cash bonuses and Restricted Unit (RSU) grants for 2019 for three named executive officers. The final payout is determined by three quantitative factors and one qualitative factor, each weighted equally at 25%:
- Quantitative Factors: Increasing barrels of oil produced; replacing proved developed producing reserves; controlling cash general and administrative expense per barrel of oil equivalent.
- Qualitative Factor: Achievement of core competencies determined by the Committee.
Payout Tiers:
- 50% of Target: If a factor is not achieved.
- 100% of Target: If a factor is achieved.
- 150% of Target: If a factor is exceeded.
Approved Targets for Named Executive Officers:
| Officer | Title | Target Cash Bonus | Target RSU Grant |
|---|---|---|---|
| Robert D. Ravnaas | CEO | 100% of Base Salary | 155,000 Units |
| R. Davis Ravnaas | President and CFO | 100% of Base Salary | 120,000 Units |
| Matthew S. Daly | COO and Secretary | 100% of Base Salary | 85,000 Units |
Compensation is expected to be granted and paid in March 2020, subject to continued employment.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on market conditions, or specific risk factors beyond the standard contingencies related to executive employment and performance metrics.
Investor Verification Checklist
- Verify the base salaries of the named executive officers to calculate the exact dollar value of the target cash bonuses.
- Monitor the March 2020 payout announcement to confirm actual performance against the quantitative and qualitative targets.
- Review the 2017 Long-Term Incentive Plan for specific vesting schedules and forfeiture conditions regarding the Restricted Units.
- Confirm the company's status as an emerging growth company and its election regarding extended transition periods for accounting standards.