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Share-Based Compensation Plans

12 Months Ended

Dec. 31, 2024

Share-Based Payment Arrangement [Abstract]

The following table summarizes the Company's share-based compensation expense.


	Years Ended December 31,
	2024		2023		2022

	(Thousands)
Incentive Performance Share Unit Programs	$	20,919	$	23,915	$	23,443

Restricted stock awards	25,473		20,119		23,028
Stock appreciation rights	—		4,056		17,406
Other programs, including non-employee director awards	3,596		3,110		3,534
Total share-based compensation expense (a)	$	49,988	$	51,200	$	67,411

(a)For the years ended December 31, 2024 and 2023, share-based compensation expense of $105.4 million and $3.6 million, respectively, was included in other operating expenses. Share-based compensation expense for 2024 related primarily to the Equitrans Midstream Merger. There were no such costs in 2022.

The Company typically elects to fund awards paid in stock through stock acquired by the Company in the open market or from any other person, issued directly by the Company or any combination of the foregoing. Prior to 2023, the Company typically used treasury stock to fund awards paid in stock.

Cash received from exercises under all share-based payment arrangements for employees and directors for the years ended December 31, 2024 and December 31, 2022 was $5.1 million and $15.9 million, respectively. There was no cash received from exercises under all share-based payment arrangements for employees and directors for the year ended December 31, 2023. During the years ended December 31, 2024, 2023 and 2022, share-based payment arrangements paid in stock generated tax benefits of $7.7 million, $16.5 million and $4.1 million, respectively. Cash paid for taxes related to net settlement of share-based incentive awards for the years ended December 31, 2024, 2023 and 2022 were $102.9 million, $41.8 million and $24.8 million, respectively.

Incentive Performance Share Unit Programs

The Management Development and Compensation Committee of the Company's Board of Directors (the Compensation Committee) has adopted the following programs under each respective Long-Term Incentive Plan (LTIP):

•2020 Incentive Performance Share Unit Program (2020 Incentive PSU Program) under the 2019 LTIP;

•2021 Incentive Performance Share Unit Program (2021 Incentive PSU Program) under the 2020 LTIP;

•2022 Incentive Performance Share Unit Program (2022 Incentive PSU Program) under the 2020 LTIP;

•2023 Incentive Performance Share Unit Program (2023 Incentive PSU Program) under the 2020 LTIP; and

•2024 Incentive Performance Share Unit Program (2024 Incentive PSU Program) under the 2020 LTIP.

The programs noted above are collectively referred to as the Incentive PSU Programs and all granted equity awards.

The Incentive PSU Programs were established to provide long-term incentive opportunities to executives and key employees to further align their interests with those of the Company's shareholders and with the strategic objectives of the Company. The performance period for each of the awards under the Incentive PSU Programs is 36 months, with vesting occurring upon payment following the expiration of the performance period.

Executive performance incentive program awards granted in year 2020 are earned based on:

•adjusted well costs;

•adjusted free cash flow; and

•the level of total shareholder return relative to a predefined peer group.

Executive performance incentive program awards granted in year 2021 are earned based on:

•the level of absolute total shareholder return and total shareholder return relative to a predefined peer group.

Executive performance incentive program awards granted in year 2022 are earned based on:

•the level of absolute total shareholder return and total shareholder return relative to a predefined peer group; and

•the Company's performance in achieving its 2025 net zero Scopes 1 and 2 emissions target.

Executive performance incentive program awards granted in years 2023 and 2024 are earned based on:

•the level of absolute total shareholder return and total shareholder return relative to a predefined peer group.

The payout factor for the 2020 Incentive PSU Program varied between zero to 150% of the number of outstanding units contingent upon the performance metrics listed above. The 2021 Incentive PSU Program, 2023 Incentive PSU Program and 2024 Incentive PSU Program have a payout factor that ranges from zero to 200% and the 2022 Incentive PSU Program has a payout factor that ranges from zero to 220% (which includes the Company's performance in achieving its 2025 net zero Scopes 1 and 2 emissions target). The Company recorded the 2020 Incentive PSU Program, the 2021 Incentive PSU Program, the 2022 Incentive PSU Program, the 2023 Incentive PSU Program and the 2024 Incentive PSU Program as equity awards using a grant date fair value determined through a Monte Carlo simulation, which projected the share price for the Company and its peers at the end point of the performance period. The expected share prices were generated using each company's annual volatility for the expected term and the commensurate three-year risk-free rate shown in the chart below. As the Incentive PSU Programs include a performance condition that affects the number of shares that will ultimately vest, the Monte Carlo simulation computed the grant date fair value for each possible performance condition outcome on the grant date. The Company reevaluates the then-probable outcome at the end of each reporting period to record expense at the probable outcome grant date fair value as applicable. Vesting of the units under each Incentive PSU Program occurs upon payment after the end of the performance period.

The following table summarizes Incentive PSU Programs to be settled in stock and classified as equity awards.


Incentive PSU Programs – Equity Settled	Nonvested Shares	Weighted Average Fair Value			Aggregate Fair Value

Outstanding at December 31, 2021	2,754,648	$	16.08		$	44,281,509
Granted in Period	575,120	29.73		(a)	17,098,318
Granted from Multiplier	162,183	29.45			4,776,289
Vested	(625,563)	29.45			(18,422,830)
Forfeited	(4,398)	13.28			(58,405)
Outstanding at December 31, 2022	2,861,990	16.66			47,674,881
Granted in Period	404,790	38.79			15,701,804
Granted from Multiplier	409,383	6.56			2,685,552
Vested	(1,773,994)	6.56			(11,637,401)
Forfeited	(70,616)	37.59			(2,654,455)
Outstanding at December 31, 2023	1,831,553	28.27			51,770,381
Granted in Period	371,500	40.08			14,889,720
Granted from Multiplier	451,805	23.55			10,640,008
Vested	(1,355,415)	23.55			(31,920,023)
Forfeited	(7,092)	45.94			(325,806)
Outstanding at December 31, 2024	1,292,351	$	34.86		$	45,054,280

(a)The 2022 Incentive PSU Program was granted as a liability award and converted to an equity award in April 2022. The fair value determined through a Monte Carlo simulation at the time of conversion totaled $75.32 per share, which was an increase of $45.59 per share from fair value determined through a Monte Carlo simulation at the grant date.

Total capitalized compensation costs related to the Incentive PSU Programs for the years ended December 31, 2024, 2023 and 2022 were $0.5 million, $0.6 million and $0.6 million, respectively. As of December 31, 2024, $10.2 million and $4.8 million of unrecognized compensation cost (assuming no changes to the performance condition achievement level) related to the 2024 Incentive PSU Program and 2023 Incentive PSU Program, respectively, was expected to be recognized over the remainder of the performance periods.

Fair value is estimated using a Monte Carlo simulation valuation method with the following weighted average assumptions at grant date:


	Incentive PSU Programs Issued During the Years Ended December 31,
	2024	2023 (a)	2022	2021 (a)	2020 (b)

Risk-free rate	4.35%	4.16%	1.52%	0.18%	1.22%
Volatility factor	48.82%	59.31%	65.38%	72.50%	45.41%
Expected term	3 years	3 years	3 years	3 years	3 years

(a)There were two grant dates for the 2023 Incentive PSU Program and the 2021 Incentive PSU Program. Amounts shown represent weighted average.

(b)There were three grant dates for the 2020 Incentive PSU Program. Amounts shown represent weighted average.

Dividends paid from the beginning of the performance period will be cumulatively added as additional shares of common stock; therefore, dividend yield is not applicable.

Restricted Stock Unit Awards

The Company granted 982,990, 953,270 and 1,288,430 restricted stock unit equity awards to employees of the Company during the years ended December 31, 2024, 2023 and 2022, respectively. Awards are subject to a three-year graded vesting schedule commencing with the date of grant, assuming continued service through each vesting date. For the years ended December 31, 2024, 2023 and 2022, the weighted average fair value of these restricted stock unit grants, based on the grant date fair value of EQT common stock, was approximately $34.54, $31.88 and $21.65, respectively.

In conjunction with the Equitrans Midstream Merger, the Company assumed all outstanding and unvested share-based compensation awards of Equitrans Midstream and converted those assumed awards into 5,175,814 restricted stock unit equity awards. Employees who were terminated on the closing date were immediately vested in their Company awards. Company awards of those employees who continued employment with the Company under a transition agreement will vest upon the earlier of (i) the end of the vesting period set forth in the original award agreement or (ii) the end of such employee's employment period set forth in their transition agreement, in both cases subject to continued service through such date. Company awards of those employees who continued employment with the Company on an at will basis will vest in accordance with the vesting period set forth in the original award agreement, assuming continued service through such date. The fair value of these converted restricted stock awards was approximately $106.3 million of post-combination expense as of December 31, 2024.

The total fair value of restricted stock unit equity awards vested during the years ended December 31, 2024, 2023 and 2022 was $155.5 million, $23.5 million and $16.6 million, respectively. Total capitalized compensation costs related to the restricted stock unit equity awards was $9.6 million, $5.7 million and $6.6 million for the years ended December 31, 2024, 2023 and 2022, respectively.

As of December 31, 2024, $44.1 million of unrecognized compensation cost related to nonvested restricted stock unit equity awards was expected to be recognized over a remaining weighted average vesting term of approximately 1.0 year.

The following table summarizes restricted stock unit equity award activity as of December 31, 2024.


Restricted Stock – Equity Settled	Nonvested Shares	Weighted Average Fair Value		Aggregate Fair Value

Outstanding at January 1, 2022	3,104,281	$	12.58	$	39,056,435
Granted	1,288,430	21.65		27,893,331
Vested	(1,368,577)	12.16		(16,644,859)
Forfeited	(97,189)	15.56		(1,512,333)
Outstanding at December 31, 2022	2,926,945	16.67		48,792,574
Granted	953,270	31.88		30,389,954
Vested	(1,544,968)	15.20		(23,482,927)
Forfeited	(117,445)	24.52		(2,879,751)
Outstanding at December 31, 2023	2,217,802	23.82		52,819,850
Granted	982,990	34.54		33,950,507
Vested	(4,861,796)	31.98		(155,480,899)
Conversion of Equitrans Midstream awards	5,175,814	35.88		185,708,206
Forfeited	(90,641)	31.92		(2,893,279)
Outstanding at December 31, 2024	3,424,169	$	33.32	$	114,104,385

Non-Qualified Stock Options

The fair value of the Company's option grants was estimated at the grant date using a Black-Scholes option-pricing model with the assumptions indicated in the table below for the year ended December 31, 2020. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the date of grant. The dividend yield is based on the dividend yield of EQT common stock at the time of grant. Expected volatilities are based on historical volatility of EQT common stock. The expected term represents the period of time that options granted are expected to be outstanding based on historical option exercise experience. There were no stock options granted in 2024, 2023 and 2022.


	Year Ended December 31, 2020

Risk-free interest rate	1.10		%
Dividend yield	—		%
Volatility factor	60.00		%
Expected term	4 years
Number of Options Granted	1,000,000
Weighted Average Grant Date Fair Value	$	1.61

The total intrinsic value of options exercised during the years ended December 31, 2024, 2023 and 2022 was $0.7 million, $1.4 million and $20.2 million, respectively.

The following table summarizes option activity as of December 31, 2024.


Non-Qualified Stock Options	Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value

Outstanding at January 1, 2024	1,523,536	$	18.75
Expired	(193,726)	46.21
Exercised	(134,474)	37.91
Outstanding and Exercisable at December 31, 2024	1,195,336	$	12.14	2.3 years	$	40,604,986

Stock Appreciation Rights

During 2020, the Company granted stock appreciation rights subject to certain performance conditions, such as adjusted well costs and adjusted free cash flow. The participant was entitled to receive, upon exercise, a number of shares of EQT common stock, cash or a combination of the two, based upon the excess of the fair market value as of the date of exercise over a base price of $10.00.

The awards were accounted for as liability awards and, as such, compensation expense was recorded based on the fair value of the awards as remeasured at the end of each reporting period. Assumptions at grant date are indicated in the table below. The risk-free rate was based on the U.S. Treasury yield curve in effect at the reporting date. The dividend yield was based on the dividend yield of EQT common stock at the reporting date. Expected volatilities were based on a 50-50 blend of the expected term-matched historical volatility as of the valuation date and the weighted-average implied volatility from thirty days prior to the valuation date. The expected term represents the period of time between the valuation date and the midpoint of the exercise window.


	2020 Stock Appreciation Rights

Risk-free interest rate	0.30		%
Dividend yield	—		%
Volatility factor	67.50		%
Expected term	3.28 years
Number of Stock Appreciation Rights Granted	1,240,000
Weighted Average Grant Date Fair Value	$	2.61
Total Intrinsic Value of Exercises	$	—

All outstanding stock appreciation rights were exercised during 2023. The total intrinsic value of stock appreciation rights exercised during the year ended December 31, 2023 was $33.4 million. There were no exercises in 2022.

Non-employee Directors' Share-Based Awards

The Company grants to non-employee directors restricted stock unit awards that vest on the date of the Company's annual meeting of shareholders immediately following the grant of such awards. The restricted stock unit awards are settled in EQT common stock on the vesting date or, if elected by the director, following a director's termination of service on the Company's Board of Directors.

Awards granted prior to 2020 that are to be paid in cash are accounted for as liability awards and, as such, compensation expense is recorded based on the fair value of the awards as remeasured at the end of each reporting period. Awards to be settled in EQT common stock are accounted for as equity awards and, as such, compensation expense is recorded based on the fair value of the awards at the grant date fair value. A total of 564,968 non-employee director share-based awards, including accrued dividends, were outstanding as of December 31, 2024. A total of 70,930, 66,300 and 44,800 share-based awards were granted to non-employee directors during the years ended December 31, 2024, 2023 and 2022, respectively. The weighted average fair value of these grants, based on the closing price of EQT common stock on the business day prior to the grant date, was $36.14, $33.31 and $43.97 for the years ended December 31, 2024, 2023 and 2022, respectively.

2025 Awards

Effective in 2025, the Compensation Committee adopted the 2025 Incentive Performance Share Unit Program (2025 Incentive PSU Program) under the 2020 LTIP. The 2025 Incentive PSU Program was established to align the interests of executives and key employees with the interests of shareholders and the strategic objectives of the Company. A total of 374,800 share units were granted under the 2025 Incentive PSU Program. The payout of the share units will vary between zero and 200% of the number of outstanding units contingent upon the Company's absolute total shareholder return and total shareholder return relative to a predefined peer group over the period of January 1, 2025 through December 31, 2027.

Effective in 2025, the Compensation Committee granted 1,111,480 restricted stock unit equity awards that follow a three-year graded vesting schedule commencing with the date of grant, assuming continued employment through each vesting date. The share total includes the Company's "equity-for-all" program, instituted in 2021, pursuant to which the Company grants equity awards to all permanent employees.