UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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Securities Exchange Act of 1934 (Amendment No.)

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March 15, 2024​

Fellow Stockholders:

We are pleased to invite you to attend NRG Energy, Inc.’s Annual Meeting of Stockholders, which will be held virtually via the Internet at 9:00 a.m. Eastern Time on Thursday, April 25, 2024 at www.virtualshareholdermeeting.com/NRG2024.

Details regarding attendance and the business to be conducted at the Annual Meeting are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.

Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. Information about voting methods is set forth in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.

On behalf of everyone at NRG, I thank you for your ongoing interest and investment in NRG Energy Inc. We are committed to acting in your best interests. If you have any questions with respect to voting, please call our proxy solicitor, MacKenzie Partners, Inc., at (800) 322-2885 (toll free).

Sincerely,

Interim President, Chief Executive Officer and Chair of the Board

THIS PROXY STATEMENT AND THE PROXY CARD ARE
BEING DISTRIBUTED ON OR ABOUT MARCH 15, 2024.

 

NRG Energy, Inc.
910 Louisiana Street, Houston, Texas 77002

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

When: Thursday, April 25, 2024, 9:00 a.m. Eastern Time

Where: Via the internet at www.virtualshareholdermeeting.com/NRG2024

We are pleased to invite you to join our Board of Directors and senior leadership at the NRG Energy, Inc. 2024 Annual Meeting of Stockholders. For more information about the Annual Meeting, including how stockholders can ask questions during the Annual Meeting, please see page 99 of the accompanying Proxy Statement.

 

Table of Contents

2024 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT

​	PROXY STATEMENT HIGHLIGHTS	​	​	​	​	1	​	​
​	PROXY STATEMENT	​	​	​	​	7	​	​
​	GOVERNANCE OF THE COMPANY	​	​	​	​	10	​	​
​	PROPOSALS TO BE VOTED	​	​	​	​	37	​	​
​	Proposal No. 1: Election Of Directors	​	​	​	​	37	​	​
​	Director Compensation	​	​	​	​	45	​	​
​	Proposal No. 2: Advisory Vote To Approve Executive Compensation	​	​	​	​	48	​	​
​	Proposal No. 3: Ratification Of Independent Registered Public Accounting Firm For The 2024 Fiscal Year	​	​	​	​	49	​	​
​	EXECUTIVE OFFICERS	​	​	​	​	50	​	​
​	STOCK OWNERSHIP OF DIRECTORS, NAMED EXECUTIVE OFFICERS AND CERTAIN BENEFICIAL OWNERS	​	​	​	​	52	​	​
​	DELINQUENT SECTION 16(A) REPORTS	​	​	​	​	54	​	​
​	CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS	​	​	​	​	55	​	​
​	EXECUTIVE COMPENSATION	​	​	​	​	56	​	​
​	COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION	​	​	​	​	91	​	​
​	COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION	​	​	​	​	91	​	​
​	AUDIT COMMITTEE REPORT	​	​	​	​	92	​	​
​	INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM	​	​	​	​	93	​	​
​	Audit and Non-Audit Fees	​	​	​	​	93	​	​
​	Audit Fees	​	​	​	​	93	​	​
​	Audit-Related Fees	​	​	​	​	93	​	​
​	Tax Fees	​	​	​	​	93	​	​
​	All Other Fees	​	​	​	​	93	​	​
​	Policy On Audit Committee Pre-Approval	​	​	​	​	94	​	​

​	QUESTIONS AND ANSWERS	​	​	​	​	95	​	​
​	What Is The Purpose Of The Annual Meeting?	​	​	​	​	95	​	​
​	Who Is Entitled To Vote At The Annual Meeting?	​	​	​	​	95	​	​
​	How Many Votes Do I Have?	​	​	​	​	95	​	​
​	What Are The Recommendations Of The Board Of Directors?	​	​	​	​	96	​	​
​	How Many Votes Must Be Present To Hold The Annual Meeting?	​	​	​	​	96	​	​
​	What Vote Is Required To Approve Each Proposal?	​	​	​	​	96	​	​
​	What Are Abstentions And Broker Non-Votes And How Are They Treated?	​	​	​	​	97	​	​
​	How Do I Vote Before The Annual Meeting?	​	​	​	​	97	​	​
​	May I Change My Vote?	​	​	​	​	98	​	​
​	How Can I Vote During The Annual Meeting?	​	​	​	​	98	​	​
​	What Happens If I Do Not Provide Instructions As To How To Vote?	​	​	​	​	98	​	​
​	Where Can I Obtain The List Of Stockholders Entitled To Vote?	​	​	​	​	98	​	​
​	How Can I Ask Questions During The Annual Meeting?	​	​	​	​	99	​	​
​	Who Pays The Cost Of Solicitation Of Proxies?	​	​	​	​	99	​	​
​	Who Is The Company’s Transfer Agent?	​	​	​	​	99	​	​
​	Why Did I Receive A One-Page Notice In The Mail Regarding The Internet Availability Of Proxy Materials Instead Of A Full Set Of Proxy Materials?	​	​	​	​	99	​	​
​	What Is “Householding”?	​	​	​	​	100	​	​
​	How Can I Request Additional Materials?	​	​	​	​	100	​	​
​	Whom Should I Call If I Have Questions About The Annual Meeting?	​	​	​	​	100	​	​
​	STOCKHOLDER PROPOSALS AND DIRECTOR NOMINATIONS FOR THE 2025 ANNUAL MEETING OF STOCKHOLDERS	​	​	​	​	101	​	​

 

Proxy Statement Highlights

This summary highlights information contained elsewhere in this Proxy Statement. This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. For more complete information regarding NRG Energy, Inc.’s 2023 performance, please review NRG Energy, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2023.

ROADMAP OF VOTING MATTERS

Stockholders are being asked to vote on the following matters at the 2024 Annual Meeting of Stockholders (Annual Meeting) of NRG Energy, Inc. (NRG or the Company):

 

1

CORPORATE GOVERNANCE HIGHLIGHTS

We are committed to maintaining the highest standards of corporate governance, which promote the long-term interests of our stockholders, strengthen Board and management accountability, and help build public trust in the Company. The Governance of the Company section beginning on page 10 describes our corporate governance framework, which includes the following:

 

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SUSTAINABILITY HIGHLIGHTS

NRG recognizes sustainability’s role in the energy transition and believes in leveraging market-driven solutions to address associated challenges and opportunities. Integral to our success is our workforce, guided by our dedication to safety, health, and wellness. NRG’s sustainability philosophy also extends outside of our company to our customers through increasingly cleaner and smarter customer solutions and through initiatives that make a meaningful difference in our communities. Our longstanding commitment to sustainability is reflected in the 2023 highlights below. The Sustainability at NRG section beginning on page 27 describes our sustainability framework.

 

3

EXECUTIVE COMPENSATION HIGHLIGHTS

The objectives of our executive compensation program are to align executive pay with stockholder value and to incentivize executives to achieve our corporate goals. The Compensation Discussion and Analysis section beginning on page 57 describes our executive compensation program, which includes the following:

 

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SUMMARY OF DIRECTOR NOMINEES

 

5

QUESTIONS AND ANSWERS

Please see the Questions and Answers section beginning on page 95 for important information about the proxy materials, voting and the 2024 Annual Meeting of Stockholders. Additional questions may be directed to our proxy solicitor, MacKenzie Partners, Inc., at (800) 322-2885 or proxy@mackenziepartners.com.

LEARN MORE ABOUT OUR COMPANY

You can learn more about the Company, view our governance materials and much more by visiting our website, www.nrg.com. Information contained on our website is not incorporated into or a part of this Proxy Statement.

Please also visit our 2024 Annual Meeting of Stockholders website at www.proxyvote.com to easily access the Company’s proxy materials or vote through the Internet.

 

6

Proxy Statement

We are providing these proxy materials to you in connection with the solicitation of proxies by the Board of Directors of NRG Energy, Inc. (Board) for the 2024 Annual Meeting of Stockholders (Annual Meeting) and for any adjournment or postponement of the Annual Meeting. The Annual Meeting will be held virtually via the Internet on Thursday, April 25, 2024, 9:00 a.m. Eastern Time at www.virtualshareholdermeeting.com/NRG2024. In this Proxy Statement, “we,” “us,” “our,” “NRG” and the “Company” refer to NRG Energy, Inc.

You are receiving this Proxy Statement because you own shares of our common stock, par value $0.01 per share that entitle you to vote at the Annual Meeting. By use of a proxy, you can vote whether or not you attend the Annual Meeting. This Proxy Statement describes the matters on which we would like you to vote and provides information on those matters.

Each of the Notice of Annual Meeting, this Proxy Statement and our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (Annual Report on Form 10-K) is available at www.proxyvote.com. If you would like to receive, without charge, a paper copy of our Annual Report on Form 10-K, including the financial statements and the financial statement schedules, please send your request to Investor Relations, 804 Carnegie Center, Princeton, New Jersey 08540.

Forward-Looking Statements. This Proxy Statement contains information that may constitute “forward-looking statements.” Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “target,” “may,” “will” and similar expressions identify forward-looking statements, which generally are not historical in nature. However, the absence of these words or similar expressions does not mean that a statement is not forward-looking. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future, including statements expressing general views about future operating results, are forward-looking statements. Management believes that these forward-looking statements are reasonable as and when made. However, caution should be taken not to place undue reliance on any such forward-looking statements because such statements speak only as of the date when made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause the Company’s actual results to differ materially from historical experience and present expectations or projections. These risks and uncertainties include, but are not limited to, those described in Item 1A — Risk Factors in our Annual Report on Form 10-K and those described from time to time in our future reports filed with the Securities and Exchange Commission (SEC).

 

7

ABOUT NRG

NRG sits at the intersection of energy and home services. NRG is a leading energy and home services company fueled by market-leading brands, proprietary technologies and complementary sales channels. Across the U.S. and Canada, NRG delivers innovative, sustainable solutions, predominately under brand names such as NRG, Reliant, Direct Energy, Green Mountain Energy and Vivint, while also advocating for competitive energy markets and customer choice. NRG has a customer base that includes approximately 8 million residential consumers in addition to commercial, industrial, and wholesale customers, supported by approximately 13 GW of generation as of December 31, 2023.

NRG sold 152 TWhs of electricity and 1,892 MMDth of natural gas in 2023, making it one of the largest competitive energy retailers in the U.S. As of the end of 2023, NRG had recurring electricity and/or natural gas sales in 25 U.S. states, the District of Columbia, and 8 provinces in Canada, and Vivint served customers in all 50 U.S. states. NRG’s retail brands, collectively, have the largest share of competitively served residential electric customers in Texas and nationwide.

The following chart represents NRG’s sales volumes for the year ended December 31, 2023:

 

8

COMPANY STRATEGY

NRG’s strategy is to maximize stakeholder value by being a leader in the emerging convergence of energy and smart automation in the home and business. Through a diversified supply strategy, the Company sells reliable electricity and natural gas to its customers in the markets it serves, while also providing innovative home solutions to customers. NRG’s unique combination of assets and capabilities enables the Company to develop and sell highly differentiated offerings that bring together everyday essential services like powering and securing the home through a seamless and integrated experience. This strategy is intended to enable the Company to optimize its unique integrated platform to delight customers, generate recurring cash flow, significantly strengthen earnings and cost competitiveness, and lower risk and volatility. Sustainability is a philosophy that underpins and facilitates value creation across NRG’s business for its stakeholders. It is an integral piece of NRG’s strategy and ties directly to business success, reduced risks and enhanced reputation.

To effectuate the Company’s strategy, NRG is focused on:

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serving the energy needs of end-use residential, commercial and industrial, and wholesale counterparties in competitive markets and optimizing additional revenue opportunities through its multiple brands and channels;

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offering a variety of energy products and services, including renewable energy solutions and smart home products and services that are differentiated by innovative features, premium service, integrated platforms, sustainability and loyalty/affinity programs;

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excellence in operating performance of its assets;

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achieving the optimal mix of supply to serve its customer load requirements through a diversified supply strategy; and

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engaging in disciplined and transparent capital allocation.

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9

Governance of the Company

CORPORATE GOVERNANCE GUIDELINES AND CHARTERS

The Board has adopted Corporate Governance Guidelines (Guidelines) that, along with the Amended and Restated Certificate of Incorporation, as amended, the Sixth Amended and Restated By-Laws (Bylaws) and the charters of the committees of the Board (Committees), provide the framework for the governance of the Company. The Board’s Governance and Nominating Committee is responsible for periodically reviewing the Guidelines and recommending any proposed changes to the Board for approval. In November  2023, we amended our Corporate Governance Guidelines and adopted a lead independent director charter to establish the role and responsibilities of a lead independent director when the roles of Chief Executive Officer (CEO) and Chair of the Board are held by the same person. The Guidelines are available on the Governance section of the Company’s investor relations website at https://investors.nrg.com, along with the charters of all of the Committees and the Company’s Code of Conduct. The Guidelines, the charters of all of the Committees and the Code of Conduct are also available in print to any stockholder upon request. Stockholders who desire to receive such items in print may request them from the Company’s Corporate Secretary by writing to NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540.

GOVERNANCE PRACTICES

The Board and Company are committed to maintaining the highest standards of corporate governance practices and principles. The Board has taken a proactive approach in applying leading governance practices to its structure. Furthermore, as described in the Guidelines, the Board follows a series of governance practices that it believes foster effective Board oversight and accountability to you, our stockholders. These practices include:

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Executive and director stock ownership guidelines to align interests with our stockholders;

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Ongoing succession planning for the CEO and other senior management;

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Annual performance evaluations of the Board and each of its standing Committees, as well as peer feedback for individual directors;

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Director orientation and continuing education program, including Company site visits and information sessions with Company management;

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Access to and engagement of outside advisors and consultants to assist the Board and the Committees in the performance of their duties, as appropriate; and

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Active engagement with our stockholders regarding governance practices and other matters.

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10

PROXY ACCESS

To facilitate engagement with our stockholders, our Bylaws provide for proxy access. Under the proxy access provisions in our Bylaws, a stockholder (or group of up to 20 stockholders) continuously owning at least 3% of our outstanding common stock for a period of at least three years prior to the date of the nomination may nominate and include in our proxy materials for the following annual meeting director nominees constituting up to 20% of the Board. To do so, the stockholder must submit the information required by Article II, Section 15 of our Bylaws to the Company’s Corporate Secretary as described further under “Director Nominees for Inclusion in the Proxy Materials for the 2025 Annual Meeting of Stockholders (Proxy Access).”

RISK OVERSIGHT

The Board performs its risk oversight function in several ways. The Board monitors, reviews and reacts to strategic and corporate risks through reports by management, including the enterprise risk management team, which is further described below, and through the Committees of the Board. While several Committees have responsibilities for addressing risk, the Board primarily conducts this oversight function through the Finance and Risk Management Committee. The Finance and Risk Management Committee is responsible for company-wide enterprise risk management. The Company’s enterprise risk management team, comprised of senior management and key personnel in and around the finance, commercial operations and risk functions, reports to the Board’s Finance and Risk Management Committee on a regular basis.

 

11

BOARD COMMITTEES RISK OVERSIGHT FOCUS

The table below summarizes the significant role the various Committees play in carrying out the risk oversight function.

The Chairs of each of the Committees regularly report to the Board on all matters reviewed by their respective Committees, thereby providing the Board with the opportunity to identify and discuss any risk-related issues or request additional information from management or the Committees that may assist the Board in its risk oversight role. To this end, risk-related issues presented to the Committees are routinely presented to the full Board to ensure proper oversight.

 

12

BOARD STRUCTURE AND LEADERSHIP

Directors stand for election annually. Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation or removal. On November 20, 2023, the Company entered into a Cooperation Agreement with Elliott Investment Management L.P. and its affiliates (together Elliott). Pursuant to the Cooperation Agreement, as further described on page 37, we agreed to increase the size of our Board to thirteen (13) directors and appoint Messrs. Fawaz, Howell, and Pourbaix, and Ms. Zlotnik as new independent members of the Board.

Historically, NRG’s governance structure has been led by a separate CEO and Chair of the Board. The Board believes that an effective board leadership structure is highly dependent on the experience, skills and personal interaction between persons in leadership roles. As stated in the Guidelines, the Board believes that it is in the best interest of the Company for the Board to make a determination regarding separation of the roles of Chair and CEO based upon the present circumstances. In November 2023, in connection with the departure of Mauricio Gutierrez, Dr. Coben was named Interim President and CEO (Interim CEO) while maintaining his role as Chair of the Board. The Board amended the Guidelines to add the role of lead independent director and approved the rights and responsibilities of the lead independent director. In accordance with the amended Guidelines, due to the roles of CEO and Chair of the Board being held by the same person, Ms. Schaumburg was named Lead Independent Director. The Company expects to return to separate roles of Chair and CEO upon the appointment of a permanent CEO.

Our Interim CEO and Chair of the Board, Dr. Coben, and the Lead Independent Director, Ms. Schaumburg, work closely together in complementary roles. Dr. Coben focuses on the day-to-day operations of the Company and establishes the Company’s strategic plan. Dr. Coben also leads the Board’s responsibilities for reviewing, approving and monitoring fundamental financial and business strategies and major corporate actions, assessing major risks facing the Company and management, and overseeing succession planning, most notably at the CEO level, and he presides over the Board and its Committees as they perform their broad and varied oversight functions. Ms. Schaumburg reviews Board agendas in collaboration with Dr. Coben, and recommends matters for the Board to consider and information to be provided to the Board. Ms. Schaumburg also serves as principal liaison between the Chair and the independent directors.

The Guidelines provide that non-executive directors meet in executive session regularly following Board meetings. The Company’s Lead Independent Director, Ms. Schaumburg, presides over these sessions. Also, pursuant to the Company’s Bylaws, Ms. Schaumburg has been designated as an “alternate member” of all Committees to replace any absent or disqualified members of a Committee.

Directors are encouraged to attend the annual meetings of stockholders. All of the then sitting directors attended the 2023 Annual Meeting of Stockholders. During the 2023 fiscal year, each director attended more than 75% of the total number of Board meetings and meetings of the Committees on which they served (during the periods when they served).

 

13

DIRECTOR INDEPENDENCE

Under the Guidelines and the New York Stock Exchange (NYSE) listing standards, a majority of the Board must be composed of independent directors. The Board determines the independence of our directors by applying the independence principles and standards established by the NYSE. These standards provide that a director is independent only if the Board affirmatively determines that such director does not have a direct or indirect material relationship with the Company, which may include commercial, industrial, consulting, legal, accounting, charitable, familial and other business, professional and personal relationships.

The Board conducts a review of the independence of the Company’s directors (other than Dr. Coben) at least on an annual basis. In its most recent review, the Board considered, among other things:

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Any employment relationships between the Company and its directors or their immediate family members;

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Any affiliations of the Company’s directors or their immediate family members with the Company’s independent registered public accounting firm, compensation consultants, legal counsel and other consultants and advisors;

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Any transactions that would require disclosure as a related person transaction or that qualify for review under our related person transactions policy;

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Any transactions made in the ordinary course of business with a company in which a director serves on the board or as a member of the executive management team;

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Any transactions involving payments made by the Company to educational institutions; and

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Any general factors that may impact the independence of the Company’s directors in the view of the Board.

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In addition, because the Company provides retail electricity services through certain of its subsidiaries, the Board also considered instances where certain of its directors either received electricity or natural gas services from the Company or serve as directors of businesses that received electricity or natural gas services from the Company.

The Board has determined that all of the Company’s directors are independent under the Guidelines and the NYSE listing standards, with the exception of Dr. Coben, our Interim CEO.

Each of the Audit, CEO Search, Compensation, Governance and Nominating, and Finance and Risk Management Committees is made up solely of independent directors. In accordance with the Guidelines and NYSE listing standards, all members of the Audit and Compensation Committees meet additional independence standards applicable to audit and compensation committee members, respectively.

 

14

BOARD AND COMMITTEE EVALUATIONS

The Board conducts an annual performance evaluation of the Board as a whole and each of its Committees. All directors are required to assess whether the Board and the Committees are functioning effectively. The evaluation process provides an opportunity for the members of the Board to reflect upon their service and assess the effectiveness of the Board as a whole and each of the Committees in an effort to determine if improvements are warranted.

In order to enhance Board effectiveness and continually improve our governance practices, in 2023, the Governance and Nominating Committee, which is responsible for the overall structure of the evaluation process, introduced a third-party facilitator as a new component of its Board evaluation program. The Governance and Nominating Committee believes that third-party evaluations will strengthen Board effectiveness as the third party facilitator will bring broad market insight and an objective, candid perspective on a wide range of governance matters, including board dynamics, structure and composition, information practices, meeting schedules and agendas, decision-making and overall effectiveness. The process entails members of the Board considering responses to a broad range of questions regarding the functioning and effectiveness of the Board and its Committees. The third party facilitator then holds individual sessions with each of the directors to elicit feedback concerning the collective performance of the Board and the Committees on which such director sits, and to gather information about areas where the Board and its Committees may improve effectiveness and performance. These discussion topics include, but are not limited to, the Board’s mix of skills, expertise, and experience; the priorities and impact of the Board; the effectiveness of the Committees; the transparency and communication of management with the Board; and specific feedback for other Board directors. Following completion of the interviews, the third party facilitator summarizes the responses for a discussion with the Chair of the Governance and Nominating Committee and the Chair of the Board, which is then presented to the full Board for discussion as a whole. Each Committee Chair also receives an individual review session, which is then discussed with the full Committee at the next regularly scheduled meeting. This feedback helps the Board and Committees identify and consider themes or issues that have emerged, and provide feedback to management. Feedback received regarding individual directors is shared with the Governance and Nominating Committee Chair and the individual directors.

The Board believes the evaluation process described above evokes meaningful responses because it provides directors with the opportunity to share feedback in multiple formats at each of the Board, Committee, and individual levels. The process highlights the Board’s commitment to continuous self-improvement by identifying issues that may require honest and difficult conversations and supports the Board’s nomination and refreshment practices.

 

15

DIRECTOR NOMINEE SELECTION PROCESS

The Governance and Nominating Committee is responsible for identifying individuals whom the Committee believes are qualified to be Board members, in accordance with criteria set forth in the Guidelines, as well as the assessment, on an ongoing basis, of the members of the Board for purposes of continued service to the Board and Company.

The Governance and Nominating Committee provides its recommendations to the Board for approval based on considerations of certain criteria. Such criteria include an individual’s business experience and skills, independence, judgment, integrity, and ability to commit sufficient time and attention to the activities of the Board. Our Guidelines utilize a sliding scale for service on other public company boards, with consideration given to public company leadership roles and outside commitments. A director who also serves as our CEO may not serve on more than one board of a public company in addition to our Board, a director who also serves as Chair of our Board should not serve on more than two boards of public companies in addition to our Board, and other directors should not serve on more than three other boards of public companies in addition to our Board.

Each year, in considering the qualifications of potential Board nominees, the Governance and Nominating Committee reviews the number of boards on which the candidate sits, and each of our directors affirmatively disclose the number of public company boards on which they serve in connection with completing their annual director questionnaire.

In evaluating potential nominees, the Governance and Nominating Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all Board members. The Governance and Nominating Committee considers the Company’s strategy and the particular skills, experiences and other qualifications that should be represented on the Board as a whole in light of the Company’s strategic direction. In addition to the factors listed above, the Governance and Nominating Committee considers an understanding of and experience in the retail and wholesale competitive energy market, customer expertise, finance, operations, executive leadership, age, and gender and ethnic diversity. The Governance and Nominating Committee also assesses whether a nominee’s background, experience, personal characteristics, or skills will advance the Board’s goal of creating and sustaining a Board that can support and oversee management’s execution of the Company’s strategic priorities. The Board takes into account all of these factors when evaluating the Governance and Nominating Committee’s recommendations.

 

16

Listed below are summaries of specific qualifications that the Governance and Nominating Committee and the Board believe should be represented on the Board among other qualifications that a director may bring.

The Governance and Nominating Committee’s process for identifying and evaluating director nominees includes consultation with all directors, solicitation of proposed nominees from all directors, the engagement of one or more professional search firms, if deemed appropriate, interviews with prospective nominees by the Committee (and other directors, if deemed appropriate) and recommendations regarding qualified candidates to the full Board.

As noted above, the Board is continually evaluating the need for Board refreshment and has been focused on identifying individuals whose skills and experiences will enable them to make meaningful contributions to the Company in light of the Company’s evolving strategy and direction. The Board also aims to strike a balance between the knowledge and understanding of the business that comes from longer-term service on the Board with the ideas and perspectives that can come from adding new members.

 

17

BOARD SKILLS AND EXPERIENCE

Our director nominees represent a diverse mix of skills, experiences and viewpoints that are relevant to our Company and facilitate effective oversight. To illustrate the complementary nature of each director nominee’s skills and experience, the table below identifies six primary skills and experiences that the director nominees bring to the Board. In identifying these skills and experiences, each director nominee is limited to selecting six such areas. The table below therefore does not include all of the skills, experiences, and qualifications that each director nominee offers, and even though a particular skill, experience, or qualification is not listed, a director nominee may yet possess that skill, experience, or qualification. We believe identifying six primary skills and experiences is a more meaningful presentation of the complementary contributions and value that each director nominee brings to their service on the Board and to the Company’s stockholders. See “Proposal No. 1 Election of Directors” for the biographies of our director nominees and a description of the skills and viewpoints that each director nominee brings to bear in their service to the Board and Committees.

 

18

BOARD ATTRIBUTES

Our director nominees have a balance of tenure, age, and diversity, which provides our Board with a complementary mix of experience and perspective. In addition, 12 of our 13 director nominees are independent.

BOARD DIVERSITY

The Board is committed to maintaining a diverse and inclusive membership. Of our thirteen director nominees, seven (54%) are diverse, including five female directors and two male directors with ethnically diverse backgrounds. In addition, four out of our five Committee Chairs are women.

Our Guidelines specify that the Governance and Nominating Committee must seek to maintain a diversity of skills, experiences and backgrounds on the Board. In its recruitment process, the Governance and Nominating Committee and the Board seek to reflect gender and ethnic diversity in the pool of director candidates. Diversity also goes beyond race and gender and includes diversity of viewpoints and tenure. The differences in experience and expertise allow the Board to hear various perspectives from its members, leading to better outcomes and a robust decision-making process.

 

19

DIRECTOR ONBOARDING AND CONTINUING EDUCATION

Our Governance and Nominating Committee oversees the Company’s new director orientation program and continuing education program for existing directors. Our new director orientation program has three components. First, new directors receive background information about the Company, which includes a copy of our director handbook containing all relevant company policies, selected earnings materials and transcripts, and the Company’s most recent SEC filings and sustainability report. Second, our new directors attend orientation sessions with each of the business and functional leads in order to familiarize themselves with the Company’s business and operations as well as the senior members of the management team. These orientation sessions include both in office meetings and site visits. Third, new directors engage in one-on-one sessions with Committee chairs and other Board members to review and discuss information about the Company, the business, the boardroom, and individual director roles and responsibilities.

Members of the Board are encouraged to participate in presentations and trainings as part of NRG’s continuing education program to stay informed on current topics of interest. These trainings include in boardroom sessions on topics of interest, such as cybersecurity or data privacy, or directors can select and participate in external education sessions of their choice.

BEYOND THE BOARDROOM

Members of the Board also participate in engagement opportunities outside of Board meetings, which allows them to gain greater insight into the Company’s businesses and industries. Engagement outside of Board meetings also allows directors to gain a deeper understanding of NRG’s strategic goals, as well as the performance of the Company, our Interim CEO and other members of management, and the Board as a whole.

Directors hold individual discussions among themselves and with our Interim President and CEO, along with informal individual and small group meetings with other members of senior management. This practice allows members of the Board to gain insight into NRG’s management development program and to assist with succession planning.

Additionally, the Chair of the Board, the Lead Independent Director, and Committee Chairs regularly hold discussions among themselves and with members of management to plan future meetings.

BOARD COMMITTEES

The Board has the following four standing Committees: Audit, Compensation, Governance and Nominating, and Finance and Risk Management. In addition to our standing committees, the Board established a CEO Search Committee, a special, non-standing committee, in November 2023.

The membership and the functions of each Committee are described below. Each of the standing Committees has adopted a charter that describes each such Committee’s roles and responsibilities. The charters of all of the standing Committees are available on the Governance section of the Company’s investor relations website at https://investors.nrg.com.

 

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The Audit Committee represents and assists the Board with respect to matters involving the accounting, auditing, financial reporting, internal controls, and legal compliance functions of the Company and its subsidiaries, including assisting the Board in its oversight of the integrity of the Company’s financial statements, the qualifications, independence, and performance of the Company’s independent auditors, the performance of the Company’s internal audit function, the Company’s compliance with legal and regulatory requirements, and effectiveness of the Company’s legal and regulatory compliance functions. Among other things, the Audit Committee:

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appoints, retains, oversees, evaluates, and compensates the independent auditors;

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reviews the annual audited and quarterly consolidated financial statements;

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reviews major issues regarding accounting principles and financial statement presentations;

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reviews earnings press releases and earnings guidance provided to analysts and rating agencies;

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reviews with the independent auditors the scope of the annual audit, and approves all audit and permitted non-audit services provided by the independent auditors;

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considers the adequacy and effectiveness of the Company’s internal control and reporting system;

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with the advice and assistance of the Finance and Risk Management Committee, reviews in a general manner the processes by which the Company assesses and manages risk; provided, however, the Audit Committee is not required to duplicate the work of the Finance and Risk Management Committee;

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reviews periodically the Company’s tax policies and any pending audits or assessments;

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reports regularly to the Board regarding its activities and prepares and publishes required annual Audit Committee reports;

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establishes procedures for the receipt, retention, and treatment of complaints and concerns regarding accounting, internal accounting controls, or auditing matters;

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oversees the internal audit and corporate compliance functions; and

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annually evaluates the performance of the Audit Committee and the adequacy of its charter.

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Until December 2023, the Audit Committee was comprised of Anne C. Schaumburg (Chair), Antonio Carrillo, Paul W. Hobby and Alexandra Pruner. Marcie C. Zlotnik was appointed to the Audit Committee in December 2023.

 

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The Compensation Committee oversees the Company’s overall compensation structure, policies, and programs. Among other things, the Compensation Committee:

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reviews and recommends to the Board annual and long-term goals and objectives relevant to the compensation of the President and CEO, evaluates the performance of the President and CEO in light of those goals and objectives, and determines, approves, and recommends to the Board for approval the compensation level of the President and CEO based on such evaluation;

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reports to the Board its review of annual and long-term goals and objectives relevant to the compensation of the Chief Financial Officer (CFO), the Executive Vice Presidents and any other officer designated by the Board, the evaluation of those officers’ performance in light of those goals and objectives, the determination and approval of compensation levels based on such evaluations and the review and approval of employment arrangements, severance arrangements and benefits plans;

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reviews and recommends to the Board the compensation, incentive compensation and equity-based plans that are subject to Board approval;

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reviews and approves stock incentive awards for executive officers other than the President and CEO;

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makes recommendations regarding, and monitors compliance by officers and directors with, the Company’s stock ownership guidelines;

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reviews and recommends to the Board the compensation of directors for service on the Board and its Committees;

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oversees the evaluation of management and annually reviews the Company’s senior management succession plans;

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reviews and approves employment agreements and severance arrangements, benefit plans not otherwise subject to Board approval, and corporate goals and objectives for officers other than the President and CEO;

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reviews and discusses with management the Compensation Discussion and Analysis (CD&A) to be included in the Company’s proxy statement or annual report on Form 10-K, and based on such review and discussions, recommends to the Board that the CD&A be included in the Company’s proxy statement or annual report on Form 10-K, as applicable;

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evaluates any conflicts of interest and the independence of any outside advisors engaged by the Compensation Committee;

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reviews and oversees the Company’s overall compensation strategy, structure, policies, programs, risk profile and any stockholder advisory votes on the Company’s compensation practices and assesses whether the compensation structure establishes appropriate incentives for management and employees;

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annually evaluates the performance of the Compensation Committee and the adequacy of its charter; and

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performs such other responsibilities as may be delegated to it by the Board from time to time that are consistent with its purpose.

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The Compensation Committee may delegate to one or more subcommittees such power and authority as the Compensation Committee deems appropriate. No subcommittee shall consist of fewer than two members, and the Compensation Committee may not delegate to a subcommittee any power or authority that is required by any law, regulation or listing standard to be exercised by the Compensation Committee as a whole.

The Compensation Committee has the authority to retain at the expense of the Company such outside counsel, experts, and other advisors as it determines appropriate to assist it in the full performance of its functions, including sole authority to retain and terminate any compensation consultant used to assist the Compensation Committee in the evaluation of directors, or, if applicable, CEO or senior executive compensation, and to approve the consultant’s fees and other retention terms.

Pay Governance, the Compensation Committee’s independent compensation consultant for fiscal year 2023, assisted with executive pay decisions and worked with the Compensation Committee to formulate the design of the executive compensation program for 2023.

Until December 2023, the Compensation Committee was comprised of E. Spencer Abraham (Chair), Antonio Carrillo, Matthew Carter, Jr., Heather Cox, and Paul W. Hobby. Alex Pourbaix was appointed to the Compensation Committee in December 2023.

The Governance and Nominating Committee recommends director candidates to the Board for election at the annual meetings of stockholders, periodically reviews the Guidelines and recommends changes to the Board, and provides guidance to the Board with respect to governance related matters. Among other things, the Governance and Nominating Committee:

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identifies and reviews the qualifications of potential nominees to the Board consistent with criteria approved by the Board, and assesses the contributions and independence of incumbent directors in determining whether to recommend them for re-election;

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establishes and reviews procedures for the consideration of Board candidates recommended by the Company’s stockholders;

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makes recommendations to the Board concerning the structure, composition, and functioning of the Board and its Committees;

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reviews and assesses the channels through which the Board receives information, and the quality and timeliness of information received;

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reviews and recommends to the Board retirement and other tenure policies for directors;

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reviews and approves Company policies applicable to the Board, the directors and officers subject to Section 16 of the Securities Exchange Act of 1934, as amended (Exchange Act);

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reviews and reports to the Board regarding potential conflicts of interests of directors;

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recommends to the Board director candidates for the annual meeting of stockholders, and candidates to be elected by the Board as necessary to fill vacancies and newly created directorships;

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oversees the Company’s strategies and efforts to manage its environmental, economic and social impacts, including, but not limited to, the Company’s environmental, climate change and sustainability policies and programs;

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oversees, in conjunction with a third party, the evaluation of the Board, each of its Committees and management;

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annually monitors directorships in other public companies held by directors and senior officers of the Company;

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annually evaluates the performance of the Governance and Nominating Committee and the appropriateness of its charter;

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reviews the Company’s political contribution policy and the Company’s memberships in trade associations or other business associations that engage in lobbying activities or make independent expenditures relating to political campaigns or initiatives;

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reviews the Company’s charitable giving policy;

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oversees the orientation process for new directors and programs for the continuing education of existing directors; and

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performs such other responsibilities as may be delegated to it by the Board from time to time that are consistent with its purpose.

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Until December 2023, the Governance and Nominating Committee was comprised of Heather Cox (Chair), Matthew Carter, Jr., and Elisabeth B. Donohue. Marwan Fawaz and Marcie C. Zlotnik were appointed to the Compensation Committee in December 2023.

The Finance and Risk Management Committee assists the Board in fulfilling its responsibilities with respect to the oversight of trading, power marketing and risk management issues at the Company, and reviews and approves certain financial transactions. Among other things, the Finance and Risk Management Committee:

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reviews, reports and makes recommendations to the Board on management recommendations or proposals regarding the Company’s and its subsidiaries’: (i) capital structure, (ii) liquidity, (iii) need for credit or debt or equity financing, (iv) amounts, timing and sources of capital market transactions, and (v) financial hedging and derivative activities;

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reviews and approves, or authorizes officers to approve, the pricing and other terms and conditions of transactions relating to debt or equity financings, financial hedging and derivatives activities, and other similar financial activities, in each case which have been reviewed and approved by the Board;

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reviews and approves, or authorizes officers to approve, repurchases, early redemption or other similar actions with respect to the Company’s securities;

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reviews and approves, or authorizes officers to approve, the pricing and other terms and conditions of financing transactions related to mergers, acquisitions, tender offers, and reorganizations which have been reviewed and approved by the Board;

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reviews and approves, or authorizes officers to approve, the pricing and other terms and conditions of securities offerings which have been reviewed and approved by the Board;

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approves determinations of the fair market value of assets and investments of the Company for purposes of the Company’s note indentures, senior secured credit agreement or other similar financing documents where fair market value is required to be determined by the Board or by a Committee of the Board;

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reviews with management, on a periodic basis, contributions to employee benefit retirement plans of the Company, investment performance, funding, asset allocation policies and other similar performance measures of the employee benefit retirement plans of the Company;

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oversees the Company’s policies and procedures established by management to assess, monitor, manage and control the Company’s material risk exposures, including operational, business, financial and commodity market (including marketing and trading of fuel, transportation, energy and related products and services, and hedging of generation portfolio obligations), strategic, credit, liquidity and reputational risks;

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oversees matters related to the security of and risks related to information technology systems and procedures, including the Company’s data privacy and security practices, cyber-security program and cyber- related risks;

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advises and assists the Audit Committee in its review of the processes by which management and the Committee assess the Company’s exposure to risk;

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approves, as appropriate, the Company’s power marketing and trading transactions, limits, policies, practices and procedures, and counter-party credit limit and policies, and approves exceptions to policies, as necessary;

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annually evaluates the performance of the Finance and Risk Management Committee and the appropriateness of its charter;

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reviews and approves transactions exceeding the President and CEO’s individual authority limits under the Company’s risk management policies; and

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performs such other responsibilities as may be delegated to it by the Board from time to time that are consistent with its purpose.

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Until December 2023, the Finance and Risk Management Committee was comprised of Alexandra Pruner (Chair), Elisabeth B. Donohue, and Anne C. Schaumburg. Marwan Fawaz was appointed to the Finance and Risk Management Committee in December 2023. Kevin T. Howell was appointed to the Finance and Risk Management Committee in March 2024.

 

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In November 2023, the Board formed a CEO Search Committee, a special non-standing committee to oversee the Board’s search for a new CEO and President. The CEO Search Committee engaged a search firm and is in the process of identifying and evaluating candidates to become the Company’s next CEO and President. The Committee will be dissolved upon the appointment of a new CEO and President.

 

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SUSTAINABILITY AT NRG

Sustainability is a philosophy that underpins and facilitates value creation across our business for all stakeholders. It is an integral piece of our corporate strategy and ties directly to business success, reduced risk, and enhanced reputation. We are committed to positively affecting the communities in which our customers and employees live and work and reducing our environmental footprint while ensuring the long-term reliability, competitiveness, and success of NRG.

As we help to drive the energy transition through increasingly more sustainable products and solutions, our goal is to provide more clean energy choices to our customers and help reduce overall environmental and social impacts associated with the use of our products.

This includes providing sustainable energy solutions to customers, optimizing our generation on an ongoing basis, reducing the carbon footprint of our operations, leveraging cleaner energy technologies such as battery storage and the incorporation of renewables, and supporting the advancement of our employees through health, safety, personal and professional growth, and diversity, equity, and inclusion (DEI) initiatives.

We have a long history of sustainability initiatives and disclosures, beginning in 2009 when we submitted our first report to the Climate Disclosure Project (now known as CDP). Since then, we have promoted transparency and reported on our efforts, as illustrated in the timeline below.

 

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SUSTAINABILITY GOVERNANCE

Board of Directors

At NRG, we have adopted an integrated governance approach to the oversight of sustainability issues, including climate change. Our full Board has ultimate responsibility for climate risk oversight as a component of the Company’s business strategy. The Committees are then structured to conduct more in-depth reviews of specific sustainability issues, with the Governance & Nominating Committee formally responsible for the Company’s sustainability policies and programs.

The rationale for formalizing the governance structure for climate and other sustainability-related issues is to ensure that the Board and its committees are ensuring that all material risks to the company are mitigated and for guiding NRG’s pursuit of significant business opportunities. Sustainability is formally included as an agenda item at a full Board meeting and is discussed separately by the Governance and Nominating Committee at least once per year. In addition, sustainability-related matters are also discussed at other Board and Committee meetings as the context requires. For example, the Compensation Committee regularly discusses ESG compensation metrics in the context of annual compensation plan design and achievement of compensation plan metrics.

 

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Executive Management

Responsibility for our overall sustainability approach begins with our CEO, who is tasked with reviewing all sustainability-related strategies, goals, and metrics, which are then finalized and approved by the Board before implementation. Sustainability strategy development, implementation, and reporting are led by our chief sustainability officer (CSO) and a dedicated corporate sustainability team. In particular, our corporate sustainability team is responsible for developing our climate-related policy positions, coordinating between policy and commercial initiatives, engaging with stakeholders, and advising on decarbonization pathways for the Company as well as business and residential low-carbon energy solutions.

 

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CUSTOMERS

Our expertise brings customers closer to achieving their energy and sustainability goals through a range of retail renewable electricity plans, tailored demand response programs, active energy management tools, and energy efficiency consulting and products. Our long-term strategy includes additional personalized products and services allowing for more connected devices within a residence.

Our residential retail brands, including NRG, Reliant, Direct Energy, and Green Mountain Energy, offer zero-emission or low-emission retail electricity rate plans and carbon offsets, as well as adjacent services through partner companies for rooftop solar installation and the purchase and charging of electric vehicles. When paired with smart home technologies from our Vivint brand, these products and services bring customers a unique, end-to-end smart home experience, which helps keep homes safe, secure, and always on.

For our commercial and industrial customers, we act as an intermediary between renewable power developers and electricity customers. Our Renewable Select retail product delivers renewable energy through a unique, simple contract and no on-site infrastructure. In addition, to support large customers’ energy management and enable grid stability in times of high demand, we provide energy load reduction through business demand response programs. Our team also delivers reliable, competitively priced natural gas supply and related solutions to companies, state and local governments, and households, helping them achieve their climate goals. We also work to help reduce the carbon impact of gas consumption with products like high-quality carbon offsets. We expect that natural gas will become less carbon intense over time through advancements in emerging lower carbon and/or methane forms of gas such as renewable natural gas (RNG), producer-certified gas (PCG or simply certified gas), and hydrogen.

NRG’s strategy is not to become a developer, owner, or operator of large-scale renewable energy generation as a pathway to decarbonization but rather to be the preferred conduit to help our customers become more sustainable. We leverage our market expertise to partner with renewable energy developers to bring new, additional renewable electricity to the grid through short and medium-term Power Purchase Agreements (PPAs). This approach to procuring renewables allows us to stay agile and meet customer needs for sustainable energy solutions while supporting our business strategy. NRG expects to continue evaluating and executing similar agreements that support the needs of the business.

WORKFORCE

Employees power the work of NRG. We provide comprehensive compensation and benefits to our colleagues, including employees represented by labor unions, as well as tools and resources to help them thrive in their personal lives and grow in their careers. We negotiate with labor unions in good faith and are proud of the cooperative relationships we have built together over the years.

 

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Safety

Diversity, Equity, and Inclusion

We recognize that we must live our values to serve our customers and our communities. One of our core Power Values (as defined on page 61) includes seeking to create work environments where our colleagues are treated fairly and respectfully and where each voice matters. We are building on that position by reshaping our hiring and promotions practices, continually improving our policies to be more inclusive and increasing the number of our Business Resource Groups (BRGs). In these BRGs, employees can share, learn, and receive support from colleagues with whom they have an affinity based on shared backgrounds or interests. We strive to be a place of equitable access for employee growth that celebrates the individual while championing our diversity together. Our BRGs include the following:

 

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In furtherance of our DEI initiatives, during 2023, we:

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created designated reflection rooms in our headquarters to accommodate religious practices and reflection;

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hosted our inaugural listening session in recognition of National Day for Truth and Reconciliation sponsored by RISE, our Indigenous communities BRG; and

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held our first Lunar New Year’s celebrations hosted by VIVIDH, our Asian American and Pacific Islander BRG.

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Additionally, we are proud to be recognized by Forbes and Statista as one of the Best Employers for diversity.

Talent Development

We deploy various talent development strategies and programs with the goal of developing leaders who can execute on our strategy and drive value for all stakeholders. The Board regularly engages with management on leadership development and succession planning, including providing feedback on development plans and bench strength for key senior leader positions. In 2023, we continued our Emerging Leaders Program to strengthen the identified pipeline of future leaders and create a cohort of high-potential candidates to work on active company challenges. Additionally, the Company launched a front-line leader program called Peak Leadership with the intent to onboard first-level leaders into their leadership role in select business units and will look to expand its impact in 2024. We also have a performance management tool that emphasizes a continuous feedback loop to all our employees and a robust online training curriculum that covers topics such as leadership, communication, and productivity.

Employee Engagement

We actively provide employees with virtual, hybrid, and in-person health and wellness activities. Throughout the year, we hosted meditation, yoga, and high-intensity interval training classes, as well as our annual walking challenge and the corporate team participated in events such as the Texas MS150, to support health and well-being. Our Employee Appreciation Day in 2023 saw over 50% employee participation rate in a virtual Spin the Wheel activation and widespread in-person celebrations at company-planned events. To recognize employees’ positive contributions to our corporate culture and the communities where we live and work, we launched a new set of enterprise-wide awards. The NRG Impact Awards highlight employees who embody our purpose and live out our values in three award categories: Volunteer of the Year, Community Champion, and Purpose on Point. We continued our annual survey of employees on well-being, with a focus on understanding how employees perceive their physical, emotional, and financial well-being, and intend to address matters as they arise. Business leaders partner with the Talent team to identify initiatives that serve the needs and priorities coming from these surveys. Examples of these initiatives include efforts to clarify career development paths, increase recognition or communication programs, and host employee focus groups.

Total Rewards

We seek to provide market-competitive compensation and benefits benchmarked against the industries in which we operate: energy, consumer services, and, where appropriate, the entire market. To ensure incentives are properly aligned with business needs and can attract and retain qualified employees, the Compensation Committee of the Board actively reviews our total rewards programs, including benchmarking, risk assessment, and program design. We offer full-time employees incentives designed to motivate and reward success. We continue to evaluate our offerings, taking into consideration the needs of our employees to ensure they are competitive and best serve our employees.

For several years, we have invested in the well-being of our employees and their families, providing programs that holistically support their physical, emotional, and financial wellness. Through these programs, NRG empowers employees to take control of their well-being and focus on what matters most to them for a healthy, secure future.

 

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In 2023, we continued to include well-being goals in the AIP tying a portion of incentive compensation directly to improvements in employee physical, emotional, and financial well-being. For the first time, we provided regional “pop-up” clinics to our larger locations, making preventative care more convenient than ever.

We continued our support of employees by partnering with the National Council for Behavioral Health to initiate our Mental Health First Aid program. This program safely, respectfully, and effectively opens the conversation about mental illness and addiction, encourages employees to recognize and take responsibility for their mental health, teaches managers to recognize and speak to employees about mental health concerns, and complements and supports existing benefit and wellness programs and company policies and procedures.

COMMUNITY AND PHILANTHROPY

We are committed to positively impacting people, communities, and the environment. Our social responsibility efforts reflect what it means to lead by example in our industry and our desire to make the world brighter. Through NRG’s philanthropic program, positiveNRG, we create a workplace that empowers employees by supporting communities, causes, and organizations they elect to champion. The platform offers multiple touchpoints that allow for engagement with non-profit organizations via volunteering and donations and internal employee team building.

We encourage employees at every level of our organization to participate in positiveNRG Impact Week, our annual week of giving. In 2023, positiveNRG Impact Week continued to focus on strengthening food security, and volunteer opportunities ranged from unloading food deliverables and sorting donated goods at local food pantries to packaging meals and maintenance work with local community gardens. Collectively, over 710,000 meals were donated, packed, or prepared. Additionally, volunteers had the opportunity to participate in various food preparation and gardening activities. Vivint Gives Back foundation held its annual holiday celebration, “Sub for Santa” during which we donated 26,843 presents to children in the local communities of Provo and Lehi, Utah, and 52 homes were built as part of our annual Impact Trip that was held in Mexico City in 2023.

 

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ENVIRONMENT

Goals and Progress

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1

From a 2014 base year

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We integrate environmental considerations into strategic and operational decisions. We have demonstrated our commitment by reducing our environmental impact in several areas. Our annual SOx and NOx air emissions have declined significantly since 2014. In addition, we established industry-leading 2 degree Celsius-aligned greenhouse gas (GHG) emission reduction goals in 2015 and became the first power company to earn validation of these goals from the Science Based Targets initiative (SBTi). At that time, our goals were to reduce GHG emissions by 50% by 2030 and 90% by 2050.

In 2019, NRG announced the acceleration of its goals to align with prevailing climate science, which urged limiting global warming in the postindustrial era to 1.5 degree Celsius. These updated goals target a 50% reduction by 2025 from our current 2014 base year, and net-zero emissions by 2050, and encompass scope 1, scope 2, and the employee business travel portion of scope 3. Since then, SBTi’s methodologies and submission requirements have changed, as has the composition of NRG’s business. Following the acquisitions of Direct Energy and Vivint, the magnitude of NRG’s scope 3 emissions changed, and the Company is currently in the process of analyzing its scope 3 emissions.

The chart to the right presents carbon dioxide equivalent (CO2e) emissions and generation output from our domestic generation portfolio, including leased facilities and those accounted for through equity method investments. Prior year information was adjusted to remove divested assets. Since our base year of 2014, CO2e emissions have fallen by 34 million metric tons of CO2e or 58%, equivalent to avoiding GHG emissions for more than 87 billion miles driven by an average gasoline-powered passenger vehicle. The decrease is attributed to fleet-wide annual net generation reductions and an overall market-driven shift from coal as a primary fuel to natural gas. The achievement of NRG’s 2025 emissions reduction targets could be impacted by volatility within the power markets, driven by market conditions and changes in regulatory policies. The generation in the chart includes generation from all fuels represented in our portfolio — coal, natural gas, oil, and renewables — which is discussed further in our Annual Report on Form 10-K.

 

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In furtherance of our sustainability commitment, in 2021, we added a sustainability goal to electrify 100% of company-owned, light-duty fleet vehicles by 2030. NRG also joined the Climate Group’s EV100 initiative to share best practices with other organizations electrifying their fleets and to support our customers in their transition to electric vehicles.

Environmental Management and Operations

Since environmental responsibility is instilled at every level of NRG, we have an Environment-Over-Production policy, which empowers our colleagues to take necessary actions to comply with environmental requirements even if such actions result in reduced production at our facilities.

Supply Chain

Our supply chain initiatives include evaluating risks and opportunities in our purchased goods and services, enhancing the ways we select suppliers, including a focus on DEI, developing strong manufacturing standards and internal policies, and promoting environmental disclosure practices for those with whom we do business. The importance we place on supply chain transparency has also led us to pursue external collaboration with other companies in our sector through organizations such as the Natural Gas Supply Collaborative, a voluntary collaborative of natural gas purchasers, which promotes safe and responsible practices for natural gas supply.

NRG has a robust Supplier Code of Conduct as well as a Human Rights and Social Responsibility in Manufacturing Standards Policy. We require all contract manufacturers (including subcontractors) to adhere to this policy. Third-party audits are conducted regularly, and we report the results of such third-party manufacturing audits to the Audit Committee.

 

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STOCKHOLDER AND STAKEHOLDER ENGAGEMENT

We have a broad outreach program to discuss NRG’s long-term strategy and sustainability goals, as well as to review and seek feedback on our governance, sustainability, and compensation practices. During 2023, one or more members of management spoke with stockholders representing more than two-thirds (2/3) of our shares outstanding.

We regularly engage with stockholders concerning our Board, governance, and executive compensation practices with the specific goal of seeking stockholder feedback. Our stockholder engagement is important to our Board’s decision-making process and has driven changes to our governance and compensation practices. We greatly value the views of our stockholders and look forward to continuing the dialogue.

In addition, we regularly engage with all stakeholders on sustainability issues. We strive to provide current, credible, and comparable data to sustainability ratings agencies while engaging investors and investor advocacy organizations on these issues. We believe that engagement with all stockholders, including non-government organizations, community and industry groups, and academia, among others, helps us identify and pursue potential opportunities to decarbonize our business and better serve our customers.

COMMUNICATION WITH DIRECTORS

Stockholders and other interested parties may communicate with the Board by writing to the Corporate Secretary, NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540. Communications intended for a specific director or directors should be addressed to their attention to the Corporate Secretary at the address provided above. Communications received are forwarded directly to Board members as part of the materials mailed in advance of the next scheduled Board meeting following receipt of the communications. The Board has authorized the Corporate Secretary, in her discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening, or similarly inappropriate. Advertisements, solicitations for periodical or other subscriptions, and other similar communications generally will not be forwarded to the directors.

 

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Proposals to be Voted

PROPOSAL NO. 1

ELECTION OF DIRECTORS

In November 2023, the Company entered into a Cooperation Agreement with Elliott pursuant to which the Company agreed to (i) increase the size of the Board to thirteen (13) directors, (ii) appoint Mr. Fawaz, Mr. Howell, Mr. Pourbaix and Ms. Zlotnik (together, the New Directors) as independent directors with initial terms expiring at the Annual Meeting, and (iii) nominate the New Directors for election at the Annual Meeting. A summary of the Cooperation Agreement is included in the Company’s Current Report on Form 8-K filed with the SEC on November 20, 2023.

The Board is comprised of 13 members, all of whom will stand for election at the Annual Meeting. Although Ms. Schaumburg will stand for reelection, she has informed the Board of her desire to retire prior to the 2025 Annual Meeting of Stockholders. Given her role as Lead Independent Director, the Board has requested, and Ms. Schaumburg has agreed, to continue to serve on the Board and as Lead Independent Director until the Company reduces the size of the Board pursuant to the Cooperation Agreement, which will be no later than December 31, 2024. Mr. Hobby has also informed the Board that he will resign when the Company reduces the size of the Board pursuant to the Cooperation Agreement. Our Bylaws provide that the number of directors will be determined by the Board of Directors, and the number of directors is currently set at thirteen. Following the resignations of Ms. Schaumburg and Mr. Hobby, the Board of Directors is expected to reduce the size of the Board in accordance with the Cooperation Agreement.

Each director will hold office until his or her successor has been elected and qualified or until the director’s earlier death, resignation, or removal. Each of the nominees for director named in this Proxy Statement have been recommended and nominated by the Governance and Nominating Committee.

The persons named as proxies on the proxy card intend to vote the proxies for the election of the nominees to the Board listed below. Each nominee listed below has consented to being named in this Proxy Statement and to serve as a director if elected. The biography for each director includes the specific experience, qualifications, attributes, and skills that led the Board to conclude that the nominee should serve as a director. The Board believes that each of the director nominees has valuable individual skills and experiences that, taken together, provide the Company with the variety and depth of knowledge, judgment, and vision necessary to provide effective oversight of the Company.

 

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DIRECTOR COMPENSATION

ELEMENTS OF DIRECTOR COMPENSATION

The total annual compensation received by our directors for their service as Board members and Chairs of the Committees of the Board, if applicable, is described in the chart below.

A non-employee director who is newly appointed to the Board, other than in connection with an annual meeting of stockholders, receives the Annual Equity Retainer and a pro rata portion of the Annual Cash Retainer upon appointment. With respect to Board Chair and Committee Chair Retainers, 50% is received in the form of cash and 50% is received in the form of Deferred Stock Units (DSUs). Directors may, however, elect to receive the cash portion of their annual compensation as DSUs. Each DSU is equivalent in value to one share of NRG’s common stock and represents the right to receive one such share of common stock payable at the time elected by the director or immediately if no such election is made, or in the event the director does not make an election with respect to payment in a particular year, in accordance with their prior deferral election. In the event that a director’s service with the Company is terminated for any reason other than cause, DSU awards are payable in accordance with such director’s deferral election. If a director’s service with the Company is terminated for cause, the award is forfeited. In connection with the grants of the DSUs, each non-employee director also receives dividend equivalent rights (DERs) which become exercisable proportionately with the DSUs to which they relate.

DETERMINATION OF BOARD CHAIR COMPENSATION

As discussed in greater detail below, the Compensation Committee and Board (with the Chair of the Board recusing himself from discussions and decisions on Chair compensation) rely on market data as well as other factors in determining independent Chair compensation.

In 2023, in order to provide a comprehensive view of the market, Pay Governance compiled competitive market data for our chair of the Board based on a sample of companies from the energy/utility industry, general industry and consumer retail/products industry with independent, non-executive chairs as well as two remaining publicly traded independent power companies of comparable scope to NRG at the time (AES Corporation and Vistra Corp.). Relative to the market data, total director compensation (sum of all cash and equity retainers) for our Chair of the Board was above the 50th percentile (median) of the energy/utility industry group and general industry group as well as above total director compensation of Vistra Corp. and AES Corporation and aligned with the median of the consumer/retail products industry group, at the time of the analysis.

In addition to the market data, the Compensation Committee and Board considered the following factors in determining the compensation for the Board’s independent Chair: the Chair’s role in a variety of significant strategic

 

45

initiatives; the time commitment spent by the Chair on Company-related matters; participation in all Board and Committee meetings; participation in the Chief Executive Officer evaluation process and succession planning; and engagement and frequency of discussions with management regarding the Company’s strategic direction.

DIRECTOR COMPENSATION FOR THE FISCAL YEAR ENDED DECEMBER 31, 2023

The following table sets forth information regarding the compensation awarded to, earned by or paid to our non-employee directors who served on our board of directors during the fiscal year ended December 31, 2023. Pursuant to Instruction 3 to Item 402(c) of Regulation S-K, Dr. Coben’s compensation for his service as a non-employee director prior to his appointment as Interim President and Chief Executive Officer in November 2023 is discussed in the Summary Compensation Table and in the other tables under “Executive Compensation — Other Items” presented below. During his tenure as Interim CEO, Dr. Coben will not receive separate compensation as a director or Chair of the Board.

 

46

The following table sets forth the aggregate number of stock awards (DSUs and DERs) held by each of the non-employee directors as of December 31, 2023. The non-employee directors did not own any option awards as of December 31, 2023.

DIRECTOR STOCK OWNERSHIP GUIDELINES

Directors are required to retain all stock received as compensation for the duration of their service on the Board, although they may sell shares as necessary to cover tax liability associated with the conversion of DSUs to common stock. Exceptions to these requirements may be made by the Board under special circumstances. No exceptions to such requirements were made for 2023.

 

47

PROPOSAL NO. 2

ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

Under Section 14A of the Exchange Act, the stockholders of the Company are entitled to vote at this year’s Annual Meeting to approve the compensation of the Company’s named executive officers, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K of the rules and regulations under the Securities Act of 1933, as amended (Securities Act). Currently, this vote is conducted every year. The next vote will occur at the 2025 Annual Meeting of Stockholders.

As described more fully in the CD&A beginning on page 57, the Company’s executive compensation program is designed to attract, retain and reward top executive talent. The intent of the Company’s compensation program is to reward the achievement of the Company’s annual goals and objectives while supporting the Company’s long- term business strategy.

This proposal, commonly known as a “say on pay” proposal, gives stockholders the opportunity to express their views on the Company’s named executive officers’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers as described in this Proxy Statement. Accordingly, the Board recommends that stockholders vote in favor of the following resolution:

“RESOLVED, that the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the Compensation Discussion and Analysis, compensation tables and narrative discussion, is hereby APPROVED.”

The say on pay vote is advisory and therefore not binding on the Company, the Board or the Compensation Committee. However, the Board and the Compensation Committee value the opinions of the stockholders and to the extent there is a significant number of votes against the named executive officer compensation as disclosed in this Proxy Statement, stockholders’ concerns will be considered, and the Board and the Compensation Committee will evaluate actions necessary to address those concerns.

 

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PROPOSAL NO. 3

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2024 FISCAL YEAR

The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s consolidated financial statements. To execute this responsibility, the Audit Committee engages in a thorough annual evaluation of (i) the independent registered public accounting firm’s qualifications, performance and independence, (ii) whether the independent registered public accounting firm should be rotated, and (iii) the advisability and potential impact of selecting a different independent registered public accounting firm.

The Audit Committee appointed the firm of KPMG LLP, an independent registered public accounting firm, to audit the consolidated financial statements of the Company and its subsidiaries for the 2024 fiscal year at a meeting held in February. KPMG LLP has been retained as the Company’s independent registered public accounting firm continuously since May 2004. In accordance with SEC rules and KPMG LLP policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit services to the Company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The Audit Committee is involved in the selection of KPMG LLP’s lead audit partner.

The Audit Committee and the Board believe that the continued retention of KPMG LLP to serve as the Company’s independent registered public accounting firm for the 2024 fiscal year is in the best interests of the Company and its stockholders. If the stockholders do not ratify the appointment of KPMG LLP, the Audit Committee will reconsider its selection. Representatives of KPMG LLP are expected to attend the Annual Meeting where they will be available to respond to questions and, if they desire, to make a statement.

 

49

Executive Officers

Our executive officers are elected by the Board annually to hold office until their successors are elected and qualified. The biographical information for each of the executive officers is provided below.

Lawrence S. Coben

Age 65
Interim President and Chief Executive Officer

For biographical information for Dr. Coben, see “Nominations for Director.”

Woo-Sung (Bruce) Chung

Age 50
Executive Vice President and Chief Financial Officer

Mr. Chung has served as our Executive Vice President and Chief Financial Officer since June 2023. Prior to his service as Executive Vice President and Chief Financial Officer, Mr. Chung Served as Executive Vice President, Strategy, M&A, and NRG Services from July 2022 to June 2023, and served as Senior Vice President of Strategy, M&A, and NRG Services from August 2016 to July 2022. Mr. Chung served as a Managing Director at Energy Impact Partners, a private equity firm focused on energy technology investments, in 2016. Prior to his employment with Energy Impact Partners, Mr. Chung served in a number of different capacities focused on large-scale project and new business development at NRG from May 2008 to January 2016. Prior to his initial employment with us, Mr. Chung served as a director in the investment banking division of Citigroup and its predecessor firms providing capital markets advisory and M&A services to a number of regulated and unregulated power companies. During his banking career, Mr. Chung worked on a number of large capital markets and M&A transactions, including multiple assignments for the Company.

Brian Curci

Age 46
Executive Vice President and General Counsel

Mr. Curci has served as our Executive Vice President and General Counsel since March 2021. He served as our Senior Vice President and General Counsel from March 2018 to March 2021 and Senior Vice President and Deputy General Counsel from April 2017 to March 2018. Since joining us in 2007, Mr. Curci has served in various other legal roles, including as Corporate Secretary from October 2011 to July 2018. Prior to joining us, Mr. Curci was a corporate associate with the law firm Saul Ewing LLP in Philadelphia.

Robert J. Gaudette

Age 50
Executive Vice President, NRG Business

Mr. Gaudette has served as our Executive Vice President, NRG Business since April 2022. Prior to that, Mr. Gaudette served as Senior Vice President, Business Solutions since December 2013. Prior to December 2013, Mr. Gaudette was Senior Vice President, C&I and Origination, starting in August 2013, and Senior Vice President, Product Development & Origination following the acquisition of GenOn in December 2012. Mr. Gaudette served as Senior Vice President and Chief Commercial Officer at GenOn from December 2010 to December 2012 and served as Vice President of Mirant’s Mid-Atlantic business unit from August 2009 to December 2010. During his career at Mirant, which began in 2001, Mr. Gaudette worked in various other capacities including Director of West Power,

 

50

Director of NYMEX Trading, Assistant to the Chief Operating Officer and NYMEX natural gas trader. Mr. Gaudette serves on the advisory board of Shift, an early stage company that provides a platform advising veterans on job prospects and linking them to opportunities.

Elizabeth Killinger

Age 54
Executive Vice President, NRG Home

Ms. Killinger has served as Executive Vice President, NRG Home since February 2016. Prior to that, she had served as Senior Vice President in various Retail Operations roles with us since December 2010. Ms. Killinger has been with us and our predecessors since 2002 and has held various operational and business leadership positions within the retail organization. Prior to joining us, Ms. Killinger spent a decade providing strategy, management and systems consulting to energy, oilfield services and retail distribution companies across the U.S. and in Europe. Ms. Killinger has served on the board of Helmerich & Payne (NYSE: HP) since July 2023.

Rasesh Patel

Age 50
Executive Vice President, Smart Home

Mr. Patel has served as Executive Vice President, Smart Home since March 2023. Prior to NRG’s acquisition of Vivint, he had served as Chief Operating Officer of Vivint from May 2022 to March 2023. Prior to joining Vivint, Mr. Patel held various executive leadership roles at AT&T, including Chief Product and Platform Officer from March 2021 to May 2022, Executive Vice President and General Manager, Broadband and Video from September 2019 to March 2021, Senior Executive Vice President — Digital, Retail and Care from August 2017 to September 2019, Regional President, Central Region Mobility Sales & Service from November 2016 to July 2017, and Senior Vice President, Product Management from July 2015 to October 2016. Prior to its acquisition by AT&T, Mr. Patel served as Senior Vice President of Customer Experience for DIRECTV.

G. Alfred (Al) Spencer

Age 42
Senior Vice President and Chief Accounting Officer

Mr. Spencer has served as our Senior Vice President and Chief Accounting Officer since December 2023. In this position, Mr. Spencer serves as our principal accounting officer. Before joining us, he was Vice President, Controller and Principal Accounting Officer of JetBlue Airways Corporation (JetBlue) from May 2022 to December 2023. Prior to JetBlue, Mr. Spencer served as Deputy CFO and Corporate Controller of the North American business of Paris-based Air Liquide SA, a manufacturer of industrial gases from August 2017 to May 2022. Also at Air Liquide, Mr. Spencer served as Vice President, North American Finance Transformation from April 2020 to December 2020 and Controller and Chief Accounting Officer from August 2017 to April 2020. Before joining Air Liquide, Mr. Spencer served in progressive roles of leadership at NCI Building System, Friedkin Services Group and ExpressJet Airline.

 

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Stock Ownership of Directors, Named Executive Officers

and Certain Beneficial Owners

STOCK OWNERSHIP OF DIRECTORS AND NAMED EXECUTIVE OFFICERS

The following table sets forth information concerning beneficial ownership of the Company’s common stock as of March 4, 2024, for: (a) each director and the nominees for director; (b) named executive officers (NEOs); and (c) all current directors and executive officers as a group. The percentage of beneficial ownership is based on 214,734,434 shares of common stock outstanding as of March 4, 2024. The percentage of beneficial ownership also includes any shares that such person has the right to acquire within 60 days of March 4, 2024. Unless otherwise indicated, each person has sole voting and dispositive power with respect to the shares set forth in the following table.

The address of the directors and executive officers is c/o NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540.

 

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53

STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS

The following table sets forth information for each person known to the Company to own more than five percent of the Company’s common stock, as of the date of their most recent Schedule 13D or Schedule 13G filing, as applicable, with the SEC. Percentage of beneficial ownership is based on 214,734,434 shares of common stock outstanding as of March 4, 2024. Unless otherwise indicated, each person has sole investment and voting power with respect to the shares set forth in the following table.

The Company’s directors and executive officers and the beneficial owners of more than ten percent (10%) of the Company’s shares are required to file under the Exchange Act reports of ownership and changes of ownership with the SEC.

Based solely on a review of copies of Section 16 filings filed electronically with the SEC and, as applicable, information provided to the Company by individual directors and executive officers and the beneficial owners of more than ten percent (10%) of the Company’s shares, the Company believes that, during fiscal year 2023, all filing requirements applicable to directors and executive officers have been complied with in a timely manner, except for: (i) Mr. Pourbaix and Ms. Zlotnik each had a late Form 3 as a result of a delay relating to the generation of updated EDGAR codes, and (ii) Mr. Patel, Ms. Pruner, and Ms. Schaumburg each had a late Form 4 due to an administrative error.

 

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Certain Relationships and Related Person Transactions

REVIEW, APPROVAL OR RATIFICATION OF TRANSACTIONS WITH RELATED PERSONS

The Board has adopted written policies and procedures to address potential or actual conflicts of interest and the appearance that decisions are based on considerations other than the best interests of NRG that may arise in connection with transactions with certain persons or entities (Related Person Policy). The Related Person Policy operates in conjunction with our Code of Conduct and is applicable to all “Related Person Transactions,” which are all transactions, arrangements or relationships in which:

•

the aggregate amount involved will or may be expected to exceed $50,000 in any calendar year;

​

•

the Company is a participant; and

​

•

any Related Person (as that term is defined below) has or will have a direct or indirect interest.

​

A “Related Person” is:

•

any person who is, or at any time during the applicable period was, a director of the Company or a nominee for director or an executive officer;

​

•

any person who is known to the Company to be the beneficial owner of more than 5% of the outstanding common stock;

​

•

any immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the director, nominee for director, executive officer or more than 5% beneficial owner of common stock, and any person (other than a tenant or employee) sharing the household of such director, nominee for director, executive officer or more than 5% beneficial owner of common stock; and

​

•

any related party as the term is defined in Statement of Financial Accounting Standards No. 57.

​

A Related Person Transaction is subject to review and approval or ratification by the Governance and Nominating Committee. If the aggregate amount involved is expected to be less than $500,000, the transaction may be approved or ratified by the Chair of the Governance and Nominating Committee. As part of its review of each Related Person Transaction, the Governance and Nominating Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than the terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. This Related Person Policy also provides that certain transactions, based on their nature and/or monetary amount, are deemed to be pre-approved or ratified by the Governance and Nominating Committee and do not require separate approval or ratification.

Transactions involving ongoing relationships with a Related Person will be reviewed and assessed at least annually by the Governance and Nominating Committee to ensure that such Related Person Transactions remain appropriate and in compliance with the Governance and Nominating Committee’s guidelines. The Governance and Nominating Committee’s activities with respect to the review and approval or ratification of all Related Person Transactions are reported periodically to the Board.

 

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Executive Compensation

COMPENSATION DISCUSSION AND ANALYSIS

​	EXECUTIVE SUMMARY	​	​	​	​	57	​	​
​	Management Changes in 2023	​	​	​	​	59	​	​
​	Interim CEO Compensation Arrangement	​	​	​	​	59	​	​
​	Key Governance Features of Our Executive Compensation Program	​	​	​	​	60	​	​
​	EXECUTIVE COMPENSATION PROGRAM	​	​	​	​	61	​	​
​	2023 Named Executive Officers	​	​	​	​	61	​	​
​	Goals and Objectives of the Program	​	​	​	​	61	​	​
​	THE COMPENSATION PROCESS	​	​	​	​	62	​	​
​	Compensation Consultant	​	​	​	​	62	​	​
​	Survey Analysis for Executive Compensation	​	​	​	​	62	​	​
​	ELEMENTS OF COMPENSATION	​	​	​	​	62	​	​
​	Base Salary	​	​	​	​	63	​	​
​	Annual Incentive Compensation	​	​	​	​	63	​	​
​	Overview	​	​	​	​	63	​	​
​	2023 AIP Award Performance Criteria	​	​	​	​	64	​	​
​	2023 AIP Results and Payments	​	​	​	​	66	​	​

​	Long-Term Incentive Compensation	​	​	​	​	67	​	​
​	LTIP Award Opportunity	​	​	​	​	68	​	​
​	LTIP Awards	​	​	​	​	68	​	​
​	Relative Performance Stock Units	​	​	​	​	68	​	​
​	Restricted Stock Units	​	​	​	​	69	​	​
​	Dividend Equivalent Rights	​	​	​	​	69	​	​
​	Clawback of Certain Compensation	​	​	​	​	69	​	​
​	Benefits	​	​	​	​	70	​	​
​	Potential Severance and Change-in-Control Benefits	​	​	​	​	70	​	​
​	OVERSIGHT OF RISKS RELATED TO COMPENSATION POLICIES	​	​	​	​	71	​	​
​	ANTI-HEDGING AND ANTI-PLEDGING POLICIES	​	​	​	​	71	​	​
​	OTHER MATTERS	​	​	​	​	72	​	​
​	Stock Ownership Guidelines	​	​	​	​	72	​	​
​	Tax and Accounting Considerations	​	​	​	​	72	​	​

COMPENSATION TABLES and OTHER ITEMS

​	COMPENSATION TABLES	​	​	​	​	73	​	​
​	Summary Compensation Table for Fiscal Year Ended December 31, 2023	​	​	​	​	73	​	​
​	Grants of Plan-Based Awards for Fiscal Year Ended December 31, 2023	​	​	​	​	75	​	​
​	2023 Annual Incentive Plan	​	​	​	​	76	​	​
​	2023 Long-Term Equity Incentives	​	​	​	​	76	​	​
​	Restricted Stock Units	​	​	​	​	76	​	​
​	Termination and Change in Control Provisions of RSUs	​	​	​	​	76	​	​
​	Termination and Change in Control Provisions of Interim CEO RSUs	​	​	​	​	76	​	​
​	Relative Performance Stock Units	​	​	​	​	77	​	​
​	Outstanding Equity Awards at Fiscal Year-End for Fiscal Year Ended December 31, 2023	​	​	​	​	79	​	​
​	Option Exercises and Stock Vested for Fiscal Year Ended December 31, 2023	​	​	​	​	80	​	​

​	Pension Benefits for Fiscal Year Ended December 31, 2023	​	​	​	​	81	​	​
​	Non-Qualified Deferred Compensation for Fiscal Year Ended December 31, 2023	​	​	​	​	81	​	​
​	EMPLOYMENT AGREEMENTS	​	​	​	​	81	​	​
​	SEVERANCE AND CHANGE-IN-CONTROL	​	​	​	​	82	​	​
​	POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL	​	​	​	​	84	​	​
​	CEO PAY RATIO	​	​	​	​	85	​	​
​	PAY VERSUS PERFORMANCE	​	​	​	​	85	​	​

 

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EXECUTIVE SUMMARY

The objectives of our executive compensation program are to align executive pay with stockholder value and to incentivize executives to achieve our corporate goals. This CD&A describes the elements, implementation, and 2023 results of our executive compensation program.

At our 2023 Annual Meeting of Stockholders, we received 96% support for our say on pay proposal. As a result, we believe that our stockholders understand that our pay practices demonstrate our commitment to pay for performance and that our compensation program, policies, and practices align with this commitment. Our Board and Compensation Committee consider the results of the say on pay proposal each year in informing annual compensation decisions.

During 2023, we continued to advance our strategy to maximize stakeholder value through the safe production and sale of reliable electricity and natural gas while also providing innovative home solutions to customers in the markets we serve. In addition, we generated recurring cash flow, significantly strengthened earnings and cost competitiveness, and lowered risk and volatility. To effectuate our strategy, we focused on the following objectives in 2023:

•

serving the energy needs of end-use residential, commercial and industrial, and wholesale counterparties in competitive markets and optimizing product opportunities through our multiple brands and channels;

​

•

offering a variety of energy and home products and services, including renewable energy solutions and smart home products and services that are differentiated by innovative features, premium service, integrated platforms, sustainability and loyalty/affinity programs;

​

•

excellence in operating performance of our assets;

​

•

achieving the optimal mix of supply to serve our customer load requirements through a diversified supply strategy; and

​

•

engaging in disciplined and transparent capital allocation.

​

Management’s focus on achieving these objectives drove a variety of business successes during 2023, including the completion of the following strategic transactions: (i) the acquisition of Vivint, a leading smart home platform company, and achievement of $100 million under the growth plan; (ii) portfolio optimization, including the sale of our 44% equity interest in the South Texas Project, a nuclear generating facility located near Bay City, Texas, for $1.7 billion, and the retirement of 1.4 GWs of generation in the PJM markets; and (iii) disciplined capital allocation through the execution of $1.2 billion in share repurchases and $1.5 billion in debt reduction. In addition to these strategic transactions, during 2023, we attained financial targets exceeding our Free Cash Flow before Growth guidance and at the high end of our Adjusted EBITDA guidance.