As part
Since environmental responsibility is instilled at every level of our ongoing operations, NRG, is required to comply with environmental rules and regulations. Since environmental responsibility is instilled at every level of the Company, we have adopted an Environment-Over-Production policy, which empowers any of our colleagues to take actions that are necessary to comply with environmental rules and requirements even if such actions result in reduced production at our facilities. As part of our ongoing operations, NRG complies with numerous environmental requirements. In addition, we carefully measure and track compliance with environmental requirements and our own more stringent standards using Environmental Key Performance Indicators (EKPIs) so that we can improve continually. These measures are reported internally to management and our Board, and externally in our annual sustainability report. | | Our EKPI metric counts environmental incidents such as reportable spills, permit deviations and receipt of Notices of Violation. Fewer incidents result in reduced production ata lower score. In 2021, we saw an increase in EKPIs resulting from a combination of events, including more generation, increased enforcement and natural variation in small data sets. In 2022, we saw a decrease in EKPIs and continue to see improvement against our facilities.In addition, we carefully measure and track compliance with environmental requirements and our own more stringent standards using Environmental Key Performance Indicators (EKPIs) so that we can improve continually. These measures are reported internally to management and our Board, and externally in our annual sustainability report. We have an exemplary record in continual improvement.
2014 base year. | | 
| | |
Our environmental performance metric counts environmental incidents such as reportable spills, permit deviations and receipt of Notices of Violation. Fewer incidents means a lower score. The chart shows the company’s EKPI score per year as a percentage of the baseline year of 2014.
We integrate environmental considerations into strategic and operational decisions. We have demonstrated our commitment by reducing our impact on the environment in several areas. Our annual SOx and NOx air emissions have declined significantly over the last five years.since 2014. In addition, we published industry-leading GHG-reductionestablished industry leading 2 degree Celsius-aligned GHG emission reduction goals in 20142015 and became the first power company to adopt a Science-Based Target.earn certification 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 by 90% by 2050. In 2019, NRG announced the acceleration of these GHG emissions reductionits goals to align with new Intergovernmental Panel on Climate Change (IPCC) guidance,prevailing climate science, which calls forurged limiting global warming in the post-industrial era to a 1.5˚ Celsius increase. Under our GHG emissions reduction timeline, we are targeting1.5 degree Celsius. These updated goals target a 50% reduction by 2025 from our current 2014 base year, and net-zero emissions by 2050 from2050. In March 2021, SBTi certified these updated goals as 1.5 degree Celsius-aligned. The Company is continuing to target a 2014 baseline.
SUSTAINABLE SUPPLIERS
An analysis of carbon and water50% reduction in greenhouse gas emissions by 2025; however, assuming no mitigating events occur, current power market forecasts suggest that the projected reduction in our greenhouse gas emissions at that time will be less than the targeted goal. The Company expects these forecasts to continue to evolve over time given recent and expected future changes in regulatory policies and volatility in electricity and natural gas markets. The Company continues to actively monitor and explore various options to meet the goal when both economically and legally feasible.
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 25 million metric tons of CO2e or 42%, equivalent to avoiding more than 62 billion miles driven by an average passenger vehicle. The decrease is attributed to reductions in fleet-wide annual net generation and a market-driven shift away from coal as a primary fuel to natural gas. The increase in emissions in 2022, as compared to 2021, was primarily due to increased generation driven by power market conditions and weather. The generation in the chart includes generation from all fuels represented in our portfolio — coal, natural gas, nuclear, oil, and renewables — which is discussed further in our Annual Report on Form 10-K. In 2022, 10.4 TWh or 20.0% of U.S. Generation was from nuclear and renewables and therefore had zero emissions.1 In furtherance of our sustainability commitment, in 2021, we added a new 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. SUSTAINABLE SUPPLIERS Our supply chain revealed that most ofinitiatives 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 impacts occurdisclosure practices for those with the fuel suppliers. This insight enableswhom we do business. The importance we place on supply chain transparency has also led us to address the most significant areas of impact and the vendors that comprise the largest portion ofpursue external collaboration with other companies in our supply chain footprint. As a result, since 2017, NRG was a founding member ofsector through organizations such as the Natural Gas Supply Collaborative, (NGSC), a voluntary groupcollaborative of natural gas purchasers, promoting transparency through voluntary reporting. Additionally, we are a member of CDP’s Supplier Engagement Program, which asks suppliers to voluntarily disclose environmental informationpromote safe and responsible practices for investment decisions. NRG was named a CDP Supplier Engagement Leader in 2017 and 2018. In January 2019, we earned an A-; Leadership level, on the CDP Climate Change and Water questionnaires as well as Supply Chain Engagement.natural gas supply. NRG has a robust Supplier Code of Conduct as well as a Human Rights & Social Responsibility in Manufacturing Standards Policy. We require all contract manufacturers (including subcontractors) to adhere to our Social Responsibility Standards for Manufactures Policy, which requires compliance with applicable laws and regulations, industry best practices and the International Labour Organization Declaration on Fundamental Principles and Rights at Work.this policy. Third-party audits are conducted each yearregularly, and NRG reportswe report the results of such third-party manufacturing audits to the Board’s Audit Committee.
1
Renewables generation is equivalent to the figure shown in the Net Generation table in the Annual Report on Form 10-K plus the net generation from NRG’s 54.5% ownership of Ivanpah, a concentrated solar thermal plant, which is accounted for separately as an equity method investment. Ivanpah also uses natural gas to start up its steam plant and to supplement load under certain weather conditions; in 2022, emissions associated with Ivanpah’s natural gas use represented less than 0.1% of NRG’s total power plant emissions.
STOCKHOLDER AND STAKEHOLDER ENGAGEMENTStockholder feedback is important to our Board’s decision-making process and has driven recent changes to our governance and compensation practices. In light of our Transformation Plan, in early 2018, we initiated
We have a broad stockholder outreach program to discuss NRG’s long-term strategy and sustainability goals, as well as to review and seek feedback on our governance, sustainability, governance, and compensation practices. We reached out to and had discussions with stockholders representing approximately 37% of our shares outstanding. During 2019,2022, one or more members of management were involved in more than 50 in-person and telephonic meetingsspoke with investorsstockholders representing more than 30%50% of our shares outstanding. We regularly engage with stockholders concerning our Board, governance, ESG 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 our stakeholders (including our stockholders) 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 stockholders, non-government organizations (NGOs), community and industry groups, and academia, among others, helps us identify and pursue potential opportunities to decarbonize our business and better serve our customers. In support of this effort, NRG is a member of Ceres, a non-profit organization whose mission is to “mobilize investor and business leadership to build a thriving, sustainable, global economy.” With Ceres, we are able to set up a formal stakeholder advisory body, which may include key stockholders, customers, leading NGOs, policy groups, and energy experts. Additionally, we proactively engage with other leading companies and organizations to help advance standards, share best practices and drive action toward a sustainable economy. NRG also actively supports the climate-tech community through various initiatives highlighted below, to help identify technologies and partners that could further assist in the decarbonization of our business.
Finally, NRG participates in several multi-stakeholder group consortia working to scale various decarbonization pathways. 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 from stockholders 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 his or 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.
PROPOSAL NO. 1Election of Directors
ELECTION OF DIRECTORS The Board is comprised of 11 members, all10 of whom will stand for election at the Annual Meeting, exceptMeeting. As part of our ongoing Board succession planning, Mr. Weidemeyer will not stand for Terry G. Dallas who has notifiedreelection. Mr. Weidemeyer will continue to serve as a director until the expiration of his term at the Annual Meeting. Our Bylaws provide that the number of directors will be determined by the Board of his determination notDirectors, and the number of directors is currently set at eleven. We will reduce the number of directors to stand for re-election. ten following the Annual Meeting. 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.
| Age:67
70
Director Since: 2012
Board Committees:
Compensation (Chair)
Nuclear Oversight
| | Secretary Abraham has been a director of NRG since December 2012. Previously, he served as a director of GenOn Energy, Inc. from January 2012 to December 2012. He is Chairman
| Director Qualifications and Chief Executive Officer of The Abraham Group LLC, an international strategic consulting firm based in Washington, D.C. which he founded in 2005. Prior to that, Secretary Abraham served as Secretary of Energy under President George W. Bush from 2001 through January 2005 and was a U.S. Senator for the State of Michigan from 1995 to 2001. Secretary Abraham serves on the boards of the following public companies: Occidental Petroleum Corporation, PBF Energy, Two Harbors Investment Corp. and Uranium Energy Corp. Secretary Abraham previously served as the non-executive chairman of AREVA, Inc., the U.S. subsidiary of the French-owned nuclear company, and as a director of Deepwater Wind LLC, International Battery, Green Rock Energy, ICx Technologies, PetroTiger, Sindicatum Sustainable Resources and C3 IoT. He also previously served on the advisory board or committees of Midas Medici (Utilipoint), Millennium Private Equity, Sunovia and Wetherly Capital. Secretary Abraham joined Blank Rome Government Relations LLC as a Principal on or about May 9, 2016.Experience Secretary Abraham’s nearlyover two decades at the highest levels of domestic and international policy and politics give him the experience necessary to provide a significant contribution to the Board. As a former U.S. Senator and former U.S. Secretary of Energy who directed key aspects of the country’s energy strategy, Secretary Abrahamhe provides the Board unique insight into public policy and regulatory-related issues. |
Antonio Carrillo
Age:53
Board Committees:
Audit
Compensation
Nuclear Oversight
| | Mr. Carrillo has been a director In these capacities, he developed policies and regulations to ensure the nation’s energy security, oversaw the Department of NRG since October 2019. Mr. Antonio Carrillo has served as Arcosa Inc.’s PresidentEnergy’s environmental management program (a multibillion-dollar environmental remediation project), was responsible for domestic oil and gas development and nuclear energy policy, and led the landmark nuclear nonproliferation program between the United States and Russia.
Business Experience •
Chairman and Chief Executive Officer, since November 2018 and serves as a memberAbraham Group LLC (2005 to present) •
Senior Advisor, Blank Rome Government Relations LLC (May 2016 to present) •
Secretary of its BoardEnergy (2001 to January 2005) •
U.S. Senator for the State of Directors. From April 2018Michigan (1995 to November 2018, Mr. Carrillo served as Senior Vice President and Group President of Construction,2001) Other Public Company Boards •
PBF Energy Marine and Components of Trinity Industries, Inc. (Trinity). From(August 2012 to February 2018, Mr. Carrillo served as the Chief Executive Officer of Orbia Advance Corporation (formerly known as Mexichem S.A.B. de C.V.) (Orbia), a publicly-traded global specialty chemical company. Priorpresent) •
Two Harbors Investment Corp. (May 2014 to joining Orbia, Mr. Carrillo spent 16 years at Trinity where he served as Senior Vice President and Group President of Trinity’spresent) •
Uranium Energy Equipment Group and was responsible for Trinity’s Mexico operations. Mr. Carrillo previously served as a director of Trinity from 2014 until November 2018 and a director of Dr Pepper Snapple Group, Inc. fromCorp. (October 2015 to 2018.present) Former Public Company Boards •
Occidental Petroleum Corporation (May 2005 to May 2020) •
GenOn Energy, Inc. (January 2012 to December 2012) | |
| | Antonio Carrillo Age: 56
Director Since: 2019
Board Committees:
Audit
Compensation
Nuclear Oversight | | | Director Qualifications and Experience Mr. Carrillo’s executive management experience with industrial and infrastructure companies, balanced with service on a public company, customer-facing board brings not only complex management experience, but important and diverse customer perspectives. |
Matthew Carter, Jr.
Age:59
Board Committees:
Audit
Governance and Nominating
Nuclear Oversight
| | Mr. Carter has been a director of NRG since March 2018. Mr. Carter was appointed asperspectives to the Chief Executive Officer of Aryaka Networks, Inc. in September, 2018. Prior to this, Mr. Carter served as Board.
Business Experience •
President, and Chief Executive Officer and a director of Inteliquent,Director, Arcosa Inc., a publicly traded provider of voice telecommunications services, from June 2015 until February 2017 when Inteliquent, Inc. was acquired. He served as (November 2018 to present) •
Senior Vice President and Group President of the Sprint Enterprise Solutions business unitConstruction, Energy, Marine and Components of SprintTrinity Industries Inc. (April 2018 to November 2018) •
Chief Executive Officer, Orbia Advance Corporation a publicly traded telecommunications company, from September 2013 until January 2015 and, previous(2012 to that position, served as President, Sprint Global Wholesale & Emerging Solutions at Sprint Nextel Corporation. Mr. Carter also serves as a director of Jones Lang Lasalle Incorporated, a publicly traded investment management and professional services company, and is currently a member of the Audit Committee. He previously served as a director of USG Corporation from 2012 to 2018, Apollo EducationFebruary 2018) Former Public Company Boards •
Dr. Pepper Snapple Group, Inc. from 2012(2015 to 20172018) •
Trinity Industries Inc. (2014 to November 2018) | |
| | Matthew Carter, Jr. Age: 62
Director Since: 2018
Board Committees:
Compensation
Governance and Inteliquent, Inc. from June 2015 to February 2017Nominating
Nuclear Oversight | | | Director Qualifications and has significant marketing, technology and international experience, including previous management oversight for all of Inteliquent, Inc.’s operations.Experience Mr. Carter’s experience as a chief executive officer brings valuable management expertise and significant operational, marketingcorporate leadership, brand management and technology experienceexpertise to the Board. |
Lawrence S. Coben
Age:61
Board Committees:
Chairman of the Board
Nuclear Oversight (Chair)
| | Dr. Coben has served as Chairman of the Board since February 2017, and has been a director of NRG since December 2003. Dr. Coben is also Executive Director of the Sustainable Preservation Initiative and a Consulting Scholar at the University of Pennsylvania Museum of Archaeology and Anthropology. Previously, he was Chairman and
Business Experience •
Chief Executive Officer, of Tremisis Energy Corporation LLC from 2003-2017. Dr. Coben was Chairman andAryaka Networks, Inc. (September 2018 to present) •
President, Chief Executive Officer of both Tremisis Energy Acquisitionand Director, Inteliquent, Inc. (June 2015 to February 2017) •
President, Sprint Enterprise Solutions, Sprint Corporation II, a publicly held company, from July 2007 through March 2009 and of Tremisis Energy Acquisition Corporation from May 2004 to May 2006. From January 2001(September 2013 to January 2004, he was a Senior Principal of Sunrise Capital Partners L.P., a private equity firm. From 19972015) Other Public Company Boards •
Jones Land Lasalle Incorporated (November 2018 to January 2001, Dr.present) Former Public Company Boards •
USG Corporation (2012 to 2018) •
Inteliquent, Inc. (2015 to 2017) •
Apollo Education Group, Inc. (2012 to 2017) | |
| | Lawrence S. Coben was an independent consultant. From 1994 to 1996, Dr. Coben was Chief Executive Officer of Bolivian Power Company. Dr. Coben serves on the board of Freshpet, Inc. Age: 64
Director Since: 2003
Board Committees:
Board Chair (since 2017)
Nuclear Oversight (Chair) | | | Director Qualifications and served on the advisory board of Morgan Stanley Infrastructure II, L.P. from September 2014 through December 2016.Experience Dr. Coben’s experience as a chief executive officer and investor in the energy industry brings a valuable cross sectioncross-section of skills to the Board. Dr. CobenHe brings to the Board significant managerial, strategic, and financial expertise, particularly as it relates to Company financings, transactions and development initiatives. |
Heather Cox
Age: 49
In addition, as the founder of the Sustainable Preservation Initiative and current Executive Director of the Escala Initiative, he is uniquely positioned to understand and provide insight to the Board Committees:
Compensation Governanceon matters relating to human rights and Nominating
Nuclear Oversight
| | Ms. Cox has been a directorinequality, and as founder of NRG since March 2018. Ms. Cox became Chief Digital HealthCatalyst Energy Corporation, one of the first alternative energy companies in the United States, he gained extensive experience in the investment and Analytics Officer at Humana Inc. in August 2018. Previously, Ms. Cox was development of sustainable energy projects.Business Experience •
Executive Vice President, Chief Technology & Digital OfficerDirector, Escala Initiative (formerly Sustainable Preservation Initiative) (2011 to present) •
Consulting Scholar, University of United Services Automobile Association, Inc. from October 2016Pennsylvania Museum of Archaeology and Anthropology (2012 to March 2018. Ms. Cox served aspresent) •
Chairman and Chief Executive Officer, Financial Technology DivisionTremisis Energy Corporation LLC and Head of Citi FinTech of Citigroup,its affiliates (2003 to 2017) •
Senior Principal, Sunrise Partners L.P. (January 2001 to January 2004) •
Independent Consultant (1997 to January 2001) •
Chief Executive Officer, Bolivian Power Company (1994 to 1996) Other Public Company Boards •
Freshpet, Inc. from November 2015 to September 2016, and as Chief Client Experience, Digital and Marketing Officer, Global Consumer Bank of Citigroup, Inc. from April(November 2014 to November 2015. Prior to that, Ms.present)
| |
| | Heather Cox served at Capital One Financial Corporation for six years, most recently as Executive Vice President, US Card Operations, Capital One from August 2011 to August 2014. Ms. Cox also served in various managerial Age: 52
Director Since: 2018
Board Committees:
Compensation
Governance and executive roles at E*Trade Bank for ten years.
Nominating (Chair)
Nuclear Oversight
| | | Director Qualifications and Experience Ms. Cox is able to provide the Board with significant insight based on her digital transformation, innovation, technology, operations and customer service experience. |
Mauricio Gutierrez
Age:49
Board Committees:
Nuclear Oversight
| | Mr. Gutierrez has served as President
Business Experience •
Chief Digital Health and CEO of NRG since December 2015 and as a director of NRG since January 2016. PriorAnalytics Officer, Humana Inc. (August 2018 to December 2015, Mr. Gutierrez was the June 2022) •
Executive Vice President and Chief OperatingTechnology & Digital Officer, of NRG from July 2010United Services Automobile Association Inc. (October 2016 to December 2015. Mr. Gutierrez also served as the Interim President and March 2018) •
Chief Executive Officer, Financial Technology Division and Head of Clearway Energy,Citi FinTech of Citigroup, Inc. (Clearway) (formerly NRG Yield, Inc.) from December(November 2015 to May 2016September 2016) •
Chief Client Experience, Digital and Marketing Officer, Global Consumer Bank of Citigroup, Inc. (April 2014 to November 2015) •
Executive Vice President, U.S. Card Operations (August 2011 to August 2014) Other Public Company Boards •
Atlantic Union Bank (August 2022 to present) | |
| | Elisabeth B. Donohue Age: 57
Director Since: 2020
Board Committees:
Finance and Chief Operating OfficerRisk Management
Governance and Nominating
Nuclear Oversight | | | Director Qualifications and Experience Ms. Donohue’s experiences in brand and consumer led marketing brings valuable diversity of Clearway from December 2012thought and expertise to December 2015. Mr. Gutierrez also served on the board of Clearway through August 2018. Mr. GutierrezBoard as NRG advances its strategic transformation to a consumer services company led by dynamic retail brands. She not only brings extensive experience in global consumer marketing but has been at the forefront of both digital, data and technology advancements in the marketing ecosystem. As chief executive officer of two major marketing agencies, Ms. Donohue partnered with NRG since August 2004 and served in multiple executive positions within NRG includingmany of the world’s leading consumer led companies. Business Experience •
Chief Executive Vice President — Commercial Operations from January 2009 to July 2010 and Senior Vice President — Commercial Operations from March 2008Officer, Publicis Spine (October 2017 to January 2009. Prior2020) •
President of Board of Trustees, Milton Academy (2015 to joining NRG in August 2004, Mr.2022) •
Publicis Management Committee (2017 to 2020) •
Global Brand President, Starcom Worldwide (April 2016 to October 2017) •
Chief Executive Officer, Starcom USA (2009 to 2016) Other Public Company Boards •
Gap Inc. (November 2021 to present) Former Public Company Boards •
AcuityAds Holdings Inc. (June 2021 to June 2022) •
Synacor (May 2017 to April 2021) | |
| | Mauricio Gutierrez held various commercial positions within Dynegy, Inc. Age: 52
Director Since: 2016
Board Committees:
Nuclear Oversight | | | Director Qualifications and Experience Mr. Gutierrez’s knowledge of the Company’s assets, operations and businesses bring important experience and skills to our Board. As our President and CEO, of the Company, Mr. Gutierrezhe also provides our Board with management’s perspective regarding the Company’sNRG’s day-to-day operations and overall strategic plan. His extensive energy industry and leadership experience enables Mr. Gutierrezhim to provide essential guidance to our Board. |
Paul W. Hobby
Age:59
Board Committees:
FinanceBusiness Experience •
President and Risk Management (Chair)Nuclear Oversight
| | Mr. Hobby has been a director ofCEO (December 2015 to present) and Director (January 2016 to present), NRG since March 2006. Mr. Hobby is the Managing Partner of Genesis Park, L.P., a Houston-based private equity business specializing in technologyEnergy Inc.
•
Executive Vice President and communications investments which he founded in 1999. Mr. Hobby routinely provides management and governance servicesChief Operating Officer, NRG Energy Inc. (July 2010 to Genesis Park portfolio companies. He previously served as the Chief December 2015) •
Executive Officer of Alpheus Communications,Vice President — Commercial Operations, NRG Energy Inc., a Texas wholesale telecommunications provider from 2004 (January 2009 to 2011, and as Former Chairman of CapRock Services Corp., the largest provider of satellite servicesJuly 2010) •
Senior Vice President — Commercial Operations, NRG Energy Inc. (March 2008 to the global energy business from 2002 to 2006. From November 1992 until January 2001, he served as Chairman2009) •
Interim President and Chief Executive Officer, ofClearway Energy Inc. (formerly NRG Yield, Inc.) (December 2015 to May 2016) •
Executive Vice President and Chief Operating Officer, Clearway Energy Inc. (December 2012 to December 2015) Other Public Company Boards •
Chipotle Mexican Grill, Inc. (March 2021 to present) Former Public Company Boards •
Clearway Energy Inc. (January 2016 to August 2018) | |
| | Paul W. Hobby Media Services Age: 62
Director Since: 2006
Board Committees:
Audit
Compensation
Nuclear Oversight | | | Director Qualifications and was Chairman of Columbine JDS Systems, Inc. from 1995 until 1997. Experience Mr. Hobby is former Chairman of the Houston Branch of the Federal Reserve Bank of Dallas and the Greater Houston Partnership and is former Chairman of the Texas Ethics Commission. He was an Assistant U.S. Attorney for the Southern District of Texas from 1989 to 1992, Chief of Staff to the Lieutenant Governor of Texas, Bob Bullock and an Associate at Fulbright & Jaworski from 1986 to 1989.Mr. Hobby joined the Board following the Company’s acquisition of Texas Genco, LLC in which he served on its board of directors, and as a result brings historical and present contextinsight to the Company’s ongoing business endeavors in the Texas region.and beyond. The Board also values his entrepreneurial, financial and M&Amergers and acquisitions (M&A) expertise in evaluating the Company’s growth initiatives, as well as his involvement in the Houston and greater Texas community, which is the Company’s principal market.
His engagement with the Greater Houston Partnership and with portfolio and public company boards has provided him with substantial experience analyzing and assessing business strategy and execution in the context of evolving social risks.Business Experience •
Managing Partner, Genesis Park, L.P. (1999 to present) •
Chief Executive Officer Genesis Park Acquisition Corp. (November 2020 to August 2021) •
Chief Executive Officer, Alpheus Communications, Inc. (2004 to 2011) •
Chairman, CapRock Services Corp. (2002 to 2006) •
Chairman and Chief Executive Officer, Texas Monthly LLC (November 2016 to July 2019) •
Chairman of Columbine JDS Systems, Inc. (1995 to 1997) •
Former Chairman of the Houston Branch of the Federal Reserve Bank of Dallas, the Greater Houston Partnership (2013 to 2014) and the Texas Ethics Commission (2014 to 2016) •
Assistant U.S. Attorney for the Southern District of Texas (1989 to 1992) •
Chief of Staff to the Lieutenant Governor of Texas, Bob Bullock (1986 to 1989) Former Public Company Boards •
Flotek Industries, Inc. (March 2019 to May 2022) •
Genesis Park Acquisition Corp. (November 2020 to August 2021) | |
| Age:58
61
Director Since: 2019
Board Committees:
Audit
Finance and Risk Management Governance(Chair)
Nuclear Oversight | | | Director Qualifications and Nominating Nuclear Oversight | | Ms. Pruner has been a director of NRG since October 2019. Ms. Pruner has served as a Senior Advisor of Perella Weinberg Partners, a global independent advisory firm providing strategic and financial advice and asset-management services, and its energy division, Tudor, Pickering, Holt & Co., since December 2018. She previously served as Partner and Chief Financial Officer of Perella Weinberg Partners from December 2016 through November 2018. She served as Chief Financial Officer and a member of the Management Committee at Tudor, Pickering, Holt & Co. from the firm’s founding in 2007 until its combination with Perella Weinburg Partners in 2016. Ms. Pruner serves on the Board of Directors and as a member of the audit committees of Plains All American Pipeline, L.P. and its general partner PAA GP Holdings LLC, and served on the Anadarko Petroleum Corporation Board until its merger with Occidental Petroleum. She is the founder and a Board member of Women’s Global Leadership Conference in Energy & Technology, is an Emeritus Director of the Amegy Bank Development Board and is the Chair of Brown University’s President’s Advisory Council on the Economics Department. Ms. Pruner is on the Board of the Houston Zoo and serves on the Houston advisory Board of The Nature Conservancy, among other volunteer efforts.
Experience Ms. Pruner brings extensive financial and industry experience and expertise to the Board, which is valuable to the review of the Company’s financings, transactions, and overall financial oversight. In addition, the Board also values Ms. Pruner’sher involvement in the Houston and greater Texas community, which is the Company’s principal market. Business Experience •
Senior Advisor, Perella Weinberg Partners; Tudor, Pickering, Holt & Co. (December 2018 to present) •
Partner and Chief Financial Officer, Perella Weinberg Partners (December 2016 to November 2018) •
Chief Financial Officer, Tudor, Pickering, Holt & Co. (February 2007 to 2016) Other Public Company Boards •
Plains All American Pipeline, L.P. (December 2018 to present) Former Public Company Boards •
Anadarko Petroleum Corporation (November 2018 to August 2019) | |
| Age:70
73
Director Since: 2005
Board Committees:
Audit (Chair) Compensation
Finance and Risk Management
Nuclear Oversight
| | Ms. Schaumburg has been a director of NRG since April 2005. From 1984 until her retirement in January 2002, she was a Managing
| Director of Credit Suisse First BostonQualifications and a senior banker in the Global Energy Group. Ms. Schaumburg has worked in the Investment Banking industry for 28 years specializing in the power sector. She ran Credit Suisse’s Power Group from 1994 – 1999, prior to its consolidation with Natural Resources and Project Finance, where she was responsible for assisting clients on advisory and finance assignments. Her transaction expertise, across the spectrum of utility and unregulated power, includes mergers and acquisitions, debt and equity capital market financings, project finance and leasing, utility disaggregation and privatizations. Ms. Schaumburg has been a director of Brookfield Infrastructure Partners since 2008 and is chair of the Audit Committee.Experience Ms. Schaumburg brings extensive financial and M&A experience and expertise to the Board which is valuable to the review of the Company’s financings, transactions, and overall financial oversight. In addition, Ms. Schaumburgshe is able to provide the Board with essential insight into the financial services industry and how investors may view the company.Company. Business Experience •
Managing Director and Senior Banker, Global Energy Group, Suisse First Boston (1984 to 2002) •
Credit Suisse Power Group (1994 to 1999) Other Public Company Boards •
Brookfield Infrastructure Partners (2008 to present) •
Brookfield Asset Management Reinsurance Partners (2021 to present) | |
Thomas H. Weidemeyer
Age:72
Board Committees:
Governance and Nominating (Chair)
Finance and Risk Management
Nuclear Oversight
| | Mr. Weidemeyer has been a director of NRG since December 2003. Until his retirement in December 2003, Mr. Weidemeyer served as Director, Senior Vice President and Chief Operating Officer of United Parcel Service, Inc., the world’s largest transportation company and President of UPS Airlines. Mr. Weidemeyer became Manager of the Americas International Operation in 1989, and in that capacity directed the development of the UPS delivery network throughout Central and South America. In 1990, Mr. Weidemeyer became Vice President and Airline Manager of UPS Airlines and, in 1994, was elected its President and Chief Operating Officer. Mr. Weidemeyer became Senior Vice President and a member of the Management Committee of United Parcel Service, Inc. that same year, and he became Chief Operating Officer of United Parcel Service, Inc. in January 2001. Mr. Weidemeyer also serves as a director of The Goodyear Tire & Rubber Co. and Waste Management, Inc., and serves on the Audit Committees of both companies.
Mr. Weidemeyer’s executive management experience with a logistics company involving extensive supply chain management brings not only financial and accounting experience, but important skills highly valued both by the Company itself and by its Board of Directors. In addition, Mr. Weidemeyer’s service on other boards gives him a direct insight into best practices that is valuable to our Board.
|
The Board recommends a vote “FOR” the election to the
Board of each of the
foregoing nominees.
Proxies received by the Board will be voted “FOR” each of the
nominees unless a contrary vote is specified. | |
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.
| Compensation Element | | | | Compensation Amount
($) | |
|
| Annual Cash Retainer | | | | 100,000 | | | Annual Equity Retainer | 167,000
| | | 179,000 | | | Annual ChairpersonBoard Chair Retainer | | | | 200,000 | | | Audit Committee Chair Retainer | | | | 35,000 | | | Other Committee Chair Retainer | | | | 20,000 | | | Employee Directors | | | | No feescompensation | |
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 ChairpersonBoard Chair and Committee Chair Retainers, fifty percent (50%)50% is received in the form of cash and fifty percent (50%)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 his or her 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. Similar to its competitive assessment on behalf of the named executive officer compensation, Pay Governance performed a review of director compensation. Results of the review were shared with DETERMINATION OF BOARD CHAIR COMPENSATION As discussed in greater detail below, the Compensation Committee who madeand 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 2021, in order to provide a recommendationcomprehensive view of the market, Pay Governance compiled competitive market data for our Chair of the Board based on a general industry sample of 20 companies with independent, non-executive chairs as well as the two remaining publicly traded independent power companies of comparable scope to NRG at that time (AES Corporation and Vistra Corp.). The general industry sample included companies in a broad cross-section of industries that have a combination of revenue and market cap similar to NRG. For 2021, NRG’s average ranking on a revenues and market cap basis was at the 51st percentile of the general industry group. While more comparable from an industry perspective, during 2021, total revenue reported by Vistra Corp. and AES Corporation was less than half of the total revenue reported by NRG. Relative to the fullmarket data, total direct compensation (sum of all cash and equity retainers) for our Chair of the Board for final approval. There were no changeswas just below the 50th percentile (median) of the general industry group, modestly above Vistra Corp. and close to AES Corporation, at the time of the analysis.
In addition to the directormarket data, the Compensation Committee and Board consider the following factors in determining the compensation program for 2019.the Board’s independent Chair: the Chair’s role in a variety of significant strategic initiatives; the time commitment spent by the Chair on Company-related matters; participation in all Board and Committee meetings; participation in the CEO evaluation process and succession planning; and engagement and frequency of discussions with management regarding the Company’s strategic direction. DIRECTOR COMPENSATION FISCAL YEAR ENDED DECEMBER 31, 2019 Name | | Fees Earned
or
Paid in Cash
($) | | Stock Awards
($)(1) | | Total ($) | | | | | | | | E. Spencer Abraham | | 110,000 | | 181,865 | | 291,865 | Antonio Carrillo(2) | | 62,842 | | 167,138 | | 229,980 | Matthew Carter, Jr. | | 100,000 | | 168,386 | | 268,386 | Lawrence S. Coben | | 200,000 | | 273,456 | | 473,456 | Heather Cox | | 100,000 | | 167,840 | | 267,840 | Terry G. Dallas | | 100,000 | | 172,940 | | 272,940 | William E. Hantke(3) | | 100,000 | | 167,475 | | 267,475 | Paul W. Hobby | | 110,000 | | 177,008 | | 287,008 | Alexandra Pruner(4) | | 62,842 | | 167,138 | | 229,980 | Anne C. Schaumburg(5) | | 121,048 | | 188,721 | | 309,769 | Thomas H. Weidemeyer | | 110,000 | | 177,008 | | 287,008 |
| | Name | | | | Fees Earned or
Paid in Cash
($) | | | | Stock Awards
($)(1) | | | | Total
($) | | | | E. Spencer Abraham | | | | 110,000 | | | | 189,011 | | | | 299,011 | | | | Antonio Carrillo | | | | 100,000 | | | | 179,003 | | | | 279,003 | | | | Matthew Carter, Jr. | | | | 100,000 | | | | 179,003 | | | | 279,003 | | | | Lawrence S. Coben | | | | 200,000 | | | | 279,036 | | | | 479,036 | | | | Heather Cox | | | | 110,000 | | | | 189,011 | | | | 299,011 | | | | Elisabeth B. Donohue | | | | 100,000 | | | | 179,003 | | | | 279,003 | | | | Paul W. Hobby | | | | 100,000 | | | | 179,003 | | | | 279,003 | | | | Alexandra Pruner | | | | 110,000 | | | | 189,011 | | | | 299,011 | | | | Anne C. Schaumburg | | | | 117,500 | | | | 196,517 | | | | 314,017 | | | | Thomas H. Weidemeyer | | | | 100,000 | | | | 179,003 | | | | 279,003 | |
| (1) | | | Reflects the grant date fair value (GDFV) of DSUs awarded in 20192022 determined in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic 718, Compensation-StockCompensation — Stock Compensation, the full amount of which is recorded as a compensation expense in the income statement for fiscal year 2019.2022. The GDFVgrant date fair value was based on the closing |
price of the Company’sour common stock, as reported on the NYSE, on the date of grant, which was $34.04$45.49 per share of common stock on June 1, 2019. Also includes the GDFV of DERs payable in connection with DSUs paid to directors during the fiscal year ended December 31, 2019. For Mr. Carrillo and Ms. Pruner, the GDFV was based on the closing price of the Company’s common stock, as reported on the NYSE, on the date of grant, which was $39.38 per share of common stock on October 15, 2019. (2)On October 15, 2019, Mr. Carrillo was elected to the Board. He received a pro rata portion of the Annual Retainer upon his appointment in the amount of $62,842.
(3)Effective December 31, 2019, Mr. Hantke retired as a director.
(4)On October 15, 2019, Ms. Pruner was elected to the Board. She received a pro rata portion of the Annual Retainer upon her appointment in the amount of $62,842.
(5)Ms. Schaumburg received a cash payment totaling $3,548 for her Audit Chair services from April 25, 2019 to May 31, 2019.
2022. | |
The following table sets forth the aggregate number of stock awards (DSUs restricted stock units (RSUs) and DERs) and option awards (non-qualified stock options (NQSOs)) held by each of the non-employee directors as of December 31, 2019.2022. The non-employee directors did not own any option awards as of December 31, 2022.| | Name | | | | Stock Awards | | | | E. Spencer Abraham | | | | 63,218 | | | | Antonio Carrillo | | | | 4,708 | | | | Matthew Carter, Jr. | | | | 30,062 | | | | Lawrence S. Coben | | | | 132,845 | | | | Heather Cox(1) | | | | 20,173 | | | | Elisabeth B. Donohue | | | | 15,224 | | | | Paul W. Hobby(2) | | | | 0 | | | | Alexandra Pruner | | | | 19,430 | | | | Anne C. Schaumburg | | | | 82,343 | | | | Thomas H. Weidemeyer | | | | 34,876 | |
| | All DSUs held by the directors are payable upon termination of service as a Board member, other than the DSUs held by the following directors: | | | | (1) | | | Ms. Cox holds 4,906 DSUs and 544 DERs, which are payable on May 31, 2024. In addition, Ms. Cox holds 5,176 DSUs and 273 DERs, which are payable on June 1, 2026. | | | | (2) | | | Mr. Hobby elected to convert his DSUs to shares of NRG common stock immediately on the date of grant. | |
Name | Stock Awards | Option Awards | | | | E. Spencer Abraham | 43,156 | – | Antonio Carrillo | 4,245 | – | Matthew Carter, Jr. | 14,031 | – | Heather Cox | 4,914 | – | Lawrence S. Coben | 103,520 | – | Terry G. Dallas(1) | 52,056 | – | William E. Hantke(2) | 2,145 | – | Paul W. Hobby | - | – | Alexandra Pruner | 4,245 | – | Anne C. Schaumburg | 62,534 | – | Thomas H. Weidemeyer | 34,876 | – | All DSUs held by the directors are payable upon termination of service as a Board member, other than the DSUs held by the following directors: (1) Mr. Dallas holds 49,787 DSUs and 2,269 associated DERs, of which 25,004 DSUs and 238 DERs are payable upon his termination of service as a Board member, 6,196 DSUs and 508 DERs are payable on January 15, 2021, 6,196 DSUs and 507 DERs are payable on January 15, 2022, 6,196 DSUs and 508 DERs are payable on January 15, 2023 and 6,195 DSUs and 508 DERs are payable on January 15, 2024. (2) Mr. Hantke holds 2,125 DSUs and 20 DERs which are payable on June 1, 2020. |
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 2019.2022.
PROPOSAL NO. 2Advisory Vote
ADOPTION OF THE NRG ENERGY, INC. AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN On February 23, 2023, the Board approved an amendment and restatement of the ESPP which includes a reduction in the price at which our employees may purchase shares of the Company pursuant to Approvethe ESPP from 95% to 90% of the fair market value of the shares on the applicable date, adds 4,400,000 shares to the ESPP, and makes other technical amendments, including the allowance of a refund of a participant’s account balance if the amount is less than the fair market value of a share of common stock and the participant has not elected to make payroll deductions. Upon approval, the Board directed that the ESPP with amendments be submitted for stockholder adoption at the Annual Meeting. If this proposal to adopt the ESPP is approved by stockholders at the Annual Meeting, the ESPP, as amended and restated, will be effective as of April 1, 2023. The ESPP is intended to qualify as an “employee stock purchase plan” under Section 423 of the Internal Revenue Code (Code). The Board believes that the ESPP is a key benefit to employees and an important part of our total rewards program. It provides a convenient way for our employees to purchase shares of our common stock at a discounted price, which gives employees a vested interest in our success and aligns their interests with that of our stockholders. The closing price of NRG’s Executivecommon stock on March 6, 2023 was $34.38. HISTORY OF THE ESPP The ESPP, established July 1, 2008, is designed to attract and retain talented employees necessary for our continued growth and success. As initially established, the Board authorized, and stockholders approved, an aggregate of 500,000 shares of our common stock for issuance under such plan. In 2012, the ESPP was amended to add 1,000,000 shares. In 2014, the ESPP was amended and restated to add 800,000 more shares, modify the definition of “option price,” expand the definition of “compensation,” extend the term of the ESPP to December 31, 2023, and make other technical changes. In 2017, the ESPP was amended to add 3,000,000 shares, extend the term of the ESPP to December 31, 2026, and make other technical changes. DESCRIPTION OF THE ESPP The following provides a summary of the principal features of the ESPP. The ESPP is set forth in its entirety as Appendix A to this Proxy Statement. The following summary is qualified in its entirety by reference to Appendix A. PURPOSE The purpose of the ESPP is to increase employee alignment with stockholders by facilitating and encouraging share ownership by our eligible employees and those of our subsidiaries, and providing a mechanism to assist officers and other key employees to meet any applicable stock ownership guidelines. ELIGIBILITY Each employee of the Company or any designated subsidiary who, as of an “offering date,” has or will have at least 60 days of continuous service prior to the start of the next option period under the ESPP may become a participant in the ESPP (Participant). Participation is documented through executing and delivering a Participation Election notice to the Company prior to such offering date. Approximately 6,500 employees will be eligible for the ESPP as of March 6, 2023. No employee may participate in the ESPP if such employee, immediately after an offering date, would be deemed for purposes of Section 423(b)(3) of the Code to possess 5% or more of the total combined voting power or value of all classes of stock of the Company, its parent (if applicable) or any subsidiary.
OFFERING PERIODS There are two offering periods each year. An offering date occurs each April 1 and October 1, and commences an offering period. An option period is the six month period beginning on each offering date. The last day of an offering period (September 30 and March 31) is an exercise date on which shares of common stock are purchased for the completed offering period. ADMINISTRATION Subject to oversight by the Board, the ESPP Committee has the authority to administer the ESPP and to make and adopt rules and regulations consistent with the provisions of the ESPP and the Code and provide all notices required by the ESPP. Its interpretations and decisions with respect to the ESPP will be final and conclusive. The ESPP Committee has the authority to appoint an employee as plan manager and to delegate to the plan manager such authority with respect to the administration of the ESPP as the ESPP Committee, in its sole discretion, deems advisable from time to time. SHARES AVAILABLE UNDER THE ESPP As amended, there are 9,700,000 treasury shares reserved for the ESPP. The aggregate number of shares which may be purchased under the ESPP will not exceed the number of shares reserved for the ESPP. As of March 6, 2023, 2,806,626 shares have been issued under the ESPP, thereby leaving 6,893,374 shares available for issuance following the adoption of the ESPP by stockholders at the Annual Meeting. In the event that adjustments are made in the number of outstanding shares of our common stock or such shares are exchanged for a different class of our stock or for shares of stock of any other corporation by reason of merger, consolidation, stock dividend, stock split or otherwise, the Board must make appropriate adjustments in (a) the number and class of shares or other securities that may be reserved for purchase, or purchased, under the ESPP, and (b) the option price. All such adjustments will be made in the sole discretion of the Board, and its decisions will be binding and conclusive. ENROLLMENT AND CONTRIBUTIONS Payment for shares of our common stock purchased under the ESPP will be made by authorized payroll deductions from each payment of a Participant’s compensation in accordance with instructions received from a Participant for an option period. Deductions will be expressed as a whole number percentage which will be at least 1% but not more than 10% of eligible compensation. To the extent authorized by the ESPP Committee for any full calendar year under the ESPP (Plan Year), a Participant may authorize a deduction from his or her cash bonus compensation. During an option period, a Participant may discontinue payroll deductions but have the payroll deductions previously made during that option period remain in the Participant’s account to purchase common stock on the next exercise date, as long as he or she is an employee as of that exercise date. Any Participant who discontinues payroll deductions during an option period may again become a Participant for a subsequent option period by executing and filing another Participant Election form. PURCHASE OF SHARES As amended, the option price per share of the common stock sold to Participants under the ESPP is equal to the lesser of (a) 90% of the fair market value of a share on the offering date (first day) of an option period, and (b) 90% of the fair market value of a share on the exercise date (last day) of an option period. As long as our common stock is traded on an exchange, the fair market value equals the closing price of the common stock on such exchange. In no event can the option price per share be less than the par value of the common stock. On each exercise date, the amount in a Participant’s account will be charged with the aggregate option price of the whole number of shares of common stock which can be purchased with such amount. The balance, if any, in
such account is carried forward to the next succeeding option period, unless (i) the Participant requests that excesses be refunded, or (ii) as amended, if the Participant does not elect to make payroll deductions for the next option period, in which case the balance will be refunded. No employee will be granted an option under the ESPP if, immediately after the grant, such employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any subsidiary or parent of the Company would accrue at a rate which exceeds the lesser of: (a) $25,000 or (b) an amount equal to 10% of the employee’s annualized base salary in effect at the start of such offering period, in each case based on the fair market value of such shares (determined at the time such option is granted); provided, however, that for any Plan Year in which such option would be outstanding at any time, the employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any subsidiary or parent of the Company may not accrue at a rate which exceeds twenty-five thousand dollars ($25,000) in the aggregate (as determined at the time such option is granted). Neither we nor any subsidiary currently has any other employee stock purchase plan in place. Unless otherwise determined by the Compensation Committee, any shares purchased by a Participant are subject to a one year holding period from the date of purchase. TERMINATION OF PARTICIPATION A Participant may withdraw from the ESPP at any time by filing a notice of withdrawal prior to the close of business on an exercise date. Upon withdrawal, the entire amount, if any, that remains in the Participant’s account to purchase common stock is refunded to the Participant without interest. Any Participant who withdraws from the ESPP may again become a Participant in accordance with plan rules at the start of the next option period. If a Participant ceases to be eligible to participate in the ESPP for any reason, the amount in such Participant’s account will be refunded or distributed to the Participant, or in the case of death, the Participant’s designated beneficiary or estate, or otherwise disposed of in accordance with policies and procedures prescribed by the ESPP Committee in cases where such a refund or distribution may not be possible. NUMBER OF SHARES PURCHASED BY CERTAIN INDIVIDUALS AND GROUPS Given that the number of shares of common stock that may be purchased under the ESPP is determined by the fair market value of the common stock on the offering date or exercise date and given that participation in the ESPP is voluntary on the part of eligible employees, the actual number of shares that may be purchased by any individual is not determinable. All Participants, however, are subject to the limitations on the amount that can be invested, as set forth in the ESPP and described above. AMENDMENT AND TERMINATION The Board or the Compensation Committee may at any time, or from time to time, amend, modify, or terminate the ESPP in any respect, except that, without approval of the stockholders, no amendment may increase the aggregate number of shares reserved under the ESPP, materially increase the benefits accruing to Participants (as amended, other than the purchase price of the shares) or materially modify the requirements as to eligibility for participation in the ESPP. Any amendment of the ESPP must be made in accordance with applicable provisions of the Code and/or any regulations issued thereunder, any other applicable law or regulations, and the requirements of the principal exchange upon which the common stock is listed. Unless otherwise terminated by the Board or the Compensation Committee, the ESPP will terminate on December 31, 2026.
U.S. TAX ASPECTS Neither the grant of an option, nor the exercise of an option, under the ESPP will have any tax consequences to Participants or us under federal tax laws. Tax consequences for a Participant will not arise until the Participant disposes of the common stock acquired under the ESPP. The tax treatment on disposition of common stock will depend on whether the Participant disposes of the common stock before or after the expiration of the “statutory holding period,” i.e., the later of two years after the grant of the option or one year after the option is exercised. If the Participant disposes of common stock acquired under the ESPP after the expiration of the statutory holding period, he or she will recognize ordinary income equal to the lesser of: (a) the excess of the fair market value of the common stock on the grant date over the option price and (b) the excess of the amount realized on the disposition of common stock over the option price. Any additional gain realized from the disposition of the shares will be treated as capital gain. If the Participant disposes of the common stock acquired under the ESPP before the expiration of the statutory holding period, he or she will recognize ordinary income equal to the excess of the fair market value of the common stock on the exercise date, over the option price. Any additional gain realized from the disposition will be treated as capital gain. We will be entitled to a deduction equal to the amount of ordinary income recognized by the Participant in the event of a disposition before the expiration of the statutory holding period. SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS
AS OF DECEMBER 31, 2022 | | Plan Category | | | | (a)
Number of
Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights | | | | (b)
Weighted-Average
Exercise
Price of Outstanding
Options,
Warrants and
Rights | | | | (c)
Number of Securities
Remaining Available
for Future Issuance
Under Equity Compensation
Plans (ExcludingSecurities
Reflectedin Column (a) | | | | Equity compensation plans approved by security holders | | | | 2,865,336(1) | | | | $ — | | | | 10,673,145(2) | |
| | (1) | | | Consists of shares issuable under the NRG LTIP and the ESPP. The NRG LTIP became effective upon the Company’s emergence from bankruptcy. On April 27, 2017, the NRG LTIP was amended and restated to increase the number of shares available for issuance to 25,000,000. The ESPP, as amended and restated, was approved by the Company’s stockholders on April 27, 2017, and became effective April 28, 2017. As of December 31, 2022, there were 2,493,374 shares reserved from the Company’s treasury shares for the ESPP. | | | | (2) | | | Consists of 8,179,771 shares of common stock under NRG’s LTIP and 2,493,374 shares of treasury stock reserved for issuance under
the ESPP. | |
| | The Board recommends, on the advice of the Compensation Committee, a vote “FOR” the adoption of the NRG Energy, Inc. Amended and Restated Employee Stock Purchase Plan. Proxies received by the Board will be voted “FOR” the adoption unless a contrary vote is specified. | |
PROPOSAL NO. 3 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 (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. TheSubject to the results of the Say on Frequency Proposal, the next vote will occur at the 20212024 Annual Meeting of Stockholders.
As described more fully in the CD&A beginning on page 39,57, 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-termlong- 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.
| The Board recommends a vote “FOR” the approval of the Company’s executive
compensation as disclosed in this Proxy Statement. Proxies received by the Board
will be voted “FOR” the approval of the Company’s named executive officer
compensation unless a contrary vote is specified. | |
PROPOSAL NO. 4 ADVISORY VOTE ON FREQUENCY OF ADVISORY VOTE ON EXECUTIVE COMPENSATION As described in Proposal No. 3, Ratification the Company’s stockholders are provided the opportunity to cast an advisory vote to approve the compensation of Independent Registered Public Accounting Firmthe Company’s named executive officers, that is, the “say on pay” vote. Section 14A of the Exchange Act also affords stockholders the opportunity to cast an advisory vote on how often the Company should include the say on pay vote in its proxy materials for future annual stockholder meetings (or other meetings of stockholders at which directors will be elected). Under this Proposal No. 4, stockholders may vote to have the say on pay vote every one year, two years, or three years, or abstain from the vote. At the Company’s 2017 Annual Meeting of Stockholders, the stockholders voted to have the say on pay vote annually.
Although the vote is non-binding, the Board and the Compensation Committee value the opinions of the stockholders and will consider the outcome of the vote when determining the frequency of the say on pay vote. The Board has determined that an annual say on pay vote is the best approach for the 2020 Fiscal YearCompany and its stockholders because the Board believes that a one-year frequency provides the highest level of accountability and communication by and between the Board and the stockholders. An annual say on pay vote enables stockholders to approve the compensation of the named executive officers with the most recent executive compensation information presented in the Proxy Statement for the annual meeting of stockholders. In addition, the Board recognizes the importance of receiving regular, direct input from stockholders on important issues such as the Company’s compensation philosophy, policies and practices as disclosed in the Proxy Statement every year. An annual vote is consistent with Company policies of annually seeking input from, and engaging in discussions with, the stockholders on corporate governance matters and executive compensation philosophy, policies and practices. For the reasons stated above, the Board recommends a vote for a “one year” frequency for the say on pay vote. Please note that stockholders are not voting to approve or disapprove the best approach determined by the Board with respect to this proposal. Rather, stockholders may cast their vote on their preferred voting frequency by choosing the option of one year, two years, or three years, or by abstaining from the vote. Because this is only an advisory vote, the Board may decide that it is in the best interests of the stockholders and the Company to hold the say on pay vote more or less frequently than the option selected by the stockholders. | | The Board recommends a vote for the frequency of “ONE YEAR” for the advisory vote on executive compensation. Proxies received by the Board will be voted for the frequency of “ONE YEAR” unless a contrary vote is specified. | |
PROPOSAL NO. 5 RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE 2023 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 20202023 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 20202023 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.
| The Board recommends a vote “FOR” the ratification of the appointment of
KPMG LLP
as the Company’s independent registered public accounting firm for the 20202023 fiscal year.
Proxies received by the Board will be voted “FOR”
ratification unless a contrary
vote is specified. | |
Our executive officers are elected by the Board annually to hold office until their successors are elected and qualified. The requiredbiographical information by this sectionfor each of the executive officers is incorporated by referenceprovided below. Mauricio Gutierrez Age 52
President and Chief Executive Officer For biographical information for Mauricio Gutierrez, see “Nominations for Director.” Alberto Fornaro Age 58
Executive Vice President and Chief Financial Officer Mr. Fornaro has served as our Executive Vice President and Chief Financial Officer since June 2021. Before joining us, he was Chief Financial Officer of Coupang, Inc. (Coupang) from February 2020 to December 2020 and had served as a Senior Advisor to Coupang from December 2020 to May 2021. Prior to that, he served in various positions at International Gaming Technology plc (IGT) from 2011 to January 2020, where he had most recently served as Executive Vice President and Chief Financial Officer since 2013. Before IGT, Mr. Fornaro was Group CFO and President of the Europe, Middle East, and Africa division at Doosan Infracore Construction Equipment. Mr. Fornaro also served as General Manager and CFO of Technogym and spent 12 years in finance at CNH Global/Fiat Group in Italy and in the United States. Bruce Chung Age 49
Executive Vice President, Strategy, M&A and NRG Services Mr. Chung has served as our Executive Vice President, Strategy, M&A, and NRG Services since July 2022. Prior to his service as Executive Vice President, Mr. Chung 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 45
Executive Vice President, Legal and General Counsel Mr. Curci has served as our Executive Vice President, General Counsel since March 2021. He also 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 49
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, Director of NYMEX Trading, Assistant to the similarly named sectionChief Operating Officer and NYMEX natural gas trader. Mr. Gaudette serves on the advisory board of NRG’s Form 10-KShift, an early stage company that provides a platform advising veterans on job prospects and linking them to opportunities. Elizabeth Killinger Age 53
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. Christopher Moser Age 52
Head of Competitive Markets and Policy Mr. Moser has served as our Head of Competitive Markets and Policy since March 2022. Mr. Moser served as our Executive Vice President, Operations from January 2018 to March 2022. He previously served as Senior Vice President, Operations of NRG, with responsibility for Plant Operations, Commercial Operations, Business Operations and Engineering and Construction, beginning in March 2016. From June 2010 to March 2016, Mr. Moser served as Senior Vice President, Commercial Operations. In this capacity, he was responsible for the fiscal year endedoptimization of our wholesale generation fleet. Mr. Moser serves on the board of trustees of the Princeton- Blairstown Center, a New Jersey non-profit that provides adventure-based, experiential education to historically marginalized youth. Emily Picarello Age 42
Corporate Controller Ms. Picarello has served as our Principal Accounting Officer since February 2022. Ms. Picarello joined the Company in December 31, 2019.Stock Ownership of Directors, Named Executive Officers and Certain Beneficial Owners
|
2018 and served as Assistant Controller for the Company through November 2021, when she was promoted to Vice President and Corporate Controller. Prior to her employment with the Company, Ms. Picarello spent over seven years with PVH Corp., a global apparel company, first as the Director of Financial Reporting and then as the Vice President, Financial Reporting. Prior to Ms. Picarello’s time with PVH Corp., she was an auditor with KPMG LLP for over eight years, holding various positions including Audit Senior Manager. Ms. Picarello is a certified public accountant.
Stock Ownership of Directors, Named Executive Officers and Certain Beneficial Owners STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS The following table sets forth information concerning beneficial ownership of the Company’s common stock as of March 2, 2020,6, 2023, for: (a) each director and the nominees for director; (b) named executive officers (NEOs) who are current officers as of March 2, 2020;; and (c) theall current directors and executive officers as a group. The percentage of beneficial ownership is based on 250,541,807232,269,883 shares of common stock outstanding as of March 2, 2020.6, 2023. The percentage of beneficial ownership also includes any shares that such person has the right to acquire within 60 days of March 2, 2020.6, 2023. Unless otherwise indicated, each person has sole voting and dispositive power with respect to the shares set forth in the following table.Except as noted below, the
The address of the beneficial ownersdirectors and executive officers is c/o NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540.
| Directors and
Executive Officers | Common
Stock(1)
| | | Common Stock(1) | | | | Percent of
Class
(%) | | | Mauricio Gutierrez | 796,898
| | | 1,023,752 | | | | *(2) | | Kirkland Andrews
| 236,422
Alberto Fornaro | | | | 6,786 | | | | *(3) | | | Elizabeth Killinger | 113,086
| | | 91,976 | | | | *(4) | | Christopher Moser
| 95,181
Brian Curci | | | | 41,443 | | | | *(5) | | Brian Curci
| 15,693
Christopher Moser | | | | 147,201 | | | | *(6) | | | Lawrence S. Coben | 106,374
| | | 151,180 | | | | *(7) | | | E. Spencer Abraham | 50,189
| | | 70,593 | | | | *(8) | | | Antonio Carrillo | 4,278
| | | 27,497 | | | | *(9) | | | Matthew Carter, Jr. | 14,142
| | | 30,388 | | | | *(10) | | | Heather Cox | 14,054
| | | 31,066 | | | | *(11) | | Terry G. Dallas
| 27,678
Elisabeth B. Donohue | | | | 17,890 | | | | *(12) | | | Paul W. Hobby | 71,495
| | | 89,320 | | | | * | | | Alexandra Pruner | 4,299
| | | 19,726 | | | | *(13) | | | Anne C. Schaumburg | 73,150
| | | 93,275 | | | | *(14) | | | Thomas H. Weidemeyer | 73,998
| | | 88,323 | | | | *(15) | | | All Directors and Executive Officers as a group (17(18 people) | 1,760,403
| | | 1,998,026 | | | | *(16) | |
| * | | | Less than one percent of outstanding common stock. | | | | (1) | | | The number of shares beneficially owned by each person or entity is determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, each person or entity is considered the beneficial owner of any: (a) shares to which such person or entity has sole or shared voting power or dispositive power and (b) shares that such person or entity has the right to acquire within 60 days through the exercise of stock options or similar rights. | | | | (2) | | | Excludes 100,250187,117 RSUs, 262,409392,156 relative performance stock units (RPSUs) and 4,12819,401 DERs. DERs become exercisable proportionately with the RSUs or RPSUs to which they relate. Each DER is the right to receive one share of NRG common stock and becomes exercisable proportionately with the RSUs or RPSUs to which they relate. Each RSU represents the right to receive one share of NRG common stock upon vesting. Each RPSU represents the potential to receive common stock based upon NRG achieving a certain level of total shareholder return relative to NRG’s peer group over a three-year performance period. | | | | (3) | | | Excludes 25,23442,861 RSUs, 66,43384,058 RPSUs and 1,0473,860 DERs. | | | | (4)Includes 4,278 shares that may be acquired at or within 60 days of March 2, 2020, pursuant to the exercise of options. | | | Excludes 19,96833,560 RSUs, 52,48271,046 RPSUs and 8263,571 DERs. | | | | (5) | | | Excludes 19,92528,082 RSUs, 52,27256,732 RPSUs and 8232,601 DERs. | | | | (6) | | | Excludes 9,96119,313 RSUs, 24,29647,499 RPSUs and 3763,159 DERs. | | | | (7) | | | Includes 101,491123,298 DSUs and 2,43410,496 DERs, payable in the event Dr. Coben ceases to be a member of the Board. | | | | (8) | | | Includes 41,63456,179 DSUs and 1,8727,729 DERs, payable in the event Secretary Abraham ceases to be a member of the Board. | | | | (9) | | | Includes 4,241 DSUs and 37517 DERs, payable in the event Mr. Carrillo ceases to be a member of the Board. | | | | (10) | | | Includes 13,97527,714 DSUs and 1702,675 DERs, payable in the event Mr. Carter ceases to be a member of the Board. | | | | (11) | | | Includes 4,90618,865 DSUs and 471,528 DERs, payable in the event Ms. Cox ceases to be a member of the Board. | | | | (12) | | | Includes 2,691 DERs. Includes 25,00414,452 DSUs and 938 DERs, payable in the event Mr. DallasMs. Donohue ceases to be a member of the Board. Also includes 14,282 shares held indirectly in trusts. Excludes 24,783 DSUs issued to Mr. Dallas that will be exchanged for common stock on a one-for-one basis on the following schedule: (a) 6,196 on January 15, 2021; (b) 6,195 on January 15, 2022; (c) 6,196 on January 15, 2023; and (d) 6,196 on January 15, 2024. | | | | (13) | | | Includes 4,24118,200 DSUs and 371,442 DERs, payable in the event Ms. Pruner ceases to be a member of the Board. | | | | (14) | | | Includes 60,98876,139 DSUs and 1,7716,801 DERs, payable in the event Ms. Schaumburg ceases to be a member of the Board. | | | | (15) | | | Includes 34,876 DSUs, payable in the event Mr. Weidemeyer ceases to be a member of the Board. | | | | (16) | | | Consists of the total holdings of directors, named executive officers,NEOs, and all other executive officers as a group. | |
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 250,541,807232,269,883 shares of common stock outstanding as of March 2, 2020.6, 2023. Unless otherwise indicated, each person has sole investment and voting power with respect to the shares set forth in the following table.
| Principal Stockholder | Common
Stock
| | | Common Stock | | | | Percent of Class
(%) | |
| | | The Vanguard Group, Inc.
100 Vanguard Blvd.
Malvern, Pennsylvania 19355 | 30,429,027
| 12.15
| | 31,554,624 | | | | 13.59(1) | |
| | | BlackRock, Inc.
55 East 52nd Street
New York, New York 10022 | 19,601,218
| 7.82
| | 29,675,659 | | | | 12.78(2) | |
| | | State Street Corporation
State Street Financial Center
One Lincoln Street
Boston, Massachusetts 02111
| 12,807,587
| 5.11
| | 14,686,233 | | | | 6.32(3) | | | Putnam Investments, LLC
100 Federal Street
Boston, Massachusetts 02110 | | | | 12,579,571 | | | | 5.42(4) | |
| | (1) | | | Based upon information set forth in the Schedule 13G filed on February 11, 20209, 2023 by The Vanguard Group, Inc. (Vanguard), Vanguard has sole voting power over 380,387 shares and sole dispositive power over 30,005,61730,580,683 shares. Vanguard has shared voting power over 74,480311,967 shares and shared dispositive power over 423,410973,941 shares. Vanguard Fiduciary Trust Company (VFTC), a wholly-owned subsidiary of Vanguard, is | | | | (2) | | | Based upon information set forth in the beneficial owner of 284,928Schedule 13G filed on January 23, 2023 by Blackrock, Inc. Blackrock, Inc. has sole voting power over 28,120,392 shares as a result of VFTC serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. (VIA), a wholly-owned subsidiary of Vanguard, is the beneficial owner of 230,361 shares as a result of VIA serving as investment manager of Australian investment offerings.(2)and sole dispositive power over 29,675,659 shares.
| | | | (3) | | | Based upon information set forth in the Schedule 13G filed on February 10, 20203, 2023 by Blackrock, Inc., Blackrock, Inc.State Street Corporation. State Street Corporation has soleshared voting power over 16,735,39213,603,494 shares and soleshared dispositive power over 19,601,21814,683,342 shares.(3)
| | | | (4) | | | Based upon information set forth in the Schedule 13G filed on February 14, 20202023 by State Street Corporation, State Street CorporationPutnam Investments, LLC (Putnam). Putnam has sharedsole voting power over 11,449,2143,709,948 shares and sharedsole dispositive power over 12,803,94912,579,571 shares. | |
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.
•
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 firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
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.
COMPENSATION DISCUSSION AND ANALYSIS
EXECUTIVE SUMMARY The objectives of our executive compensation program are to align executive pay with stockholder value and to motivate executives to achieve our corporate goals. This CD&A describes the elements, implementation, and 20192022 results of our executive compensation program.
At our 20192022 Annual Meeting of Stockholders, we received 98%97% 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 plans are designed to recognizeprogram, policies, and practices align with this commitment. Our Board and Compensation Committee consider the performanceresults of the Company. say on pay proposal each year in informing annual compensation decisions. In 2019,2022, we made significant strides in our evolution as a consumer services company. In December 2022, we announced entry into an agreement to acquire Vivint Smart Home, Inc. (Vivint), a transaction that we believe will accelerate the realization of our consumer-focused growth strategy. Through this acquisition, which closed on March 10, 2023, the combined company is expected to be the leading essential home solutions provider with an extensive network of approximately 7.4 million customers across North America. We expect the integration of Vivint’s operations to strengthen our core platform and diversify our financial profile with more predictable earnings through Vivint’s subscription-based model and long customer tenure of nine years. Following the acquisition, the combined company has approximately 18,000 employees, including Vivint’s seasonal direct sales and installation force. While continuing to execute on our disciplined capital allocation plan, we also produced the following results in line with our business strategy:·Delivered onstrategy in 2022:
•
Continued to optimize our financialportfolio with the planned retirement of Astoria and operational objectives, including achievingrelated land sale, and the disposition of the Watson generating facility. •
Realized $259 million of synergies from the Direct Energy acquisition, equivalent to 86% of our targeted goal of $300 million by the end of 2023. •
Maintained top decile safety performance inand increased performance against our industry·Executed on our previously announced Transformation Plan objectives realizing annual cost savings of $590 million, margin enhancements of $135 million, and $370 million of non-recurring working capital improvements
·Continued to perfect our customer-focused model by executing on our capital-light asset strategy with the execution of 1.6 gigawatts of solar power purchase agreements in ERCOT and expansion of our retail business through the acquisition of Stream Energy
·Adhered to our disciplined capital allocation strategy by:
oAchieving investment grade credit metrics, thereby exceeding our target of reducing consolidated corporate debt to 2.75x net debt/adjusted EBITDA; and
oCompleting $1.44 billion of share repurchases.
Consistent with the objectives of our compensation program, the accomplishment of these corporate goals and the market performance of our common stock over the three-year performance period directly impacted our compensation decisions and pay outcomes for 2019 pursuant to our annual incentive plan (AIP) as described in more detail in the section of this CD&A entitled “Annual Incentive Compensation” and our long-term incentive plan (LTIP), as described in more detail in the section of this CD&A entitled “Long-Term Incentive Compensation.”
EKPIs.
Based on
| Despite the achievement ofabove accomplishments, our AIPshareholder return performance metrics during 2019, our NEOs
received annual incentive payments at levels modestly greater than target. |
Our Adjusted EBITDA and Adjusted Free Cash Flow achievements fell just below target at approximately 96% and 95%, respectively, however, our Corporate Debt to Corporate EBITDA Ratio exceeded the maximum resulting in achievement of that metric at 200%. Based on the achievement of the Corporate Debt to Corporate EBITDA Ratio and weighting approved by our Compensation Committee, the Company achieved 124.5% of target on a combined basis and our NEOs received AIP awards commensurate with this performance.
Due to the increasewas disappointing in TSR of approximately 222%,2022; thus, our NEOs received
a zero payout at 200%on January 2, 2023, as a result of target upon the vestingdecrease of their RPSU awards.
the Company’s TSR relative to our performance peer group over the three-year period. | |
Our compensation program ties a significant portion of our NEOs’ overall compensation to the achievement of increases in TSR through our long-term compensation program. Consistent with market practice, in 2017, we shifted performance-based equity from MSU awards to RPSU awards. As such, NEOs receivedreceive two-thirds of their equity awards in RPSUs in lieu of MSUs.RPSUs. The quantity of shares received by NEOs upon the vesting of an RPSU award is a function of the Company’s TSR performance ranked againstrelative to our performance peer group over a three year-period. The most recent three-year cycle ended January 2, 2023 (based on a common stock price as of December 31, 2022) and the Performance Peer GroupCompany’s TSR (as definedcalculated in “Elements of Compensation – Relative Performance Stock Units”). The Compensation Committee evaluated this comparator group for an appropriate mix of industry-specific and market-influenced constituents when determining awards. In addition, RPSU awards granted in 2018, 2019 and 2020 were updated to limitaccordance with the maximum award value that an NEO may receive to six times the fair market valueterms of the target award, determined as of the date of grant.outstanding RPSUs) decreased by 6.57%. As a result, of the 222% increaseRPSU awards scheduled to vest on January 2, 2023, were forfeited. The decrease in TSR overat the three-year performance period ending January 3, 2020 (vesting January 3, 2020), RPSU awards vesting asend of such date vested at 200%2022 followed the announcement of target.
Our NEOs received base salary increases for 2019, consistent with industry trends
and to remain competitive.
|
TheNRG’s acquisition of Vivint. While the Compensation Committee believesacknowledged that, the increasesprior to the base salariesannouncement, the RPSUs were projected to vest at 112% of target, it did not make any adjustments, thereby allowing the compensation program to function as envisioned.
| | In line with the Compensation Committee’s commitment to align pay with performance, the total annual incentive achievement for 2022 resulted in a below-target payout at 53% of target as a result of lower 2022 results. | |
As described in this CD&A, awards under our Annual Incentive Plan (AIP) are based on certain Company performance metrics, the results of which are reviewed and applied to the AIP awards given to the NEOs. For 2022, the Adjusted EBITDA achievement was below target at 86%, the Adjusted Free Cash Flow and Credit Ratio both failed to achieve threshold performance and were therefore at 0%, and the ESG achievement was above target at 156%. Based on these results and the weighting approved by our Compensation Committee, the Company achieved an overall performance of 53% of target. As a result, our NEOs were consistentreceived AIP awards at 53% of target, commensurate with the industry trend and important to maintain market competitiveness. For 2019, our NEOs, other than Mr. Gutierrez, received increases to their base salaries ranging from 2.25% to 3.19%. In addition, after a review of compensation benchmark data provided by Pay Governance as well as Mr. Gutierrez’sCompany performance as CEO, Mr. Gutierrez received a base salary increase of 5.69%.for 2022.
KEY GOVERNANCE FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAMOver the past several years, we have modified our
Our compensation programsprogram, policies and practices to incorporate several key governance features, adhering toaligning with the following compensation best practices described in the table below.2022: ü
| ✓What We Do: | | | | û✓
Pay for performance, including: ◦
Providing for a large portion of NEO compensation that is variable and at risk, ◦
Delivery of a substantial majority of long-term incentive compensation using performance-based equity and ◦
Requiring above-median performance for vesting of long-term incentive compensation awards at target
| | | | ✓
Require a double trigger for the payment of cash severance and the vesting of equity upon a change-in-control | | | | ✓
Include clawback policies in our compensation plans | | | | ✓
Maintain robust stock ownership guidelines for our NEOs | | | | ✓
Provide market-level retirement benefits | | | | ✓
Denominate and settle all long-term incentive awards in equity | | | | ✓
Engage an independent compensation consultant to advise us on matters surrounding our compensation plans and settle all long-term incentive awards in equity | | | | ✓
Ensure our compensation practices do not encourage undue risk taking (e.g., engage in robust risk monitoring and limiting payments made under our AIP and performance equity program) | | | | ✓
Engage in a comprehensive performance evaluation process for all NEOs and annual management succession and leadership development efforts | | | | ✓
Hold an annual say on pay vote | | | | ✓
Conduct a gender and race pay equity survey at least every three years | |
| | ×What We Don’t Do: | | | | | | üPay for performance, including:
| | û×
No excise tax gross-ups upon a change-in-control and no tax gross-ups on perquisites or benefits
| | | | | | odeliver a majority of long-term incentive compensation using performance-based equity
| | û×
No pledging or hedging of the Company’s stock by NEOs or directors
| | | | | | oRequire above-median performance for vesting of long-term incentive compensation awards at target and
| | û×
No employment agreements for executive officers with the exception of our CEO
| | | | | | ouse quantitative metrics to determine the funding of our annual incentive compensation awards
| | û×
No guaranteed bonus payments for our NEOs
| | | | ×
No guaranteed salary increases for NEOs | | üTarget our peer group median for total direct compensation
| | û×
No supplemental executive retirement plans
| | | | | | üRequire a double trigger for the vesting of equity upon a change-in-control
| | û×
No re-pricing of underwater stock options and no grants below 100% of fair market value
| | | | ×
No loans to executives for purchases of Company securities on margin | | üInclude clawback policies in our compensation plans
| ×
No backdating or repricing of stock options | | | | ×
No dividend equivalent rights on unearned equity awards | | üMaintain robust
| ×
No trades of our stock ownership guidelines forby our NEOsofficers and directors without preclearance | | | | | ×
No excessive perquisites | | üProvide market-level retirement benefits and limited perquisites
| | | | | | üDenominate and settle all long-term incentive awards in equity
| | | | | | üEngage an independent compensation consultant to advise us on matters surrounding our compensation plans
| | | | | | üPrevent undue risk taking in our compensation practices (e.g., engage in robust risk monitoring, cap payments made under our annual incentive plan and performance equity program)
| | | | | | üHold an annual say-on-pay vote
| | |
EXECUTIVE COMPENSATION PROGRAM 2022 NAMED EXECUTIVE OFFICERS
This CD&A describes our executive compensation program for our NEOs in 2019.2022. For 2019,2022, the NEOs were:were as follows:NEO
| 2019 NEO
| | | | Title | | | Mauricio Gutierrez | | | | President and Chief Executive Officer | | Kirkland Andrews
| Alberto Fornaro | | | | Executive Vice President and Chief Financial Officer | | Elizabeth Killinger
| Brian Curci | | | | Executive Vice President, RetailLegal and General Counsel | | Christopher Moser
| Elizabeth Killinger | | | | Executive Vice President, OperationsNRG Home | | Brian Curci
| Senior Vice PresidentChristopher Moser
| | | | Head of Competitive Markets and General CounselPolicy | |
GOALS AND OBJECTIVES OF THE PROGRAM
Our Compensation Committee designs and implements an executive compensation program that:·that is intended to:
•
closely alignsalign our executive compensation with stockholder value creation, avoiding plans that encourage executives to take excessive risk, while driving long-term value to stockholders;·supports the Company’srisk;
•
support our long-term business strategy, while rewarding our executive team for their contributions to Company results and their individual accomplishments; ·allows
•
allow us to recruit and retain a top-tier executive team in a competitive industry and to motivate our executive team to achieve superior performance for aover sustained period; and·provides aperiods;
•
provide competitive compensation opportunityopportunities while adhering to market standards for compensation.The Compensation Committee is responsible for the developmentcompensation; and implementation of
•
complement and advance NRG’s executive compensation program. The intentpower values, which are an integral part of our executive compensation program is to reward the achievement of NRG’s annual goalscompany culture and objectivesinclude safety and the creation of long-term stockholder value.well-being, customer-focus, collaboration, accountability, and diversity, equity and inclusion (Power Values). The Compensation Committee is committed to aligning executives’ compensation with performance. The Compensation Committee’s objectives are achieved through the use of both short-term and long-term incentives. The Company currently targetsFor 2022, pay for our NEOs was targeted at the median of our Compensation Peer Group, as described below.the market. In addition, through the AIP, theour NEOs are rewarded for achieving annual corporate and individual goals. Our long-term incentive compensation program is designed to reward our NEOs for long-term TSR.The Compensation ProcessTSR outperformance.
THE COMPENSATION PROCESS Pursuant to its charter, the Compensation Committee is authorized to engage, at the expense of the Company, a compensation consultant to provide independent advice, support, and expertise to assist the Compensation Committee in overseeing and reviewing our overall executive compensation strategy, structure, policies and programs, and to assess whether our compensation structure establishes appropriate incentives for management and other key employees.
Pay Governance, the Compensation Committee’s independent compensation consultant since fiscal year 2015, assistedassists with executive and director pay assessments and workedworks with the Compensation Committee to review the design of the executive compensation program for 2019.program. Pay Governance reportedreports directly to the Compensation Committee and providedprovides no other remunerated services to the Company. Pay Governance does not provide services forto any of our affiliates. In accordance with SEC rules and requirements, the Company has affirmatively determined that no conflicts of interest exist between the Company and Pay Governance (or any individuals working on the Company’s account on behalf of Pay Governance). SURVEY ANALYSIS FOR EXECUTIVE COMPENSATION PEER GROUP ANALYSISThe
Given the consolidation within the deregulated power industry, as well as NRG’s asset-light, consumer-driven business strategy, the Compensation Committee, with supportguidance from its advisors, identifiesPay Governance, reviews size-adjusted compensation survey data for the best possible comparator group within relevant industries. Thethree major industry sectors in which the Company competes for talent: energy industry, consumer products industry and general industry. ELEMENTS OF COMPENSATION Our Compensation Committee performedconsiders a reviewvariety of potential peer companies, considering factors such as industry, scopecomponents in its evaluation of operations, market value and relevance from a talent competition standpoint. In addition, a peer of peer analysis was conducted to confirm the appropriateness of potential peer companies and to assess companies that NRG’s peers use in their own peer groups. The Compensation Committee then considered the overall reasonableness of the list of potential peer companies as a whole.The Compensation Committee aims to compare our executive compensation program to a consistent compensation peer group year-to-year. Given the dynamic nature of our industry and the companies that comprise it, we annually examine the list for opportunities for improvement. While a number of potential new peer companies were considered, there were no changes to the peer group for 2019. The Compensation Peer Group for 2019 is identified below.
Company
| NYSE
Ticker
| Company
| NYSE
Ticker
| The AES Corporation
| AES
| Public Service Enterprise Group
| PEG
| Calpine Corporation
| —(1)
| UGI Corporation
| UGI
| Exelon Corporation
| EXC
| Vistra Energy Corp.
| VST
| Centrica plc
| CNA (2)
| | | (1)Calpine Corporation was not an NYSE listed company in 2019; however, compensation information for comparative purposes continued to be available.
(2)Listed on the London Stock Exchange.
| | | | | |
We use the median percentile of our Compensation Peer Group as a guidepost in establishing the targeted total direct compensation (base salary, annual cash incentive and equity) levels for our NEOs. We expect that, over time, targeted total direct compensation of our NEOs will continue to land near the median of our Compensation Peer Group, and actual pay in a given year will increase or decrease based on the achievement of defined performance-based compensation metrics.
packages. While a portion of our compensation is fixed, a significant percentage is risk-based and payable and/or realizable only if certain performancemilestones or objectives are met. The following charts illustrate the breakdown of our NEOs’ target percentage of annual fixed compensation time-based compensationopportunities, namely Mr. Gutierrez (our CEO), Mr. Fornaro (our CFO) and performance-based compensation payable to our CEO, CFOMr. Curci, Ms. Killinger and other NEOs on an average basis. Mr. Moser. ![[MISSING IMAGE: pc_enviro-4c.jpg]](/files/DEF 14A/0001104659-23-032997/pc_enviro-4c.jpg) | | (1) | | | Reflects target opportunity under our AIP and the grant-date value of RSUs and RPSUs, as applicable. | |
Base salary compensates NEOs for their level of experience and expertise, for the responsibilities of their individual position responsibilities and for the continued expectation of superior performance. Recommendations on increases to base salary take into account, among other factors, prevailing market data for the position as provided by Pay Governance, the NEO’s individual performance, the general contributions of the NEO to overall corporate performance, and the level of responsibility of the NEO with respect to his or her specific position. 
In 2019,2022, consistent with the industry trend and in order to maintain market competitiveness, the CEO recommended (except for himself), and the Compensation Committee approved, modest increases to base salaries of 3% for NEOs, exceptMr. Curci and Ms. Killinger, while Mr. Fornaro’s salary increase was less than 2%, as described below. Mr. Moser’s salary was adjusted as a result of his transition to a newly created leadership role as Head of Competitive Markets and Policy. The increase of 3% to the CEO, ranging from 2.25% to 3.19%. The Compensation Committee also evaluated the levelbase salary of Mr. Gutierrez’s base salary and total compensationGutierrez was approved by comparing it to compensation benchmark data provided by Pay Governance. Following such evaluation, considering such competitive factors and performance, including that his base salary was not increased in 2018,the Board based on the recommendation of the Compensation Committee approved a 5.69% increase to Mr. Gutierrez’s base salary for 2019. Committee. For 2019,2022, the base salary for each NEO was as follows: Named Executive Officer | 2019 Annualized
Base Salary ($)(1) | Percentage increase
over 2018 (%)(2) | Mauricio Gutierrez | 1,300,000 | 5.69 | Kirkland Andrews | 690,683 | 2.25 | Elizabeth Killinger | 547,549 | 3.19 | Christopher Moser | 547,549 | 2.25 | Brian Curci | 460,125 | 2.25 | (1) Actual salary earned for 2019 is set forth in the Summary Compensation Table, below. (2) As compared to the December 31, 2018 annualized base salary. |
| | Name | | | | Base Salary as of
December 31, 2022
($)(1) | | | | Percentage increase
over 2021
(%)(2) | | | | Mauricio Gutierrez | | | | 1,406,753 | | | | 3.00 | | | | Alberto Fornaro(3) | | | | 737,760 | | | | 1.76 | | | | Brian Curci | | | | 515,000 | | | | 3.00 | | | | Elizabeth Killinger | | | | 592,513 | | | | 3.00 | | | | Christopher Moser(4) | | | | 400,000 | | | | N/A | |
| | (1) | | | Actual salary earned in 2022 is set forth in the Summary Compensation Table below. | | | | (2) | | | As compared to the December 31, 2021 annual base salary. | | | | (3) | | | Mr. Fornaro was appointed to serve as Executive Vice President and Chief Financial Officer effective June 1, 2021. | | | | (4) | | | Mr. Moser transferred to a newly created leadership role as Head of Competitive Markets and Policy effective in August 2022. | |
ANNUAL INCENTIVE COMPENSATION
Annual incentiveperformance-based compensation awards (AIP awards) are made under our AIP. AIP awards are short-term compensation designed to compensatereward NEOs for meeting annual individual goals and Company goals, both financial and non-financial.non-financial goals. The annual incentive compensation opportunity is defined as a percentage of each NEO’s annual base salary. This year, AIP awards are subject to certain requirements, includingwere based on the results of the achievement of the Company’s AIP performance metrics, rather than a combination of a threshold Adjusted Free Cash Flow performance metric (AIP Gate). For 2019,and the Company’s AIP Gate was $983 million, a level the Compensation Committee believes was appropriate for a minimally acceptable level of financial performance. If the AIP Gate is not achieved, no AIP awards are paid, regardless of performance in any other metrics. For 2019, the Compensation Committee set the following financial performance metric levels:
Performance Metric ($ in millions) | Threshold | Target | Maximum | Adjusted Free Cash Flow | $983 | $1,340 | $1,675 | Adjusted EBITDA | $1,403 | $2,005 | $2,208 | Corporate Debt to Corporate EBITDA Ratio | 3.0x | 2.75x | 2.50x |
In addition, each NEO is evaluated on his or her achievement of individual performance criteria, which include measures that NRG values in the leadership of the business. Such measures include fostering safety; working collaboratively across the organization; expanding the retail operations and reshaping the generation portfolio; advancing NRG’s digital transformation; and delivering on operational and financial goals. Additional criteria may be chosen, as appropriate, and may change from time to time. The Compensation Committee assesses performance of each NEO relative to the performance criteria applicable to each NEO and adjusts the total AIP award for each NEO by a factor of plus or minus 20%, based on recommendations from the CEO for each NEO other than himself. The Compensation Committee retains sole discretion under the AIP to reduce the amount of, or eliminate any, AIP awards that are otherwise payable under the AIP.
AIP AWARD OPPORTUNITY
TABLE OF CONTENTSThe target AIP award opportunities for the NEOs for 2019, expressed as a percentage of base salary, are set forth in the table below. Actual AIP payouts can range from fifty percent (50%) of the target percentage to two hundred percent (200%) of the target percentage, which reflects the threshold and maximum AIP award opportunities, respectively. No AIP award is provided if performance falls below the threshold levels established.
Named Executive Officer | Target (% of Salary) (1) | Target AIP Award
Amount ($) | Mauricio Gutierrez | 125 | 1,625,000 | Kirkland Andrews | 100 | 690,683 | Elizabeth Killinger | 75 | 410,662 | Christopher Moser | 75 | 410,662 | Brian Curci | 50 | 230,062 | (1) This assumes that each of the financial performance metrics and all quantitative and qualitative goals are achieved at target levels. |
2019
2022 AIP AWARD PERFORMANCE CRITERIA
The quantitative AIP award performance criteria applicable to all NEOs areis based upon our 20192022 corporate business strategy and individual performance.contributions. The table below sets forth the 20192022 AIP performance criteria and weightingweightings applicable to all NEOs.
Goal
| Goal | | | | Weight | | Adjusted EBITDA (1)(2)
| 35%
| Adjusted Free Cash Flow (before growth)(1)(3) (2) | | | | 35% | | Corporate Net Debt to Corporate
| Adjusted EBITDA Ratio (4)(1)(3) | 30%
| | | 35% | | Overall Funding
| 100%
Credit Ratio(4) | | | | 15% | | | ESG(5) | | | | 15% | | | | Overall Funding | | | | 100% | | | | Individual Performance Criteria Modifier | ±20%
| | | Multiply by up to ±20% | |
| (1) | | | Our Consolidated Statement of Operations and Consolidated Statement of Cash Flows are found in Item 15 — Exhibits, Financial Statement Schedules to our Annual Report on Form 10-K. | | | | (2) | | | Adjusted Free Cash Flow (before growth) includes Cash Flow Provided by Operating Activities (less maintenance capex, environmental capex, net of funding and insurance reimbursements for property damage and operating expenses, dividends from preferred instruments treated as debt by rating agencies, and distributions to non-controlling interests), adjusted gain/losses and other impacts associated with unbudgeted acquisition or sale of operating assets, net emissions proceeds/purchases, and maintenance and environmental capex adjusted for major changes in timing of maintenance and environmental capex projects. Adjusted Free Cash Flow (before growth) excludes changes in nuclear decommissioning trust liability, growth investments, net receipts from settlement of acquired derivatives that include financing elements, changes in collateral, acquisition and divestiture transaction and integration costs, and impacts of certain major transactions approved by the Compensation Committee. This amount is further adjusted for the impact associated with special one-time, non-recurring unusual events approved by the Compensation Committee. | | | | (3) | | | Adjusted EBITDA refers to EBITDA plus Adjustments.adjustments. EBITDA consists of net income from continuing operations plus: income tax,taxes, interest expense (net of interest income), amortization of finance costs and debt premium, loss on debt extinguishment, depreciation, amortization and asset retirement obligation expense,expenses, amortization of power and fuel contracts, and amortization of emission allowances. Adjustments consist of mark-to-market ofgains or losses from forward position of economic hedges, plus NRG share ofadjustments to include the Adjusted EBITDA infrom unconsolidated affiliates, acquisition and divestiture transaction and integration cost, successful transaction cost, defense and legal settlement cost,costs, deactivation costs, (gain)/lossgain/losses on write-offs, disposals, discontinued operations and purchase accounting impacts, adjusted gain/losses and other impacts associated with unbudgeted acquisitions or sale of operating assets or non-recurring items approved by the Compensation Committee.(3)Adjusted Free Cash Flowand mark-to-market of forward position of economic hedges.
| | | | (4) | | | Credit Ratio refers to Adjusted Cash Flow from Operations, less maintenance capex, environmental capex, preferred dividends and distributions to non-controlling interests. Adjusted Cash Flow from Operations consists of cash flow from operations, excluding: changes in nuclear decommissioning trust liability, changes in collateral deposits supporting energy risk management activities, purchases and sales of emission allowances, plus net payments to settle acquired derivatives that include financing elements. This amount is further adjusted for the impact associated with unbudgeted acquisitions and/or dispositions, adjustments for major changes in timing of environmental capex projects and the impact of non-recurring unusual events approved by the Compensation Committee.(4)Corporate Net Debt, consists of all debtwhich includes senior notes guaranteed by the assets of NRG’s guarantor companies, tax-exempt bonds secured by the assets of NRG’s guarantor subsidiaries, and any incremental debt that would either be secured or guaranteed by NRGsNRG’s guarantor companies, net of cash balances.balances, and Corporate EBITDA refers to previously defined Adjusted EBITDA less Adjusted EBITDA from non-guarantor companies and equity investments to NRG and any guarantor company of NRG, plus cash distributions from non-guarantor companies and equity investments to NRG and any NRG guarantor company, plus non-cash amortization excluded from this ratio as defined by the Corporate Credit Agreementapplicable credit agreement and Indentures,indentures, including equity compensation, nuclear fuel amortization, and bad debt expense.
| | | | (5) | | | ESG refers to: | | | | | | | (a)
Customers — measured by Customer Focus Index (CFI), which measures the overall satisfaction of a customer with NRG’s products and services as well as a customer’s loyalty to NRG’s brand through the use of a net promoter score (NPS) that is determined through a customer survey. The NPS is an index ranging from -100 to 100. To calculate the NPS, detractors (those that score 6 or less out of 10) are subtracted from promoters (a score of 10 or 9). For example, if 50% or respondents to the survey are promotors and 10% are detractors, the NPS is 40%. In order to allow for the fact that NRG has multiple brands across multiple geographies and to account for NPS goals across those factors, goals are indexed into the single metric (the CFI). The Company uses an external company to assess NPS scores, thereby ensuring objective, measurable results; | | | | | | | (b)
Environment — includes creation of the Environmental Performance Index (EPI), based on existing EKPIs and the development of a Carbon Intensity (CI) measure; each weighted 50%. The EPI is calculated based on the achievement of threshold (41.5), target (28.5), and maximum (21.5) EKPI events. The CI measure is set as incomplete, developed, or developed and communicated internally and to key ESG stakeholders; and | | | | | | | (c)
People — includes establishing and launching the ELP to assemble high potential individuals who could be in executive leadership roles, achieving increases in women and people of color candidates at the manager level and above who reach the interview stage, and achieving increases in the well-being score (based on the composite average results of employee responses to three well-being questions with five multiple choice answers). | |
In addition to the quantitative financial and non-financial metrics, each NEO is evaluated on his or her achievement of individual performance criteria that align with Company goals. The Compensation Committee assesses performance of each NEO relative to the performance criteria applicable to each NEO and multiplies the total formulaic AIP award for each NEO by an individual performance factor of up to plus or minus 20%. These criteria are established at the beginning of each fiscal year and include measures tied to the leadership of the business. During 2022, such measures included financial and operational commitments as well as our Power Values that include advancing the customer experience, maintaining an enriching culture and strengthening employee engagement. We believe that these Power Values are the pillars that guide our Company and fuel our growth. The dedication of our NEOs to our Power Values, in combination with their focus on the Company goals, is integral to our success. The Compensation Committee adjusts the total AIP award for the CEO based on its own assessment of the performance criteria applicable to the CEO and recommends such award to the Board for approval. With respect to all other NEOs, the Compensation Committee considers the CEO recommendations for the NEOs and retains the ability to approve the AIP awards. The Compensation Committee retains sole discretion under the AIP to adjust the amount of, or eliminate any, awards that are otherwise payable under the AIP. The 2022 target AIP award opportunities for the NEOs, expressed as a percentage of base salary, as of December 31, 2022, are set forth in the table below. | | Name | | | | Base Salary as of
December 31, 2022
($) | | | | Target
(% of Base Salary)(1) | | | | Target AIP
Award Amount
($) | | | | Mauricio Gutierrez | | | | 1,406,753 | | | | 125 | | | | 1,758,441 | | | | Alberto Fornaro | | | | 737,760 | | | | 100 | | | | 737,760 | | | | Brian Curci | | | | 515,000 | | | | 100 | | | | 515,000 | | | | Elizabeth Killinger | | | | 592,513 | | | | 100 | | | | 592,513 | | | | Christopher Moser | | | | 400,000 | | | | 75 | | | | 300,000 | |
| | (1) | | | Percentages in this column assume that each of the financial performance metrics and all quantitative and qualitative goals are achieved at target levels. | |
Actual AIP payouts can range from 50% of the target percentage to 200% of the target percentage, which reflect the threshold and maximum AIP award opportunities, respectively. For each individual metric, there will be a 0% achievement unless the result meets the threshold level of performance.
2022 AIP RESULTS AND PAYMENTS
The following table details the quantitative financial and non-financial performance goals and results for 2022, as approved by the Compensation Committee: | | Performance Metric | | | | Weight | | | | Threshold | | | | Target | | | | Maximum | | | | Result | | | | AIP Metric Result | | | | Adjusted Free Cash Flow ($ in millions) | | | | 35% | | | | $912 | | | | $1,245 | | | | $1,555 | | | | $792 | | | | 0% | | | | Adjusted EBITDA ($ in millions) | | | | 35% | | | | $1,460 | | | | $2,088 | | | | $2,298 | | | | $1,910 | | | | 86% | | | | Credit Ratio | | | | 15% | | | | 3.33x | | | | 3.20x | | | | 3.08x | | | | 3.56x | | | | 0% | | | | ESG | | | | 15% | | | | 50% | | | | 100% | | | | 200% | | | | 156% | | | | 156% | |
As noted above, with respect to AIP awards for 2019,2022, after due consideration, the Compensation Committee approved a final AIP Gate was $983 million,result of 53%, in accordance with the Adjusted Free Cash Flow target was $1,340 million,Company’s performance metrics results and did not make any adjustments based on individual performance for the Adjusted EBITDA target was $2,005 million, and the Corporate Debt to Corporate EBITDA Ratio target was 2.75x. For 2019, the AIP Gate was surpassed, the Adjusted Free Cash Flow achievement was approximately $1,287 million, the Adjusted EBITDA achievement was approximately $1,906 million, and the Corporate Debt to Corporate EBITDA Ratio achievement was above maximum at 2.44x.CEO or other NEOs. The AIP awards paid to each of the NEOs for 2019 were:Named Executive
Officer | 2019
Annualized
Base Salary
($) | AIP Target
(%) | Percent of
Target
Achieved
(%) | Individual
Performance
Modifier (%) | AIP Paid ($) | Mauricio Gutierrez | 1,300,000 | 125 | 124.5 | 115 | 2,326,594 | Kirkland Andrews | 690,683 | 100 | 124.5 | 110 | 945,890 | Elizabeth Killinger | 547,549 | 75 | 124.5 | 110 | 562,401 | Christopher Moser | 547,549 | 75 | 124.5 | 115 | 587,965 | Brian Curci | 460,125 | 50 | 124.5 | 110 | 315,070 |
2022 were as follows: | | Name | | | | Base Salary as of
December 31, 2022
($) | | | | AIP Target
(%) | | | | Percent of
Target
Achieved
(%) | | | | Individual
Performance
Modifier
(%) | | | | Total AIP
Target
Achieved
(%) | | | | Total AIP
Paid
($) | | | | Mauricio Gutierrez | | | | 1,406,753 | | | | 125 | | | | 53 | | | | 0.00 | | | | 53 | | | | 931,974 | | | | Alberto Fornaro | | | | 737,760 | | | | 100 | | | | 53 | | | | 0.00 | | | | 53 | | | | 391,013 | | | | Brian Curci | | | | 515,000 | | | | 100 | | | | 53 | | | | 0.00 | | | | 53 | | | | 272,950 | | | | Elizabeth Killinger | | | | 592,513 | | | | 100 | | | | 53 | | | | 0.00 | | | | 53 | | | | 314,032 | | | | Christopher Moser | | | | 400,000 | | | | 75 | | | | 53 | | | | 0.00 | | | | 53 | | | | 159,000 | |
LONG-TERM INCENTIVE COMPENSATION We believe that equity awards directly align our NEOs’ interests with those of our stockholders. For our 2019 grants, we awarded our NEOs a combination of RPSU awards, which are based on the Company’s TSR performance relative to its
| peers, and time-based RSU awards. The large majority of long-term incentive compensation (67%) was delivered using RPSUs, demonstrating the Compensation Committee’s focus on pay for performance. Due to its retention aspects, we continued to award RSUs, although they comprised only 33% of each NEO’s grant date award opportunity for the 2019 grant.
| 
| | | | |
RANGE OF
We believe that equity awards directly align our NEOs’ interests with those of our stockholders. For our 2022 grants, we awarded our NEOs a combination of RPSUs, which are based on the Company’s TSR performance relative to its peers, and time-based RSUs. The large majority of long-term incentive compensation (67%) was delivered using RPSUs, demonstrating the Compensation Committee’s focus on pay for performance. Due to its retention aspects and alignment with stockholders, we continued to award RSUs, although they represent only 33% of each NEO’s grant date award opportunity for the 2022 grant. LTIP COMPENSATIONAWARD OPPORTUNITY The 2022 target LTIP award opportunities for the NEOs, as of the date of the annual LTIP grant on January 2, 2022, are set forth in the table below. | | Name | | | | Base Salary as of
January 2, 2022
($) | | | | LTIP Target as Percent
of Base Salary
(%) | | | | Target LTIP
Award Value
($) | | | | Mauricio Gutierrez | | | | 1,365,780 | | | | 575 | | | | 7,853,235 | | | | Alberto Fornaro | | | | 725,000 | | | | 250 | | | | 1,812,500 | | | | Brian Curci | | | | 500,000 | | | | 250 | | | | 1,250,000 | | | | Elizabeth Killinger | | | | 575,255 | | | | 250 | | | | 1,438,138 | | | | Christopher Moser | | | | 575,255 | | | | 250 | | | | 1,438,138 | |
LTIP AWARDS The aggregate value of equity awards granted to each NEO for fiscal year 20192022 was reviewed relative toagainst size-adjusted compensation survey data for NEO compensation data from our Compensation Peer Group.counterparts in similar positions in the energy, general, and consumer products industries. Pay Governance provided this compensation benchmark data for the Compensation Peer Group, as well as for broader industry practice, to the Compensation Committee. Our practice is to issue annual equity awards on January 2 of each calendar year, using the first trading dayclosing price of the calendar year. For fiscal year 2019,Company’s common stock on such date, unless the grant date was January 2, 2019.falls on a non-trading date, in which case the closing price of the common stock on the previous trading date is used. The closing price per share of the Company’s common stock on the grant date for grants issued in January 2022 was $38.11$43.08 per share. The LTIP awards are set forth in the “Stock Awards” column of the Summary Compensation Table for Fiscal Year ended December 31, 2022, as well as the Grants of Plan-Based Awards for Fiscal Year ended December 31, 2022, table. RELATIVE PERFORMANCE STOCK UNITS Each RPSU represents
RPSUs represent the potential to receive one shareshares of common stock after the completion of three years of service from the date of grant based on the Company’s TSR performance ranked against the TSR performance of a strongly correlated comparator group (the Performance Peer Group).the performance peer group. Relative measures are designed to minimize the impact of externalities, ensuring the program appropriately reflects management’s impact on the Company’s TSR by including peer companies and indices that are similarly impacted by market conditions.TSR.
The payout of shares of common stock at the end of the three-year performance period will beis based on the Company’s TSR performance percentile rank compared withrelative to the TSR performance peer group, as calculated under the terms of the Performance Peer Group.award agreements. The following table illustrates the design of our RPSUs in 2019.2022. As the table shows, above-median TSR is required in order to earn target awards under the plan. In addition, if our absolute TSR is less than negative 15% over the performance period, the threshold for target payouts is increased from the 55th to the 65th percentile. Additional details regarding RPSU awards are set forth following the Grants of Plan-Based Awards for Fiscal Year ended December 31, 20192022, table. 
RPSU awards granted since 2018 were updated to limit the maximum award value that an NEO may receive to six times (6x) the fair market value of the target award, determined as of the date of grant.
RPSU awards scheduled to vest over the three-year performance period ended January 2, 2023 (based on a common stock price as of December 31, 2022) were forfeited (paid at 0% of target) as a result of the 6.57% decrease in TSR, as calculated in accordance with the terms of the outstanding RPSU. Such TSR measure was last in the performance peer group used to assess performance for the 2020 award. Each RSU represents the right to receive one share of common stock after the completion of the applicable vesting period. The RSU awards granted in 20192022 vest ratably, meaning that one-third of the award vests each year on the anniversary of the grant date, over a three-year period. Occasionally, the Compensation Committee will use alternate RSU vesting periods, but only on an exception basis, such as for a new-hire with a specific skill set or to serve as an enhanced retention tool. MARKET STOCK UNITS
In 2017, the Compensation Committee replaced market stock unit (MSU) awards with RPSU awards. As a result, the last outstanding MSU awards vested in January 2019. Each MSU represented the potential to receive common stock after the completion of three years of service from the date of grant based on absolute NRG stock price change (plus dividends) versus a
baseline. The number of shares of common stock paid as of the vesting date for each MSU award was equal to a TSR Multiplier times the target MSUs on the date of grant. The “TSR Multiplier” was the 20-trading day average closing price on the vesting date divided by the 20-trading day average closing price on the grant date, taking into account any dividends issued during the performance period, presumed reinvested as of the ex-dividend date. The TSR Multiplier thresholds and the valuation premium attributable to the awards were the features that tie the value of our MSU awards to NRG’s performance. Payout of stock for MSU awards were based on TSR performance over the three-year performance period.
DIVIDEND EQUIVALENT RIGHTS
In connection with each equity award, each NEO also receives DERs, which accrue with respect to the award to which they relate. Accrued DERs are paid at the same time that the shares of common stock underlying each award are delivered to the NEO. No DERs are paid if the underlying shares fail to vest.
The Company has a “clawback” policy with regard to awards made under the AIP and LTIP in the case of a material financial restatement, including a restatement that was the result of employee misconduct, or in the case of fraud, embezzlement or other serious misconduct that was materially detrimental to the Company. The Compensation Committee retains discretion regarding the application of the clawback policy. The policy is in addition to other remedies that are available to the Company. If the Company is required to restate its earnings as a result of noncompliance with a financial reporting requirement due to misconduct, under the Sarbanes-Oxley Act of 2002 (SOX), the CEO and the CFO would also be subject to a clawback, as required by SOX.
NEOs participate in the same retirement, life insurance, health and welfare plans as other salaried employees of the Company. A financial planning reimbursement benefit for NEOs was eliminated for 2019, as part of the Transformation Plan, except for Mr. Gutierrez, who retained the benefit as a result of his employment agreement entered into in December 2015. Additionally, pursuant to the terms of his employment agreement, described in more detail in the section entitled “Employment Agreements” below, Mr. Gutierrez received additional benefits in the form of term life insurance with a death benefit of $7.75 million, and up to $10,000 for reimbursement of disability insurance premiums. We also provide certain security measures forIn 2022, the Company paid the expenses associated with Mr. GutierrezFornaro’s relocation to address safety concerns given his position as our Presidentheadquarters in Houston, Texas. These expenses are considered imputed income and CEO. In 2018, we paid for the initial procurement, installation and maintenance of personal residential security measures for Mr. Gutierrez. This security program is intended to decrease security threats to Mr. Gutierrez, which isare reflected in the best interestsAll Other Compensation column of the Company and its stockholders. As such, we believe the costs incurred in implementing these security measures were appropriate, reasonable and necessary, and we do not consider Mr. Gutierrez’s overall security program to be a perquisite for his benefit. However, the costs related to Mr. Gutierrez’s personal security incurred in 2018 are reported in the “All Other Compensation” column in the Summary Compensation Table below. We did not incur any cost related to Mr. Gutierrez’s security measures in 2019.Table. We do not provide any gross-ups on perquisites for executive officers.
POTENTIAL SEVERANCE AND CHANGE-IN-CONTROL BENEFITS
Severance and change-in-control agreements are market practice among publicly held companies. Most often, these agreements are utilized to encourage executives to remain with the Company during periods of extreme job uncertainty and to evaluate a potential transaction in an impartial manner. We choose to payprovide severance and change-in-control benefitsarrangements to assist with career transitions of our executives as well as to create an environment that provides for an adequate business transition and knowledge transfer during times of change. Change-in-control agreements are market practice among publicly-held companies. Most often, these agreements are utilized to encourage executives to remain with the company during periods of extreme job uncertainty and to evaluate a potential transaction Further, in an impartial manner. In order to enable a smooth transition during an interim period, severance and change-in-control agreements provide a defined level of security for the executive and the company,Company, enabling a more seamless implementation of a particular acquisition or an asset sale or purchase, and subsequent integration.
Pursuant to his employment agreement, Mr. Gutierrez is entitled to severance payments and benefits in the event of termination of employment under certain circumstances, including following a change-in-control.
Pursuant to the Company’s Amended and Restated Executive Change-in-Control and General Severance Plan for Tier IA and Tier IIA Executives (CIC Plan), NEOs other than Mr. Gutierrez are entitled to a change-in-control benefit.
For a more detailed discussion, including the quantification of potential payments, please see the section entitled “Severance and Change-in-Control” following the executive compensation tables below. Oversight of Risks Related to Compensation Policies
OVERSIGHT OF RISKS RELATED TO COMPENSATION POLICIES The Compensation Committee oversees risks related to our compensation policies and practices. The Company’s Enterprise Risk Management team assists the Compensation Committee with its oversight and analysis of these risks. To assist the Compensation Committee with determining whether the Company’s compensation policies and practices subject the Company to unnecessary risk or could potentially motivate employees to take excessive risk, the Company’s Enterprise Risk Management team conducts reviews of these policies and practices and reports to the Compensation Committee its findings as follows: ·
•
base salaries are a sufficient component of total compensation to discourage excessive risk taking; ·
•
earnings goals under the Company’s AIP are based upon its audited financial statements and the Company believes that the goals are attainable without the need to take inappropriate risks or make material changes to the Company’s business or strategy; ·
•
NEOs who receive payment under the AIP and the Company’s LTIP may be required to reimburse the Company for all or a portion of the payment (commonly referred to as a clawback) if the Company has to prepare an accounting restatement because it is in material noncompliance with any financial reporting requirements or in the case of fraud, embezzlement or other serious misconduct, which discourages risk taking; ·
•
the Company uses awards RPSUs under the LTIP that are typically based upon total stockholder returnTSR over three-year periods, such as the RPSU awards and the previously issued MSU awards, which mitigates short-term risk taking; ·
•
the Company utilizes a balanced mix of absolute and relative metrics; •
earnings under our AIP and performance equity program are capped; •
because incentive compensation has a large equity component, value is best realized through long-term appreciation of stockholder value, especially when coupled with the stock ownership guidelines, which expose the Company’s NEOs to loss of the value of the retained equity if stock appreciation is jeopardized; and ·
•
the use of incentive compensation components that are paid or vest over an extended period mitigates against unnecessary or excessive risk taking.
Furthermore, the Enterprise Risk Management team continues to evaluate and review new or amended compensation policies or practices and reports its findings to the Compensation Committee, which are consistent with the principles identified above.
As a result of the review, management and the Compensation Committee have concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. Anti-Hedging and Anti-Pledging Policies
ANTI-HEDGING AND ANTI-PLEDGING POLICIES The Company prohibits executive officers, directors and employees from directly or indirectly engaging in any kind of hedging transaction that could reduce or limit their economic risk with respect to their holdings, ownership or interest in the Company’s securities, including prepaid variable forward contracts, equity swaps, collars, puts, calls and options. The Company also prohibits executive officers, directors and employees from directly or indirectly engaging in any transaction in which the Company’s securities are being pledged. Other Matters
OTHER MATTERS STOCK OWNERSHIP GUIDELINES
The Compensation Committee and the Board require each NEO to hold NRG stock with a value equal to a multiple of his or her base salary until his or her termination, as set forth in the table below. Personal holdings, vested awards and unvested, time-based RSUs count towards the ownership multiple. Unvested RPSUs and non-qualified stock options do not count towards the ownership multiple. Although the NEOs are not required to make purchases of our common stock to meet their target ownership multiple, NEOs are restricted from divesting any securities until such ownership multiples are attained, except in the event of a hardship or to make a required tax payment, and must maintain their ownership multiple after any such transactions. The current stock ownership for our NEOs is shown below, based on the closing share price of $34.17$34.38 on March 2, 2020:6, 2023:Named Executive Officer
| Target
Ownership
Multiple
Name | | | | Target Ownership Multiple | | | | Actual
Ownership
Multiple | | | Mauricio Gutierrez | 6.0x
| 22.9x
| | 6.0x | | | | 28.9 | | Kirkland Andrews
| 2.5x
Alberto Fornaro(1) | 12.6x
| | | 3.0x | | | | 2.3 | | Elizabeth Killinger
| 2.5x
Brian Curci | 7.8x
| | | 3.0x | | | | 4.6 | | Christopher Moser
| 2.5x
Elizabeth Killinger | 7.0x
| | | 3.0x | | | | 7.1 | | Brian Curci
| 2.0x
Christopher Moser | 1.9x
| | | 2.0x | | | | 14.0 | |
| | (1) | | | Mr. Fornaro was appointed to serve as Executive Vice President and Chief Financial Officer effective June 1, 2021. | |
TAX AND ACCOUNTING CONSIDERATIONS
The Compensation Committee takes into account tax consequences to NEOs in designing the various elements of our compensation program, such as designing the terms of awards to defer immediate income recognition in accordance with Section 409A of the Code. The Compensation Committee remains informed of and takes into account the accounting implications of its compensation programs. However, the Compensation Committee approves programs based on their total alignment with our strategy and long-term goals.
COMPENSATION TABLES SUMMARY COMPENSATION TABLE FOR FISCAL YEAR ENDED DECEMBER 31, 2019Name and
Principal
Position | | Year | | Base Salary
($)(1) | | Bonus
($) | | Stock
Awards
($)(2) | | Option
Awards
($)(2) | | Non-Equity
Incentive Plan
Compensation
($)(3) | | Change in
Pension
Value and
Non-qualified
Deferred
Compensation
Earnings
($) | | All Other
Compensation
($) | | Total
($) | Mauricio Gutierrez
President and Chief Executive Officer | | 2019 | | 1,297,038 | | — | | 5,483,422 | | — | | 2,326,594 | | — | | 38,999 | | 9,146,053 | | 2018 | | 1,230,000 | | — | | 5,227,554 | | — | | 2,406,418 | | — | | 50,976 | | 8,914,948 | | 2017 | | 1,225,962 | | — | | 5,227,515 | | — | | 2,550,713 | | — | | 45,472 | | 9,049,662 | Kirkland Andrews
Executive Vice President and Chief Financial Officer | | 2019 | | 690,040 | | — | | 1,371,026 | | — | | 945,890 | | — | | 11,112 | | 3,018,068 | | 2018 | | 674,976 | | — | | 1,351,000 | | — | | 965,302 | | — | | 9,829 | | 3,001,107 | | 2017 | | 661,498 | | — | | 1,324,493 | | — | | 1,150,973 | | — | | 22,868 | | 3,159,832 | Elizabeth Killinger
Executive Vice President, Retail | | 2019 | | 546,832 | | — | | 1,086,886 | | — | | 562,401 | | — | | 11,200 | | 2,207,319 | | 2018 | | 530,204 | | — | | 1,061,246 | | — | | 568,695 | | — | | 11,000 | | 2,171,145 | | 2017 | | 519,808 | | — | | 1,040,423 | | — | | 616,437 | | — | | 18,750 | | 2,195,418 | Christopher Moser
Executive Vice President, Operations | | 2019 | | 547,039 | | — | | 1,086,886 | | — | | 587,965 | | — | | 11,200 | | 2,233,090 | | 2018 | | 533,481 | | — | | 1,050,035 | | — | | 601,273 | | — | | 11,000 | | 2,195,789 | | 2017 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | Brian Curci
Senior Vice President and General Counsel | | 2019 | | 458,178 | | 125,000(4) | | 558,312 | | — | | 315,070 | | — | | 11,200 | | 1,467,760 | | 2018 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | 2017 | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | | N/A | (1) Reflects base salary earnings. (2) Reflects the GDFV determined in accordance with the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Comparison—Stock Compensation. The assumptions made in these valuations are discussed in our Annual Report on Form 10-K in Item 15 — Consolidated Financial Statements. For performance-based RPSUs granted in 2019, if the maximum level of performance is achieved, the fair value will be approximately $7,403,572 for Mr. Gutierrez, $1,851,122 for Mr. Andrews, $1,467,478 for Ms. Killinger, $1,467,478 for Mr. Moser, and $753,832 for Mr. Curci. (3) The amounts shown in this column represent the AIP bonuses paid to the NEOs. Further information regarding the AIP bonuses is included in the “2019 AIP Payments” section of this Proxy Statement. (4) Represents a project bonus awarded to Mr. Curci based on his work supporting the separation of GenOn Energy, Inc. and its successful emergence from bankruptcy. |
The amounts provided in the Non-Equity Incentive Plan Compensation column represent values earned under NRG’s 2019, 2018 and 2017 AIP payable in March 2020, March 2019, and March 2018, respectively. NEOs were provided the opportunity to earn a cash incentive payment based on the attainment of certain pre-established Company and individual goals for fiscal years 2019, 2018 and 2017. The dollar amounts in the table represent payments made for actual 2019, 2018 and 2017 Company performance.
The amounts provided in the All Other Compensation column represent the additional benefits payable by NRG and include insurance benefits, the employer match under the Company’s 401(k) plan, and the amount payable under NRG’s all-employee discretionary contribution to the 401(k) plan. The amounts provided in the All Other Compensation column include payments for the security program for Mr. Gutierrez in 2018. The following table identifies the additional compensation for each NEO.
Name | Year | Life
Insurance
Reimbursement
($) | Disability
Insurance
($) | Financial
Advisor
Services
($) | 401(k)
Employer
Matching
Contribution
($) | 401(k)
Discretionary
Contribution
($) | Security
Program
($) | Total
($) | Mauricio Gutierrez | 2019 | 4,952 | 10,765 | 12,083 | 11,200 | — | — | 38,999 | | 2018 | 4,952 | 10,271 | 12,045 | 11,075 | — | 12,633 | 50,976 | | 2017 | 4,952 | 9,794 | 12,052 | 10,724 | 7,950 | — | 45,472 | Kirkland Andrews | 2019 | — | — | — | 11,112 | — | — | 11,112 | | 2018 | — | — | 2,991 | 6,838 | — | — | 9,829 | | 2017 | — | — | 4,447 | 10,471 | 7,950 | — | 22,868 | Elizabeth Killinger | 2019 | — | — | — | 11,200 | — | — | 11,200 | | 2018 | — | — | — | 11,000 | — | — | 11,000 | | 2017 | — | — | — | 10,800 | 7,950 | — | 18,750 | Christopher Moser | 2019 | — | — | — | 11,200 | — | — | 11,200 | | 2018 | — | — | — | 11,000 | — | — | 11,000 | | 2017 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | Brian Curci | 2019 | — | — | — | 11,200 | — | — | 11,200 | | 2018 | N/A | N/A | N/A | N/A | N/A | N/A | N/A | | 2017 | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR ENDED DECEMBER 31, 2019
| Estimated Possible Payouts Under
Non-Equity Incentive
Plan Awards | Estimated Future Payouts
Under Equity Incentive
Plan Awards | All Other
Stock
Awards:
Number
of Shares
of Stock or Units | Grant Date
Fair Value
of Stock
and
Option
Awards | Name | Award
Type | Grant
Date | Approval
Date | Threshold
($)(1) | Target
($)(2) | Maximum
($)(3) | Threshold
(#) | Target
(#) | Maximum
(#) | (#) | ($)(4) | Mauricio Gutierrez | AIP | — | — | 812,500 | 1,625,000 | 3,250,000 | — | — | — | — | — | RPSU | 1/2/2019 | 12/6/2018 | — | — | — | 20,220 | 80,878 | 161,756 | — | 3,701,786 | RSU | 1/2/2019 | 12/6/2018 | — | — | — | — | — | — | 47,842 | 1,781,636 | Kirkland Andrews | AIP | — | — | 345,341 | 690,683 | 1,381,366 | — | — | — | — | — | RPSU | 1/2/2019 | 11/20/2018 | — | — | — | 5,056 | 20,222 | 40,444 | — | 925,561 | RSU | 1/2/2019 | 11/20/2018 | — | — | — | — | — | — | 11,962 | 445,465 | Elizabeth Killinger | AIP | — | — | 205,331 | 410,662 | 821,324 | — | — | — | — | — | RPSU | 1/2/2019 | 11/20/2018 | — | — | — | 4,008 | 16,031 | 32,062 | — | 733,739 | RSU | 1/2/2019 | 11/202018 | — | — | — | — | — | — | 9,483 | 353,147 | Christopher Moser | AIP | — | — | 205,331 | 410,662 | 821,324 | — | — | — | — | — | RPSU | 1/2/2019 | 11/20/2018 | — | — | — | 4,008 | 16,031 | 32,062 | — | 733,739 | RSU | 1/2/2019 | 11/20/2018 | — | — | — | — | — | — | 9,483 | 353,147 | Brian Curci | AIP | — | — | 115,031 | 230,062 | 460,125 | — | — | — | — | — | RPSU | 1/2/2019 | 11/20/2018 | — | — | — | 2,059 | 8,235 | 16,470 | — | 376,916 | RSU | 1/2/2019 | 11/20/2018 | — | — | — | — | — | — | 4,871 | 181,396 |
| | Name and Principal
Position | | | | Year | | | | Base Salary
($)(1) | | | | Bonus
($) | | | | Stock
Awards
($)(2) | | | | Non-Equity
Incentive Plan
Compensation
($)(3) | | | | All Other
Compensation
($) | | | | Total
($) | | | | Mauricio Gutierrez
President and Chief
Executive Officer | | | | 2022 | | | | 1,400,449 | | | | — | | | | 7,784,067 | | | | 931,974 | | | | 35,357 | | | | 10,151,847 | | | | 2021 | | | | 1,369,385 | | | | — | | | | 7,694,426 | | | | 1,707,225 | | | | 83,188 | | | | 10,854,224 | | | | 2020 | | | | 1,388,700 | | | | — | | | | 5,660,310 | | | | 2,791,815 | | | | 38,451 | | | | 9,879,276 | | | | Alberto Fornaro(4)
Executive Vice President and Chief Financial Officer | | | | 2022 | | | | 735,797 | | | | 500,000 | | | | 1,796,550 | | | | 391,013 | | | | 47,365 | | | | 3,470,725 | | | | 2021 | | | | 415,481 | | | | 500,000 | | | | 999,980 | | | | 318,801 | | | | 9,927 | | | | 2,244,188 | | | | Brian Curci
Executive Vice President, Legal and General Counsel | | | | 2022 | | | | 512,692 | | | | — | | | | 1,238,977 | | | | 272,950 | | | | 3,077 | | | | 2,027,696 | | | | Elizabeth Killinger Executive Vice President, NRG Home | | | | 2022 | | | | 589,858 | | | | — | | | | 1,425,470 | | | | 314,032 | | | | 3,540 | | | | 2,332,900 | | | | 2021 | | | | 573,520 | | | | — | | | | 1,406,711 | | | | 575,255 | | | | 11,600 | | | | 2,567,086 | | | | 2020 | | | | 584,909 | | | | — | | | | 1,121,932 | | | | 705,534 | | | | 11,400 | | | | 2,423,775 | | | | Christopher Moser(5)
Head of Competitive Markets and Policy | | | | 2022 | | | | 519,517 | | | | — | | | | 1,425,470 | | | | 159,000 | | | | 3,540 | | | | 2,107,527 | | | | 2021 | | | | 573,520 | | | | — | | | | 1,406,711 | | | | 575,255 | | | | 11,600 | | | | 2,567,086 | | | | 2020 | | | | 584,909 | | | | — | | | | 1,121,932 | | | | 705,534 | | | | 11,400 | | | | 2,423,775 | |
| (1)Threshold non-equity incentive plan awards include annual incentive plan threshold payments, as presented in the CD&A. | | | Reflects actual base salary earnings. | | | | (2)Target non-equity incentive plan awards include annual incentive plan target payments, as presented in the CD&A.(3)Maximum non-equity incentive plan awards include annual incentive plan maximum payments, as presented in the CD&A.
(4)
| | | Reflects the GDFVgrant date fair value determined in accordance with the Financial Accounting Standards Board Accounting Standards CodificationFASB ASC Topic 718, Comparison.Compensation — Stock Compensation. The assumptions made in these valuations are discussed in our Annual Report on Form 10-K in Item 15 — Consolidated Financial Statements. For performance-based RPSUs granted in 2022, if the maximum level of performance is achieved, the fair value will be approximately $10,523,368 for Mr. Gutierrez, $2,428,787 for Mr. Fornaro, $1,674,994 for Mr. Curci, $1,927,139 for Ms. Killinger, and $1,927,139 for Mr. Moser. | | | | (3) | | | The amounts shown in this column represent the AIP bonuses paid to the NEOs. Further information regarding the AIP bonuses is included in the “2022 AIP Results and Payments” section of the CD&A. | | | | (4) | | | Mr. Fornaro was appointed to serve as Executive Vice President and Chief Financial Officer effective June 1, 2021. In connection with his appointment, Mr. Fornaro received a sign-on bonus consisting of $1,000,000 payable in two installments ($500,000 within 30 days of June 1, 2021 and $500,000 within 30 days of June 1, 2022). | | | | (5) | | | Mr. Moser transferred to a newly created leadership role as Head of Competitive Markets and Policy effective in August 2022. | |
2019 Annual Incentive Plan
The amounts provided in the All Other Compensation column represent the additional benefits payable by NRG and include insurance benefits and the employer match under the Company’s 401(k) plan. The amounts provided in the All Other Compensation column for Mr. Gutierrez include term life insurance reimbursement of disability insurance premiums, and a financial planning reimbursement benefit, each as previously described in the CD&A. The following table identifies the additional compensation for each NEO. | | Name | | | | Year | | | | Life Insurance
Reimbursement
($) | | | | Disability
Insurance
($) | | | | Financial Advisor
Services
($) | | | | 401(k)
Employer
Matching Contribution
($) | | | | Relocation
Expenses
($) | | | | Total
($) | | | | Mauricio Gutierrez | | | | 2022 | | | | 4,952 | | | | 10,000 | | | | 12,000 | | | | 8,405 | | | | — | | | | 35,357 | | | | 2021 | | | | 4,952 | | | | 10,000 | | | | 12,000 | | | | 11,600 | | | | 44,637 | | | | 83,188 | | | | 2020 | | | | 4,952 | | | | 10,000 | | | | 12,099 | | | | 11,400 | | | | — | | | | 38,451 | | | | Alberto Fornaro | | | | 2022 | | | | — | | | | — | | | | — | | | | 6,135 | | | | 41,230 | | | | 47,365 | | | | 2021 | | | | — | | | | — | | | | — | | | | 9,927 | | | | — | | | | 9,927 | | | | Brian Curci | | | | 2022 | | | | — | | | | — | | | | — | | | | 3,077 | | | | — | | | | 3,077 | | | | Elizabeth Killinger | | | | 2022 | | | | — | | | | — | | | | — | | | | 3,540 | | | | — | | | | 3,540 | | | | 2021 | | | | — | | | | — | | | | — | | | | 11,600 | | | | — | | | | 11,600 | | | | 2020 | | | | — | | | | — | | | | — | | | | 11,400 | | | | — | | | | 11,400 | | | | Christopher Moser | | | | 2022 | | | | — | | | | — | | | | — | | | | 3,540 | | | | — | | | | 3,540 | | | | 2021 | | | | — | | | | — | | | | — | | | | 11,600 | | | | — | | | | 11,600 | | | | 2020 | | | | — | | | | — | | | | — | | | | 11,400 | | | | — | | | | 11,400 | |
GRANTS OF PLAN-BASED AWARDS FOR FISCAL YEAR ENDED DECEMBER 31, 2022 | | | | | | | | | | | | | | | | | | Estimated Possible Payouts Under
Non-Equity Incentive Plan Awards | | | | Estimated Future Payouts Under
Equity Incentive Plan Awards | | | | All Other
Stock
Awards:
Number
of Shares
of Stock
or Units | | | | Grant Date
Fair Value
of Stock
and Option
Awards | | | | Name | | | | Award
Type | | | | Grant
Date | | | | Approval
Date | | | | Threshold
($)(1) | | | | Target
($)(2) | | | | Maximum
($)(3) | | | | Threshold
(#) | | | | Target
(#) | | | | Maximum
(#) | | | | (#) | | | | ($)(4) | | | | Mauricio Gutierrez | | | | AIP | | | | — | | | | — | | | | 879,221 | | | | 1,758,441 | | | | 3,516,882 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RPSU | | | | 1/2/2022 | | | | 12/2/2021 | | | | — | | | | — | | | | — | | | | 22,913 | | | | 91,651 | | | | 183,302 | | | | — | | | | 5,261,684 | | | | RSU | | | | 1/2/2022 | | | | 12/2/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 60,157 | | | | 2,522,383 | | | | Alberto Fornaro | | | | AIP | | | | — | | | | — | | | | 368,880 | | | | 737,760 | | | | 1,475,520 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RPSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | 5,288 | | | | 21,153 | | | | 42,306 | | | | — | | | | 1,214,394 | | | | RSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 13,884 | | | | 582,156 | | | | Brian Curci | | | | AIP | | | | — | | | | — | | | | 257,500 | | | | 515,000 | | | | $1,030,000 | | | | — | | | | — | | | | — | | | | | | | | | | | | RPSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | 3,647 | | | | 14,588 | | | | 29,176 | | | | | | | | 837,497 | | | | RSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 9,575 | | | | 401,480 | | | | Elizabeth Killinger | | | | AIP | | | | — | | | | — | | | | 296,257 | | | | 592,513 | | | | 1,185,026 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RPSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | 4,196 | | | | 16,784 | | | | 33,568 | | | | — | | | | 963,569 | | | | RSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,016 | | | | 461,901 | | | | Christopher Moser | | | | AIP | | | | — | | | | — | | | | 150,000 | | | | 300,000 | | | | 600,000 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | RPSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | 4,196 | | | | 16,784 | | | | 33,568 | | | | — | | | | 963,569 | | | | RSU | | | | 1/2/2022 | | | | 11/19/2021 | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 11,016 | | | | 461,901 | |
| | (1) | | | Threshold non-equity incentive plan awards include AIP threshold payments, as presented in the CD&A. | | | | (2) | | | Target non-equity incentive plan awards include AIP target payments, as presented in the CD&A. | | | | (3) | | | Maximum non-equity incentive plan awards include AIP maximum payments, as presented in the CD&A. | | | | (4) | | | Reflects the grant date fair value determined in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. The assumptions made in these valuations are discussed in our Annual Report on Form 10-K in Item 15 — Consolidated Financial Statements. | |
2022 ANNUAL INCENTIVE PLAN NEOs were provided the opportunity to earn an AIP award based on the attainment of certain pre-established Company and individual goals for fiscal year 2019.2022. The performance criteria and weight given to each are described in detail in the CD&A. The dollar amount of the possible AIP award payments for achieving the threshold, target or maximum levels of performance during the fiscal year 20192022 are shown in the above table. If the Company is required to prepare an accounting restatement because it is in material noncompliance with any financial reporting requirements, then any NEO who has received a payment under the“2022 AIP may be required to reimburse the Company for all or a portion of the payment (commonly referred to as a clawback).2019 Long-Term Equity Incentives
Results and Payments” table above. 2022 LONG-TERM EQUITY INCENTIVES Long-term equity incentive grants to NEOs in 20192022 consisted of RPSU awards and RSU awards. Consistent with our policy, these awards were granted to NEOs as of the first trading day of the fiscal year, i.e.,on January 2, 2019.2022. Awards under the Company’s LTIP contain a “double trigger” provision, meaning the vesting of the awards will not accelerate, if at all, unless there is a termination of employment in connection with a change-in-control. Relative Performance Stock Units
RELATIVE PERFORMANCE STOCK UNITS Each RPSU represents the potential to receive common stock after the completion of three years of service from the date of grant based on the Company’s TSR performance ranked against the TSR performance of the Performance Peer Group.performance peer group. The payout of shares of common stock at the end of the three-year performance period will be based on the Company’s TSR performance percentile rank, compared with the TSR performance of the Performance Peer Group.performance peer group. To ensure a rigorous program design, the target-level payout (100% of shares granted) requires the Company to perform above median, at the 55th55th percentile. To induce management to achieve greater than target-level performance in a down market, in the event that NRG’s TSR performance declines by more than 15% over the performance period, target-level payout (100% of shares granted) will require an even greater achievement at the 65th65th percentile performance. The Compensation Committee believes that this increased performance requirement addresses the concern that a disproportionate award may be paid in the event that our relative performance is high, but absolute performance is low.
In the event that relative performance is below the 25th25th percentile, the award is forfeited. In the event that relative performance is at the 25th25th percentile, the quantity of shares paid out is equal to 25% of target. In the event that relative performance is between the 25th25th percentile and the 55th55th percentile (or the 65th65th percentile if our TSR performance declines by more than 15% over the performance period), payout will be based on an interpolated calculation. In the event that relative performance reaches the 55th55th percentile (or the 65th65th percentile if our TSR performance declines by more than 15% over the performance period), 100% of the target award will be paid. In the event that relative performance is between the 55th55th percentile (or the 65th65th percentile if our TSR performance declines by more than 15% over the performance period) and the 75th75th percentile, payout will be based on an interpolated calculation. In the event that relative performance is at or above the 75th75th percentile, the quantity of shares paid out is equal to 200% of target. RPSU awards granted since 2018 were updated to limit the maximum award value that an NEO may receive to six times (6x) the fair market value of the target award, determined as of the date of grant.
If the NEO’s employment is terminated as a result of a change-in-control, a final RPSU award, if any, will be determined by the Compensation Committee. If the NEO’s employment is terminated for any reason other than death, a qualifying disability, a qualifying retirement, or, with respect to any NEO who is a SVPSenior Vice President (SVP) at the time of grant, an eligible termination (as described below), including, without limitation, termination of service as a result of voluntary resignation or termination for cause, the RPSU award will expire and be forfeited. In the event of a termination of service by reason of death or a qualifying disability, whereby the NEO’s employment is terminated due to a total and permanent disability, the RPSU award will vest in full at the target level and the common stock underlying the award will be issued to the NEO, or in the case of death, the NEO’s legal representatives, heirs, legatees, or distributees. A qualifying retirement occurs in the event that an NEO, who is at least 55 years of age at the time of retirement, retires with more than 10 years of service to the Company. In such event, if the retirement occurs at least 12 months after the grant date, the final RPSU award will continue to vest throughout the remainder of the performance period. In addition to these rights, SVPs who are such at the time of grant are also entitled to a pro-rata award in the event of an eligible termination, which means an involuntary termination of service in connection with the sale of a business segment, restructuring or reduction in workforce. Restricted Stock Units
RESTRICTED STOCK UNITS Each RSU represents the right to receive one share of common stock as of the vesting date for the award. RSU awards granted in 20192022 vest ratably, meaning that one-third of the award vests each year on the anniversary of the grant date, over a three-year period. If the NEO’s employment is terminated as a result of a change-in-control, an RSU award vests in full upon the later of such change-in-control or termination of employment and the common stock underlying the RSU shallwill be issued and delivered to the NEO. Any unvested portion of the RSU award is forfeited if the NEO’s employment is terminated for any reason other than death of the NEO, a qualifying disability, a qualifying retirement, or, with respect to an NEO who is a SVP at the time of grant, an eligible termination (as described below), including, without limitation, termination of service as a result of voluntary resignation or termination for cause. In the event of a termination of service by reason of death or a qualifying disability, whereby the NEO’s employment is terminated due to a total and permanent disability, the RSU award will vest in full and the common stock underlying the award will be issued to the NEO or in the case of death, the NEO’s legal representatives, heirs, legatees, or distributees. A qualifying retirement occurs in the event that an NEO, who is at least 55 years of age at the time of retirement, retires with more than 10 years of service to the Company. In such event, if the retirement occurs at least 12 months after the grant date, the unvested portion of an RSU award will continue to vest according to the vesting schedule. In addition to these rights, SVPs who are such at the time of the grant are also entitled to a pro-rata award in the event of an eligible termination, which means an involuntary termination of service in connection with the sale of a business segment, restructuring or reduction in workforce.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END FOR FISCAL YEAR ENDED DECEMBER 31, 20192022 | | | | | | Equity Incentive Plan Awards | |
| | Name | | | | Number of Shares
or Units of Stock that
Have Not Vested
(#)(1) | | | | Market Value of
shares or Units of
Stock that
Have Not Vested
($) | | | | Number of
Unearned Shares that
Have Not Vested
(#)(2) | | | | Market Value of
Unearned Shares that
Have Not Vested
($)(3) | | | | Mauricio Gutierrez | | | | 127,113 | | | | 4,044,736 | | | | 295,840 | | | | 9,413,629 | | | | Alberto Fornaro | | | | 21,749 | | | | 692,053 | | | | 41,552 | | | | 1,322,185 | | | | Brian Curci | | | | 16,930 | | | | 538,713 | | | | 36,455 | | | | 1,159,998 | | | | Elizabeth Killinger | | | | 23,640 | | | | 752,225 | | | | 55,722 | | | | 1,773,074 | | | | Christopher Moser | | | | 23,640 | | | | 752,225 | | | | 55,722 | | | | 1,773,074 | |
| | (1) | | | These amounts represent RSUs vested/vesting (inclusive of DERs) as follows: | |
| | Name | | | | Number
of RSUs
vested on
1/2/2023 | | | | Number
of RSUs
vesting on
6/1/2023 | | | | Number
of RSUs
vesting on
9/3/2023 | | | | Number
of RSUs
vesting on
1/2/2024 | | | | Number
of RSUs
vesting on
6/1/2024 | | | | Number
of RSUs
vesting on
9/3/2024 | | | | Number
of RSUs
vesting on
1/2/2025 | | | | Mauricio Gutierrez | | | | 56,519 | | | | — | | | | 5,232 | | | | 39,065 | | | | — | | | | 5,249 | | | | 21,048 | | | | Alberto Fornaro | | | | 4,790 | | | | 3,624 | | | | — | | | | 4,842 | | | | 3,635 | | | | — | | | | 4,858 | | | | Brian Curci | | | | 7,025 | | | | — | | | | 638 | | | | 5,276 | | | | — | | | | 640 | | | | 3,351 | | | | Elizabeth Killinger | | | | 10,889 | | | | — | | | | 734 | | | | 7,425 | | | | — | | | | 737 | | | | 3,855 | | | | Christopher Moser | | | | 10,889 | | | | — | | | | 734 | | | | 7,425 | | | | — | | | | 737 | | | | 3,855 | |
| | (2) | | | These amounts represent RPSUs vested/vesting (inclusive of DERs) as follows: | |
| | Name | | | | Number of RPSUs
vested on
1/2/2023 | | | | Number of RPSUs
vesting on
1/2/2024 | | | | Number of RPSUs
vesting on
6/1/2024 | | | | Number of RPSUs
vesting on
9/3/2024 | | | | Number of RPSUs
vesting on
1/2/2025 | | | | Mauricio Gutierrez | | | | 92,745 | | | | 82,485 | | | | — | | | | 25,636 | | | | 94,974 | | | | Alberto Fornaro | | | | — | | | | — | | | | 19,632 | | | | — | | | | 21,920 | | | | Brian Curci | | | | 9,373 | | | | 8,837 | | | | — | | | | 3,128 | | | | 15,117 | | | | Elizabeth Killinger | | | | 18,382 | | | | 16,349 | | | | — | | | | 3,599 | | | | 17,392 | | | | Christopher Moser | | | | 18,382 | | | | 16,349 | | | | — | | | | 3,599 | | | | 17,392 | |
| | (3) | | | Assumes achievement target award levels for 2020 RPSU, 2021 RPSU and 2022 RPSU awards as discussed in the CD&A. On January 2, 2023, the 2020 RPSU awards vested at 0% of target based on relative TSR performance over the three-year performance period. | |
TABLE OF CONTENTS | Option Awards | Stock Awards | Name | Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable | Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable | Option
Exercise
Price
($) | Option
Expiration
Date | Number of
Shares or
Units of
Stock that
Have Not
Vested
(#)(1) | Market Value
of shares or
Units of
Stock that
Have Not
Vested
($) | Equity Incentive Plan Awards | Number of
Unearned
Shares that Have
Not Vested
(#)(2) | Market Value
of Unearned
Shares that
Have
Not Vested
($)(3) | Mauricio Gutierrez | - | - | - | - | 134,452 | 5,344,467 | 398,934 | 15,857,627 | Kirkland Andrews | - | - | - | - | 34,108 | 1,355,793 | 101,304 | 4,026,834 | Elizabeth Killinger | 4,500 | - | 23.87 | 1/4/2020 | 26,880 | 1,068,480 | 79,723 | 3,168,989 | | 4,278 | - | 19.83 | 1/3/2021 | - | - | - | - | Christopher Moser | - | - | - | - | 23,072 | 917,112 | 62,019 | 2,465,255 | Brian Curci | - | - | - | - | 12,013 | 477,517 | 15,845 | 629,839 |
(1) These amounts represent RSUs vested/vesting as follows: | Name | Number of RSUs
vested on 1/2/2020 | Number of RSUs vested
on 1/3/2020 | Number of RSUs
vesting on 1/2/2021 | Number of RSUs
vesting on 1/2/2022 | Mauricio Gutierrez | 35,808 | 46,844 | 35,869 | 15,931 | Kirkland Andrews | 9,120 | 11,869 | 9,136 | 3,983 | Elizabeth Killinger | 7,192 | 9,324 | 7,206 | 3,158 | Christopher Moser | 7,150 | 5,601 | 7,163 | 3,158 | Brian Curci | 3,167 | 4,052 | 3,172 | 1,622 |
(2) These amounts represent RPSUs vested/vesting as follows: | | Name | Number of
RPSUs
vested on
1/3/2020 | Number of
RPSUs
vesting on
1/2/2021 | Number of
RPSUs
vesting on 1/2/2022 | Mauricio Gutierrez | 220,140 | 97,916 | 80,878 | Kirkland Andrews | 55,777 | 25,305 | 20,222 | Elizabeth Killinger | 43,814 | 19,878 | 16,031 | Christopher Moser | 26,320 | 19,668 | 16,031 | Brian Curci | - | 7,610 | 8,235 | (3) Assumes achievement at target award levels for 2018 RPSU, 2019 RPSU, and 2020 RPSU awards as discussed in the CD&A. On January 3, 2020, the 2017 RPSU awards vested at 200% of target based on relative TSR performance over the three-year performance period. |
OPTION EXERCISES AND STOCK VESTED FOR FISCAL YEAR ENDED DECEMBER 31, 20192022 | | Name | | | | Number of shares
Acquired on Vesting
(#)(1)(3) | | | | Value Realized on
Vesting
($)(2) | | | | Mauricio Gutierrez | | | | 126,218 | | | | 5,429,204 | | | | Alberto Fornaro | | | | 3,523 | | | | 160,261 | | | | Brian Curci | | | | 13,030 | | | | 560,326 | | | | Elizabeth Killinger | | | | 24,719 | | | | 1,063,735 | | | | Christopher Moser | | | | 24,719 | | | | 1,063,735 | |
| | (1) | | | Includes shares of DERs that vested and converted to common stock pursuant to underlying awards vested in 2022. | | | | (2) | | | Awards and DERs values that vested on January 2, 2022 are based on a share price of $43.08. Awards and DERs values that vested on June 1, 2022 are based on a share price of $45.49. Awards and DERs values that vested on September 3, 2022 are based on a share price of $41.47. | | | | (3) | | | Represents the following: | |
| | Name | | | | Number of
2019 RSUs
vested on
1/2/2022
(#) | | | | Number of
DERs
vested on
1/2/2022
(#) | | | | Number of
2020 RSUs
vested on
1/2/2022
(#) | | | | Number of
DERs
vested on
1/2/2022
(#) | | | | Number of
2021 RSUs
vested on
1/2/2022
(#) | | | | Number of
DERs
vested on
1/2/2022
(#) | | | | Number of
2021 RSUs
vested on
6/1/2022
(#) | | | | Number of
DERs
vested on
6/1/2022
(#) | | | | Number of
2021 RSUs
vested on
9/3/2022
(#) | | | | Number of
DERs
vested on
9/3/2022
(#) | | | | Number of
2019 RPSUs
vested on
1/2/2022
(#) | | | | Number of
DERs
vested on
1/2/2022
(#) | | | | Mauricio Gutierrez | | | | 15,980 | | | | 1,177 | | | | 16,118 | | | | 1,134 | | | | 16,653 | | | | 552 | | | | — | | | | — | | | | 4,955 | | | | 180 | | | | 64,702 | | | | 4,767 | | | | Alberto Fornaro | | | | — | | | | — | | | | — | | | | — | | | | — | | | | — | | | | 3,405 | | | | 118 | | | | — | | | | — | | | | — | | | | — | | | | Brian Curci | | | | 1,627 | | | | 119 | | | | 1,629 | | | | 114 | | | | 1,784 | | | | 59 | | | | — | | | | — | | | | 604 | | | | 21 | | | | 6,588 | | | | 485 | | | | Elizabeth Killinger | | | | 3,168 | | | | 233 | | | | 3,195 | | | | 224 | | | | 3,301 | | | | 109 | | | | — | | | | — | | | | 695 | | | | 25 | | | | 12,825 | | | | 944 | | | | Christopher Moser | | | | 3,168 | | | | 233 | | | | 3,195 | | | | 224 | | | | 3,301 | | | | 109 | | | | — | | | | — | | | | 695 | | | | 25 | | | | 12,825 | | | | 944 | |
TABLE OF CONTENTS | Option Awards | Stock Awards | Name | Number of shares
Acquired on
Exercise
(#) | Value Realized
on Exercise
($) | | Number of
shares
Acquired
on Vesting
(#)(1)(3) | | Value
Realized
on Vesting
($)(2) | Mauricio Gutierrez | - | - | | 656,901 | | 25,566,011 | Kirkland Andrews | - | - | | 144,003 | | 5,601,665 | Elizabeth Killinger | 9,922 | 185,002 | | 127,785 | | 4,972,851 | Christopher Moser | 20,300 | 374,764 | | 77,143 | | 3,000,662 | Brian Curci | - | - | | 9,995 | | 383,501 | (1) Includes shares of DERs that vested and converted to common stock pursuant to underlying awards vested in 2018. (2) Awards and DERs values that vested on January 2, 2019 are based on a share price of $38.11. Awards and DERs values that vested on January 3, 2019 are based on a share price of $37.75. Awards and DERs values that vested on January 4, 2019 are based on a share price of $39.04. (3) Represents the following: | Name | Number of
2016 RSUs
vested on
January 4,
2019 (#) | Number of
DERs vested
on January 4,
2019 (#) | Number of 2017
RSUs vested on
January 3, 2019
(#) | Number of
DERs vested
on January 3,
2019 (#) | Number of
2018 RSUs
vested on
January 2,
2019 (#) | Number of
DERs vested
on January 2,
2019 (#) | Number of
2016 MSUs
vested on
January 4,
2019 (#) | Number
of DERs
vested
on
January
4, 2019
(#) | Mauricio Gutierrez | 136,845 | 4,230 | 46,704 | 465 | 19,877 | 76 | 435,250 | 13,454 | Kirkland Andrews | 29,444 | 910 | 11,833 | 118 | 5,137 | 19 | 93,648 | 2,894 | Elizabeth Killinger | 26,532 | 820 | 9,295 | 92 | 4,035 | 15 | 84,388 | 2,608 | Christopher Moser | 15,662 | 484 | 5,584 | 55 | 3,992 | 15 | 49,812 | 1,539 | Brian Curci | 4,236 | 130 | 4,040 | 40 | 1,544 | 5 | - | - | | | | | | | | | | | | | | | |
PENSION BENEFITS FOR FISCAL YEAR ENDED DECEMBER 31, 20192022 None of the NEOs received qualified retirement income benefits for the fiscal year of 2019.Employment Agreements
2022. EMPLOYMENT AGREEMENTS Mr. Gutierrez serves as theour President and CEO of the Company pursuant to the terms of an employment agreement with the Company effective December 3, 2015. The term of the employment agreement will continue until the date that Mr. Gutierrez’s employment is terminated by either Mr. Gutierrez or the Company.
Each year, Mr. Gutierrez’s base salary will be reviewed and may be increased by the Board. The Board may decrease Mr. Gutierrez’s base salary solely in the case of an across the boardacross-the-board adjustment for senior executives, but not in excess of the same percentage as other senior executives as a group. Pursuant to the terms of the employment agreement, for the 20192022 fiscal year, Mr. Gutierrez is eligible to receive an annual incentive award with a target amount of up to 125% of his base salary, and an additional maximum incentive award with a target amount of up to 125% of his base salary, each based upon the achievement of criteria determined at the beginning of the fiscal year by the Compensation CommitteeBoard with input from Mr. Gutierrez.
The employment agreement also provides that Mr. Gutierrez is eligible to participate in the Company’s LTIP in accordance with its terms. For the 20202022 fiscal year, Mr. Gutierrez’s target LTIP award is 425%575% of his base salary. Mr. Gutierrez is also entitled to health, welfare and retirement benefits, term life insurance of $7.75 million, five weeks paid vacation, and coverage under the Company’s director and officer liability insurance coverage, in addition to reimbursement of reasonable business expenses, financial planning expenses, and disability insurance premiums. Mr. Gutierrez’s employment agreement also entitles him to certain severance payments and benefits in the event his employment terminates under certain circumstances. These severance payments and benefits are described and quantified under the section “Severance and Change-in-Control” below. In addition, under the employment agreement, the Company has agreed to indemnify Mr. Gutierrez against any claims arising as a result of his position with the Company to the maximum extent permitted by law.
The Company has not entered into employment agreements with NEOs other than Mr. Gutierrez. Severance and Change-In-Control
SEVERANCE AND CHANGE-IN-CONTROL Pursuant to his employment agreement, Mr. Gutierrez may be entitled to severance payments and benefits in the event of termination of employment, including termination following a change-in-control.
In the event Mr. Gutierrez’s employment with the Company is terminated by the Company “without cause” or by Mr. Gutierrez for “good reason” (including(including a reduction of his base salary), Mr. Gutierrez will be entitled to two2 times (2x) his base salary (without regard for any reduction of base salary); 50% of the bonus he would have received upon satisfaction of the underlying performance conditions, prorated for the number of days he was employed with the Company in the year of termination; reimbursement for COBRA benefits continuation cost for 18 months; and earned but unpaid base salary, bonuses, deferred compensation, vacation pay, and retirement benefits.
In the event Mr. Gutierrez’s employment with the Company is terminated by the Company “without cause” or by Mr. Gutierrez for “good reason” (including(including a reduction on his base salary), each within 24 months following a change-in-control, in lieu of the above severance benefits, Mr. Gutierrez will be entitled to three3 times (3x) the sum of (i) his base salary (without regard for any reduction of base salary) and (ii) his target annual bonus for the year of termination. Mr. Gutierrez will also be entitled to a payment equal to the bonus he would have received upon satisfaction of the underlying performance conditions, prorated for the number of days he was employed with the
Company in the year of termination; reimbursement for COBRA benefits continuation cost for 18 months; and earned but unpaid base salary, bonuses, deferred compensation, vacation pay, and retirement benefits.
In the event Mr. Gutierrez’s employment with the Company is terminated due to his death or disability, Mr. Gutierrez (or his estate) will be entitled to receive 50% of the target annual bonus, prorated for the number of days he was employed with the Company in the year of termination; and earned but unpaid base salary, bonuses, deferred compensation, vacation pay and retirement benefit.
As the Company has eliminated all tax gross-ups for all NEOs, if an excise tax under section 4999 of Internal Revenuethe Code (Code) would be triggered by any payments under the employment agreement or otherwise upon a change-in-control, the Company will either (a) pay Mr. Gutierrez any amounts subject to section 4999 of the Code (and Mr. Gutierrez will be responsible for the excise tax), or (b) reduce such payments so that no amounts are subject to section 4999 of the Code, whichever results in a better after-tax amount for Mr. Gutierrez (known as the “best net” approach).
Under Mr. Gutierrez’s employment agreement, Mr. Gutierrez agrees not to divulge confidential information and, during and for a period of one year after the termination of the employment agreement, disparage or compete with the Company, or solicit the customers or employees of the Company.
Under the CIC Plan, the NEOs other than Mr. Gutierrez are entitled to a general severance benefit equal to 1.5 times (1.5x) base salary in the event of involuntary termination without cause payable in a lump sum amount and reimbursement for COBRA benefits continuation cost for a period of 18 months.
The CIC Plan also provides a change-in-control benefit in the event that, within six months prior to or 24 months following a change-in-control, NEOthe NEO’s employment is either involuntarily terminated by the Company without cause or voluntarily terminated by the executive for good reason. The change-in-control benefit consists of an amount equal to 2.99 and 2.0 for Executive Vice Presidents and Senior Vice Presidents,SVPs, respectively, times the sum of the executive’s base salary plus the annual target incentive for the year of termination, payable in a lump sum amount; an amount equal to the NEO’s target bonus for the year of termination, prorated for the number of days during the performance period that the NEO was employed by the Company; and reimbursement for COBRA benefits continuation cost for a period of 18 months. In the event of a change-in-control, vesting of equity awards will not accelerate unless the NEO is terminated in connection with the change-in-control.
As with Mr. Gutierrez’s employment agreement, under the CIC Plan, the applicable executive agrees not to divulge confidential information and, during and for a period of one year after the termination of the employment agreement, disparage or compete with the Company, or solicit the customers or employees of the Company.
In general, a “change-in-control” occurs in the event: (a) any person or entity becomingbecomes the direct or indirect beneficial owner of 50% or more of the Company’s voting stock,stock; (b) directors serving on the Board as of a specified date cease to constitute at least a majority of the Board unless such directors are approved by a vote of at least two-thirds (2/3) of the incumbent directors, provided that a person whose assumption of office is in connection with an actual or threatened election contest or actual or threatened solicitation of proxies including by reason of agreement intended to avoid or settle such contest shall not be considered to be an incumbent director,director; (c) any reorganization, merger, consolidation, sale of all or substantially all of the assets of the Company or other transaction is consummated and the previous stockholders of the Company fail to own at least 50% of the combined voting power of the resulting entityentity; or (d) the stockholders approve a plan or proposal to liquidate or dissolve the Company. An involuntary termination for “cause” means the NEO’s termination by the Company because of (i) the NEO’s conviction of, or agreement to a plea of nolo contendere to, a felony or other crime involving moral turpitude,turpitude; (ii) willful failure to perform his or her duties or willful gross neglectnegligence or willful gross misconduct,misconduct; (iii) the NEO’s performance of any material act of theft, fraud, malfeasance or dishonesty,dishonesty; (iv) the NEO’s breach of any written
agreement between the NEO and the Company or a violation of the Company’s code of conduct or other written policies, andpolicy; or (v) any material breach of the NEO’s obligations to the Company with respect to confidentiality, non-competition, non-solicitation and non-disparagement. An involuntary termination for any other reason is without “cause.” A voluntary termination for “good reason” means the resignation of the NEO in the event of a material reduction in his or her compensation or benefits, a material diminution in his or her title, authority, duties or responsibilities, or the failure of a successor to the Company to assume the CIC Plan. In the case of Mr. Gutierrez only, a voluntary termination for “good reason” also includes any material failure by the Company to comply with his employment agreement, his removal from the Board, the failure to elect him to the Board during any regular election, or a change in reporting structure of the Company requiring Mr. Gutierrez to report to anyone other than the Board. The amount of compensation payable to each NEO in each circumstance is shown in the table below, assuming that termination of employment occurred as of December 31, 2019,2022, and including payments that would have been earned as of such date. However, the amounts shown below do not include benefits payable under the 401(k) plan. Named Executive Officer | Involuntary
Termination
Not
for Cause ($) | Voluntary
Termination
for
Good Reason
($) | Involuntary Not
for
Cause or
Voluntary
for Good
Reason
following
a Change-in-
Control ($) | Death
($) | Disability
($) | Mauricio Gutierrez | 3,443,194 | 3,443,194 | 31,827,669 | 22,209,475 | 22,209,475 | Kirkland Andrews | 1,066,718 | 1,066,718 | 9,624,528 | 6,122,851 | 6,122,851 | Elizabeth Killinger | 852,017 | 852,017 | 7,582,811 | 4,687,067 | 4,687,067 | Christopher Moser | 2,133,972(1) | 2,133,972(1) | 5,703,723 | 3,820,841 | 3,820,841 | Brian Curci | 1,415,764(1) | 1,415,764(1) | 2,379,560 | 1,344,302 | 1,344,302 | (1) Includes outstanding equity issued to the individual as an SVP, which contain termination provisions as described in more detail in the section of this CD&A entitled “Long-Term Incentive Compensation.” |
| | Name | | | | Involuntary
Termination
Not for Cause
($) | | | | Voluntary
Termination for
Good Reason
($) | | | | In Connection
with a
Change-in-
Control,
Involuntary
Termination
Not for
Cause or
Voluntary
Termination
for Good
Reason
($) | | | | Death or
Disability
($) | | | | Mauricio Gutierrez | | | | 3,726,177 | | | | 3,726,177 | | | | 24,721,781 | | | | 14,313,528 | | | | Alberto Fornaro | | | | 1,133,549 | | | | N/A | | | | 7,185,008 | | | | 2,746,294 | | | | Brian Curci | | | | 1,451,633 | | | | N/A | | | | 5,325,817 | | | | 2,210,494 | | | | Elizabeth Killinger | | | | 922,220 | | | | N/A | | | | 6,690,321 | | | | 3,113,641 | | | | Christopher Moser | | | | 633,451 | | | | N/A | | | | 4,254,579 | | | | 2,821,128 | |
We believe our executive compensation program must be internally consistent and equitable to motivate our employees to create stockholder value. We monitor the relationship between the compensation of our executive officers and the compensation of our non-managerial employees. For 2019,2022, the ratio of the total compensation of Mauricio Gutierrez, our President and CEO, of $9,146,053,$10,151,847, as shown in the Summary Compensation Table (CEO Compensation), was approximately 80 timesas compared to the total compensation of aour median employee of $121,958, calculated in the same manner, of $114,883.was 83:1. We calculated the ratio of the pay of our CEO to that of our median employee as permitted under SEC rules. We selected October 31, 2022 as the determination date for identifying the median employee for purposes of this pay ratio disclosure. As of DecemberOctober 31, 2019,2022, we and our consolidated subsidiaries had 4,613 6,551 employees in the United States, 148 employees in Canada, and 213194 employees located in Australia. As allowed under Item 402 of Regulation S-K, we excluded the 213342 employees in Australia and Canada from our median employee determination which representedsince they represent less than 5% of our total employees.employee population. For purposes of determining the median employee, we compared the total taxable wages as reported on each employee’s Form W-2 (U.S) as of December 31, 2019,2022, for all individuals, other than our CEO, who were employed by us on DecemberOctober 31, 20192022 (whether employed on a full-time, part-time, or seasonal basis). We then identified a median employee from that group for purposes of preparing the ratio of CEO pay to median employee pay. We calculated the compensation for our median employee based upon the same components of compensation used to determine CEO Compensation. We believe that the ratio of CEO Compensation to that of this median employee is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. Given the different methodologies that various public companies will use to determine an estimate of their pay ratio, the estimated ratio reported above should not be used as a basis for comparison between companies. Realized Pay
PAY VERSUS PERFORMANCE As noted in 2019NEOthe CD&A above, our Compensation Committee is committed to aligning compensation paid to executives with Company performance as well as the achievement of individual goals. Such alignment is reached through the use of both short-term and long-term incentives. Through the AIP, our NEOs are rewarded for achieving annual corporate and individual goals, while the long-term incentive compensation program is designed to reward our NEOs for long-term TSR performance, measured over a three-year period. As described in the CD&A, the Compensation Committee believes there are five important measures used to link compensation actually paid with our performance during the most recently completed fiscal year. In response to the SEC rules and regulations and to comply with the SEC’s disclosure requirements, the table below sets forth the Company-selected adjusted EBITDA performance metric along with the required TSR and net income metrics. Accordingly, the following table and related footnotes provide information regarding the relationship between NRG’s cumulative TSR relative to its peer performance group pursuant to SEC rules and regulations, as well as compensation actually paid relative to NRG’s TSR, net income, and adjusted EBITDA, over the three most recently completed fiscal years. As described in more detail in the CD&A, our Compensation Committee assesses target compensation and potentially realizable compensation in addition to compensation actually paid to maintain a fulsome understanding of executive total compensation packages.
In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, we provide the following disclosure regarding executive compensation for 2019 consisted of (i) base salary, earnedour principal executive officer (PEO) and paid duringNon-PEO NEOs and Company performance for the 2019 fiscal year, (ii) short-term incentive compensation pursuant to our AIP earned during the 2019 fiscal year, (iii) RSU awards that were granted in January 2017 and vested ratably over the three-year period, (iv) approximately two-thirds of RSUs that were granted in January 2018 and vested ratably in 2019 and 2020, (v) approximately one-third of RSUs that were granted in January 2019 and vested in 2020, and (vi) RPSU awards that were granted in January 2017, whose realized value at the end of the three-year performance period (January 3, 2020) was based upon the Company’s relative TSR performance over the three-year performance period following the grant date.years listed below. The Compensation Committee believes thatdid not consider the pay versus performance disclosure below in 2019,making its pay decisions for any of the Company’syears shown.
| | | | | | Summary
Compensation
Table
Total for
Mr. Gutierrez(1)
($) | | | | Compensation
Actually
Paid to
Mr. Gutierrez(1)(2)(3)
($) | | | | Average
Summary
Compensation
Table
Total for
Non-PEO
NEOs(1)
($) | | | | Average
Compensation
Actually
Paid to
Non-PEO
NEOs(1)2)(3)
($) | | | | Value of
Initial Fixed
$100 Investment
based on:(4) | | | | Net
Income
($ in millions) | | | | Adjusted
EBITDA
Achievement
($ in millions)(5) | | | | Year | | | | TSR
($) | | | | Peer
Group
TSR
($) | | | | | 2022 | | | | 10,151,847 | | | | (938,751) | | | | 2,484,712 | | | | 812,036 | | | | 88.79 | | | | 122.25 | | | | 1,221 | | | | 1,910 | | | | 2021 | | | | 10,854,224 | | | | 10,696,698 | | | | 2,042,570 | | | | 1,466,079 | | | | 116.01 | | | | 121.46 | | | | 2,187 | | | | 2,168 | | | | 2020 | | | | 9,879,276 | | | | 8,778,527 | | | | 2,159,739 | | | | 1,950,890 | | | | 97.86 | | | | 102.72 | | | | 510 | | | | 2,057 | |
| | (1) | | | Mr. Gutierrez was our PEO for each year presented. The individuals representing the Non-PEO NEOs for each year presented are listed below: | |
| | 2020 | | | | 2021 | | | | 2022 | | | | Elizabeth Killinger | | | | Alberto Fornaro | | | | Alberto Fornaro | | | | Robert Gaudette | | | | Elizabeth Killinger | | | | Brian Curci | | | | Christopher Moser | | | | Robert Gaudette | | | | Elizabeth Killinger | | | | Kirkland Andrews | | | | Christopher Moser | | | | Christopher Moser | | | | | | | | Gaetan Frotte | | | | | | | | | | | | Kirkland Andrews | | | | | |
| | (2) | | | The amounts shown for Compensation Actually Paid have been calculated in accordance with Item 402(v) of Regulation S-K of the SEC rules and do not reflect compensation actually earned, realized, or received by our NEOs. These amounts reflect the Summary Compensation Table Total with certain adjustments as described in footnote 3 below. | | | | (3) | | | Compensation Actually Paid reflects the exclusions and inclusions of certain amounts for the PEO and the Non-PEO NEOs as set forth below. Equity values are calculated in accordance with FASB ASC Topic 718, Compensation — Stock Compensation. Amounts in the Exclusion of Stock Awards column are the totals from the Stock Awards column set forth in the Summary Compensation Table. | |
| | Year | | | | Summary
Compensation
Table Total for
Mr. Gutierrez
($) | | | | Exclusion of
Stock Awards for
Mr. Gutierrez
($) | | | | Inclusion of
Equity Values for
Mr. Gutierrez
($) | | | | Compensation
Actually Paid to
Mr. Gutierrez
($) | | | | 2022 | | | | 10,151,847 | | | | (7,784,067) | | | | (3,306,531) | | | | (938,751) | | | | 2021 | | | | 10,854,224 | | | | (7,694,426) | | | | 7,536,900 | | | | 10,696,698 | | | | 2020 | | | | 9,879,276 | | | | (5,660,310) | | | | 4,559,561 | | | | 8,778,527 | |
| | Year | | | | Average
Summary
Compensation
Table
Total for
Non-PEO
NEOs
($) | | | | Average
Exclusion of
Stock
Awards for
Non-PEO
NEOs
($) | | | | Average
Inclusion of
Equity
Values for
Non-PEO
NEOs
($) | | | | Average
Compensation
Actually
Paid to
Non-PEO
NEOs
($) | | | | 2022 | | | | 2,484,712 | | | | (1,471,617) | | | | (201,059) | | | | 812,036 | | | | 2021 | | | | 2,042,570 | | | | (1,119,709) | | | | 543,218 | | | | 1,466,079 | | | | 2020 | | | | 2,159,739 | | | | (1,073,387) | | | | 864,537 | | | | 1,950,890 | |
The amounts in the Inclusion of its NEOs was aligned with ourEquity Values in the tables above are derived from the amounts set forth in the following tables: | | Year | | | | Year-End
Fair Value
of Equity
Awards
Granted
During Year
That
Remained
Unvested
as of
Last Day of
Year for
Mauricio
Gutierrez
($) | | | | Change in
Fair Value
from Last
Day of
Prior Year
to Last
Day of
Year of
Unvested
Equity
Awards
for Mauricio
Gutierrez
($) | | | | Change in
Fair Value
from Last
Day of
Prior Year
to Vesting
Date of
Unvested
Equity
Awards
that Vested
During
Year for
Mauricio
Gutierrez
($) | | | | Fair Value
at Last Day
of Prior
Year of
Equity Awards
Forfeited
During
Year for
Mauricio
Gutierrez
($) | | | | Total —
Inclusion of
Equity
Values for
Mauricio
Gutierrez
($) | | | | 2022 | | | | 5,316,459 | | | | (8,620,215) | | | | (2,775) | | | | 0 | | | | (3,306,531) | | | | 2021 | | | | 8,049,370 | | | | (512,470) | | | | 0 | | | | 0 | | | | 7,536,900 | | | | 2020 | | | | 6,145,611 | | | | (796,991) | | | | (789,059) | | | | 0 | | | | 4,559,561 | |
| | Year | | | | Average
Year-End
Fair Value
of Equity
Awards
Granted
During
Year That
Remained
Unvested as of
Last Day
of Year
for Non-PEO
NEOs
($) | | | | Average
Change in
Fair Value
from
Last Day
of Prior
Year to
Last Day
of Year
of Unvested
Equity
Awards for
Non-PEO
NEOs
($) | | | | Average
Change in
Fair Value
from Last
Day of
Prior Year
to Vesting
Date of
Unvested
Equity
Awards
that Vested
During
Year
for Non-PEO
NEOs
($) | | | | Average
Fair Value
at Last Day
of Prior
Year of
Equity
Awards
Forfeited
During
Year for
Non-PEO
NEOs
($) | | | | Total —
Average Inclusion of
Equity Values
for Non-PEO
NEOs
($) | | | | 2022 | | | | 1,005,102 | | | | (1,208,530) | | | | 2,368 | | | | 0 | | | | (201,059) | | | | 2021 | | | | 1,009,308 | | | | (50,607) | | | | 0 | | | | (415,483) | | | | 543,218 | | | | 2020 | | | | 1,165,415 | | | | (157,279) | | | | (143,599) | | | | 0 | | | | 864,537 | |
| | (4) | | | The Peer Group TSR set forth in this table utilizes the Philadelphia Utility Sector Index (UTY), which we also utilize in the stock performance graph required by Item 201(e) of Regulation S-K of the SEC rules included in our Annual Report for the fiscal year ended December 31, 2022. The comparison assumes $100 was invested for the period starting December 31, 2019, through the end of the listed year in NRG and in the UTY, respectively. Historical stock performance is not necessarily indicative of future stock performance. | | | | (5) | | | For purposes of compliance with the SEC rules and regulations, we indicated in the table above Adjusted EBITDA Achievement to be the most important financial performance measure used to link Company performance to Compensation Actually Paid to our PEO and Non-PEO NEOs in 2022. Adjusted EBITDA Achievement is a non-GAAP measure that refers to EBITDA plus Adjustments and is defined in the “2022 AIP Award Performance Criteria” section of the CD&A for each of the listed years. | |
DESCRIPTION OF RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND TSR The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our stockholder interests. Duringcumulative TSR over the three-year periodthree most recently completed fiscal years: DESCRIPTION OF RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND NET INCOME The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of January 1, 2017 through December 31, 2019,Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the Company’sthree most recently completed fiscal years:
DESCRIPTION OF RELATIONSHIP BETWEEN COMPENSATION ACTUALLY PAID AND ADJUSTED EBITDA ACHIEVEMENT The following chart sets forth the relationship between Compensation Actually Paid to our PEO, the average of Compensation Actually Paid to our Non-PEO NEOs, and our Adjusted EBITDA Achievement during the three most recently completed fiscal years: DESCRIPTION OF RELATIONSHIP BETWEEN COMPANY TSR increased 228% with an accompanying increase of $7.5 billion in market capitalization.By way of comparison,AND PEER GROUP TSR
The following chart compares our cumulative TSR over the CEO’s target compensation over this period was $9.1 million comprised of $1.3 million in 2019 base salary, $1.6 million with respectthree most recently completed fiscal years to the CEO’s 2019 target AIP Award, $2.7 million in GDFV for the CEO’s 2017 target RPSU award, and $3.5 million of GDFV in RSU awards. The RSU GDFV includes the full valuethat of the 2017 ratable vesting RSU award, two-thirds of the 2018 ratable vesting RSU award, and one-third of the 2019 ratable vesting RSU award. The CEO’s realized compensation was $27.8 million comprised of $1.3 million in 2019 base salary, $2.3 million in 2019 realized AIP Award, $17 million in RPSU vested value, and $7.1 million in RSU vested value. Over 95% of the incremental difference between CEO target and realized value is driven by NRG’s exceptional TSR performanceUTY over the period.same period:
TABULAR LIST OF MOST IMPORTANT FINANCIAL AND NON-FINANCIAL PERFORMANCE MEASURES The following table presents the financial and non-financial performance measures that the Compensation Committee considers to have been the most important in linking Compensation Actually Paid to our PEO and Non-PEO NEOs for 2022 to Company performance. The measures listed in this table are not ranked. Compensation Committee Report on Executive Compensation
| | Adjusted EBITDA
Adjusted Free Cash Flow (before growth)
Credit Ratio
ESG
Relative TSR
| | |
Compensation Committee Report on Executive Compensation The Compensation Committee has reviewed and discussed the Compensation Discussion and AnalysisCD&A included in this Proxy Statement required by Item 402(b) of Regulation S-K with management and, based upon such review and discussion, the Compensation Committee has recommended to the Board that the Compensation Discussion and AnalysisCD&A be included in this Proxy Statement. Compensation Committee: E. Spencer Abraham, Chair Antonio Carrillo Matthew Carter, Jr. Heather Cox Paul W. Hobby
| Compensation Committee:
| | | | E. Spencer Abraham, Chair
| | Antonio Carrillo
| | Heather Cox
| | Anne C. Schaumburg
|
Compensation Committee Interlocks and Insider Participation | |
No member of our Compensation Committee has served as one of our officers or employees at any time. None of our executive officers serves as a member of the compensation committee of any other company that has an executive officer serving as a member of the Board. None of our executive officers serves as a member of the board of directors of any other company that has an executive officer serving as a member of our Compensation Committee.
The primary purpose of the Audit Committee is to assist the Board in its general oversight of the Company’s financial reporting process. The Audit Committee’s function is more fully described previously in this Proxy Statement and in its charter. The Audit Committee reviews the charter on an annual basis. The Board annually reviews the New York Stock ExchangeNYSE listing standards’ definition of independence for audit committee members and has determined that each member of the Audit Committee meets that standard. The Board has also determined that twothree of the threefour members of the Audit Committee, Anne C. Schaumburg, and Antonio Carrillo, and Alexandra Pruner met the requirements of an “audit committee financial expert.” The Board has further determined that Matthew Carter, Jr.Paul W. Hobby met the “financial literacy” requirements set forth in the listing standards under the New York Stock Exchange.NYSE. Management is responsible for the preparation, presentation, and integrity of the Company’s financial statements, accounting and financial reporting principles, internal controls and procedures designed to ensure compliance with accounting standards, applicable laws, and regulations. The Company’s independent registered public accounting firm for the fiscal year 2019,2022, KPMG LLP, is responsible for performing an independent audit of the consolidated financial statements and expressing an opinion on the conformity of those financial statements with generally accepted accounting principles and auditing the Company’s internal control over financial reporting.
The Audit Committee has reviewed and discussed the audited financial statements of the Company for the fiscal year ended December 31, 20192022 with the Company’s management and has discussed with KPMG LLP the matters required to be discussed by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB). In addition, KPMG LLP has provided the Audit Committee with the written disclosures and the letter required by Statement on the PCAOB Auditing Standard No. 1301, “Communication with Audit Committees,” and the Audit Committee has discussed with KPMG LLP their independence. The Audit Committee also reviewed, and discussed with management and KPMG LLP, management’s report and KPMG LLP’s report and attestation on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002.
Based on these reviews and discussions, the Audit Committee recommended to the Board that the audited financial statements be included in the Company’s Annual Report on Form 10-K, for the fiscal year ended December 31, 2019, for filing with the Securities and Exchange Commission. | Audit Committee:
| |
| | Anne C. Schaumburg, Chair
| | Antonio Carrillo
| | Matthew Carter, Jr.
|
SEC.Audit Committee: Anne C. Schaumburg, Chair Antonio Carrillo Alexandra Pruner Paul W. Hobby
Independent Registered Public Accounting Firm The following table presents fees for professional services rendered by KPMG LLP, our principal independent registered public accounting firm, for the years ended December 31, 2018,2022, and December 31, 2019. | | Year Ended December 31, | | | | 2019 | | 2018 | | | | (In thousands) | | Audit Fees | | $ | 8,081 | | $ | 12,301 | | Audit-Related Fees | | — | | — | | Tax Fees | | 2,831 | | 4,980 | | All Other Fees | | — | | — | | Total | | $ | 10,912 | | $ | 17,281 | |
2021. | | | | | Year Ended December 31, | | | | | | | 2022 | | | | 2021 | | | | | | | (in thousands) | | | | Audit Fees | | | | $ | 9,904 | | | | | | $ | 9,367 | | | | | Audit-Related Fees | | | | | 1,642 | | | | | | | — | | | | | Tax Fees | | | | | 1,653 | | | | | | | 1,505 | | | | | All Other Fees | | | | | — | | | | | | | — | | | | | Total | | | | $ | 13,199 | | | | | | $ | 10,872 | | |
For 20192022 and 20182021 audit services, KPMG LLP billed us approximately $8,081,000$9,904,000 and $12,300,900,$9,367,000, respectively, for the integrated audit of the Company’s annual consolidated financial statements, internal control over financial reporting, and the review of the Company’s quarterly consolidated financial statements on Form 10-Q that are customary under the standards of the Public Company Accounting Oversight BoardPCAOB (United States), and in connection with subsidiary financial statement audits. The audit AUDIT-RELATED FEES Audit-related fees for 2019 includerelate to due diligence services in connection with mergers and acquisitions. For 2022, audit-related services, KPMG LLP billed us approximately $1,275,000 of audit fees incurred by NRG South Central Generating LLC as part of the Company’s sale of its South Central portfolio to Cleco Corporate Holdings LLC, which amounts$1,642,000. There were paid directly by Cleco Corporate Holdings LLC. The audit fees for 2018 include approximately $2,510,400 of audit fees incurred by Clearway and certain of its consolidated subsidiaries, which amounts were paid directly by Clearway or such consolidated subsidiary, as applicable.AUDIT-RELATED FEES
Nono audit-related fees were billed to us by KPMG LLP for 2019 and 2018.
2021. Tax fees relate to services provided for tax compliance, tax planning, advice on mergers and acquisitions, technical assistance, and advice on both domestic and international matters. For 20192022 and 20182021 tax services, KPMG LLP billed us approximately $2,830,700$1,653,000 and $4,980,062,$1,505,000, respectively.
There were no other fees billed to us by KPMG LLP for 20192022 and 2018.2021.
POLICY ON AUDIT COMMITTEE PRE-APPROVAL The Audit Committee is responsible for appointing, setting compensation for, and overseeing the work of the independent registered public accounting firm. The Audit Committee has established a policy regarding pre-approvalpre- approval of all audit and permissible non-audit services provided by the independent registered public accounting firm.
The Audit Committee annually reviews and pre-approves services that are expected to be provided by the independent registered public accounting firm. The term of the pre-approval is 12 months from the date of the pre-approval, unless the Audit Committee approves a shorter time period. The Audit Committee may periodically amend and/or supplement the pre-approved services based on subsequent determinations.
Unless the Audit Committee has pre-approved Audit Services or a specified category of non-audit services, any engagement to provide such services must be pre-approved by the Audit Committee if it is to be provided by the independent registered public accounting firm. The Audit Committee must also pre-approve any proposed services exceeding the pre-approved budgeted fee levels for a specified type of service.
The Audit Committee has authorized its Chair to pre-approve services in amounts up to $500,000 per engagement. Engagements exceeding $500,000 must be approved by the full Audit Committee. Engagements pre-approved by the Chair of the Audit Committee are reported to the Audit Committee at its next scheduled meeting. The Audit Committee pre-approved all services rendered by and associated fees paid to the KPMG LLP for 2022 and 2021.
WHAT IS THE PURPOSE OF THE ANNUAL MEETING? The purpose of the Annual Meeting is to:
1.
2.
adopt the ESPP; 3.
approve, on a non-binding advisory basis, the Say on Pay Proposal; 3.
4.
vote, on a non-binding advisory basis, the Say on Frequency Proposal; 5.
ratify the KPMG LLP AppointmentRatification Proposal; and 4.
6.
conduct such other business as may properly come before the Annual Meeting and any adjournment or postponement.
Other than these proposals, the Board is not aware of any other matters to be presented for a vote at the Annual Meeting.
WHO IS ENTITLED TO VOTE AT THE ANNUAL MEETING? All of our stockholders may attend the Annual Meeting. However, only stockholders who owned our common stock at the close of business on March 2, 2020,6, 2023, the record date for the Annual Meeting, or their duly appointed proxies, are entitled to vote at the Annual Meeting.
Many stockholders hold their shares through a stockbroker, bank, trustee, or other nominee rather than directly in their own name. As summarized below, there are some distinctions between shares held of record and those owned beneficially: ·
•
Stockholder of Record — If your shares are registered directly in your name with our transfer agent, Computershare, you are considered the stockholder of record of those shares. ·
•
Beneficial Owner — If your shares are held in a stock brokerage account, or by a bank, trustee, or other nominee, you are considered the beneficial owner of shares held in “street name.” As the beneficial owner, you have the right to direct your broker, trustee or nominee on how to vote and you are also invited to attend the Annual Meeting. However, since you are not the stockholder of record, you may not vote these shares in person atonline during the Annual Meeting unless you follow the procedures of your broker, trustee or nominee for obtaining a legal proxy. Your broker, trustee, or nominee is obligated to provide you with a voting instruction card for you to use to vote in person atduring the annual meeting.Annual Meeting.
HOW MANY VOTES DO I HAVE? You have one vote for each share of our common stock you owned as of the record date for the Annual Meeting.
WHAT ARE THE RECOMMENDATIONS OF THE BOARD OF DIRECTORS? The Board recommends a vote:
1.
FOR the election of the director nominees;
2.
FOR the adoption of the ESPP; 3.
FOR the approval, on a non-binding advisory basis, of the Say on Pay Proposal; 4.
ONE YEAR for the Say on Frequency Proposal; and 3.
5.
FOR the ratification of the KPMG LLP AppointmentRatification Proposal.
If you grant a proxy and any additional matters are properly presented for a vote at the Annual Meeting, either of the persons named as proxy holders, Mauricio Gutierrez or Christine A. Zoino, will have the discretion to vote your shares.
HOW MANY VOTES MUST BE PRESENT TO HOLD THE ANNUAL MEETING? We will have a quorum, and will be able to conduct the business of the Annual Meeting, if the holders of a majority of the outstanding shares of our common stock entitled to vote at the Annual Meeting are represented in person or by proxy at the Annual Meeting. As of the record date, 250,541,807232,269,883 shares of our common stock, representing the same number of votes, were outstanding. The presence of the holders of at least 125,270,905116,134,942 shares of our common stock will be required to establish a quorum. Both abstentions and broker non-votes, if any, are counted as present for determining the presence of a quorum. For more information regarding the treatment of abstentions and broker non-votes, see “What are abstentions and broker non-votes and how are they treated?”
WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?Proposal
| Treatment of Abstentions
| Treatment of
Broker Non-
Votes
| 1.Election of Directors
| Not considered votes properly cast and therefore will have no effect on this proposal.
| No effect on this proposal.
| 2.Say on Pay Proposal
| Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal.
| No effect on this proposal.
| 3.Ratification of KPMG LLP’s Appointment
| Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal
| Not applicable since brokers have discretionary authority to vote on this proposal.
|
1.
Election of Directors — The nominees for election as directors at the Annual Meeting will be elected by a majority of the votes cast at the Annual Meeting. A majority of the votes cast means that the number of shares voted “FOR” the director nominee must exceed the number of votes cast “AGAINST” that director nominee. In a contested election, each director nominee will be elected by the vote of a plurality of the shares represented in person or by proxy at the Annual Meeting and entitled to vote on the election of directors. This means that the director nominees who receive the most votes will be elected to fill the available seats on the Board.
2.
Adoption of the ESPP — This proposal requires the affirmative vote of a majority of the votes cast on this proposal. 3.
Say on Pay Proposal — This proposal requires the affirmative vote of a majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. While this is an advisory vote, the Board and the Compensation Committee value the opinions of stockholders and if there are a significant number of votes against this proposal, the Board and the Compensation Committee will consider stockholders’ concerns and evaluate actions necessary to address those concerns. 3.Ratification
4.
Say on Frequency Proposal — This proposal requires the affirmative vote of the majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal for one of the frequency options (one, two or three years). If none of the frequency options receive the affirmative vote of
the majority of the shares of our common stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal, the frequency option that receives the highest number of votes cast will be considered to be the frequency selected by stockholders. Although this vote is advisory and therefore not binding on the Company, the Board and the Compensation Committee value the opinions of stockholders and will consider the outcome of this advisory vote. 5.
KPMG LLP AppointmentRatification Proposal — This proposal requires the affirmative vote of a majority of shares present in person or represented by proxy at the Annual Meeting and entitled to vote on the proposal. If the selection of KPMG LLP as our independent registered public accounting firm is not ratified, the Audit Committee will reconsider its selection.
WHAT ARE ABSTENTIONS AND BROKER NON-VOTES AND HOW ARE THEY TREATED? An abstention occurs when a stockholder abstains from voting or does not vote on a proposal. A “broker non-vote”non- vote” occurs when a broker has not received voting instructions from the beneficial owner and the broker does not have discretionary authority to vote the shares because the proposal is non-routine. Brokers who do not receive instructions from the beneficial owner are entitled to vote on the ratification of KPMG LLP’s appointment for the 2020 fiscal year,LLP Ratification Proposal, but not on the other proposals. Broker non-votes and abstentions, if any, will be treated as follows with respect to votes on each of the proposals:
| | Proposal | | | | Treatment of Abstentions | | | | Treatment of Broker Non-Votes | | | | 1. Election of Directors | | | | Not considered votes properly cast and therefore will have no effect on this proposal. | | | | No effect on this proposal. | | | | 2. Adoption of the ESPP | | | | Not considered votes properly cast and therefore will have no effect on this proposal. | | | | No effect on this proposal. | | | | 3. Say on Pay Proposal | | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal. | | | | No effect on this proposal. | | | | 4. Say on Frequency Proposal | | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal. | | | | No effect on this proposal. | | | | 5. KPMG LLP Ratification Proposal | | | | Counted toward the tabulation of votes on this proposal and will have the same effect as a vote AGAINST this proposal. | | | | Not applicable since brokers have discretionary authority to vote on this proposal. | |
HOW DO I VOTE?VOTE BEFORE THE ANNUAL MEETING? If you hold shares directly as the stockholder of record, you may vote by granting a proxy or, if you hold shares in street name (through a bank, broker, trustee or other nominee), by submitting voting instructions to your bank, broker, trustee, or nominee. You may vote over the Internet, by telephone, by mail if you have a paper copy of the proxy materials, or in person atonline during the Annual Meeting. Please refer to the summary instructions below and those included on your proxy card or, for shares held in street name, the voting instruction card included by your bank, broker, trustee, or nominee. ·
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Vote by Internet:Internet before the Annual Meeting: If you have Internet access, you may submit your proxy from any location in the world 24 hours a day, 7 days a week, up until 11:59 p.m., Eastern Time on April 29, 202026, 2023 by visiting the website provided on the Notice of Internet Availability of Proxy Materials (Notice of Availability) or voting instruction card. If you vote by using the Internet, you do not need to return your proxy card or voting instruction card. ·
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Vote by Telephone:Telephone: You may use any touch-tone telephone to vote your proxy toll-free 24 hours a day, 7 days a week, up until 11:59 p.m., Eastern Time on April 29, 2020.26, 2023. The telephone number is printed on your proxy card or voting instruction card. If you vote by telephone, you do not need to return your proxy card or voting instruction card. ·
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Vote by Mail:Mail: If you received or requested a paper copy of the materials, you may submit your proxy by signing your proxy card or, for shares held in street name, the voting instruction card included by your broker, trustee, or nominee, and mailing it in the enclosed, postage-paid, addressed envelope. If you provide specific voting instructions, your shares will be voted as you instruct. If you sign, but do not provide instructions, your shares will be voted as the Board recommends. Mark, sign, and date your proxy card and return it in the postage-paid envelope provided as soon as possible as it must be received by the Company prior to April 30, 2020,27, 2023, the Annual Meeting date. ·
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Vote In-Person:by Internet during the Annual Meeting: For information on how record holders and beneficial owners of shares held in street namestockholders can vote in person,during the Annual Meeting, please refer to “How can I vote atduring the Annual Meeting if I attend in person?Meeting?” below. Record holders, beneficial owners and legal proxy holders should also refer to “What should I bring to the Annual Meeting if I attend in person?” below for the Annual Meeting admission and voting requirements. Stockholders holding shares in a joint account may attend the meeting if they provide proof of joint ownership, and if each Stockholder follows the admission requirements described below.
You may change your proxy instructions or revoke your proxy at any time prior to the vote at the Annual Meeting. For shares held directly in your name, youYou may accomplish this by: (a) delivering a written notice of revocation bearing a later date than the proxy being revoked, (b) signing and delivering a later dated written proxy relating to the same shares, or (c) attending the Annual Meeting and voting in person (although attendanceonline during the Annual Meeting (attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). For shares held in street name, you may change your vote by submitting new voting instructions to your bank, broker, trustee, or nominee, or by obtaining a legal proxy from your broker and voting your shares by ballot at the Annual Meeting.WHAT SHOULD
HOW CAN I BRING TOVOTE DURING THE ANNUAL MEETING IF I ATTEND IN PERSON?Registration forMEETING?
To participate and vote during the virtual meeting, visit www.virtualshareholdermeeting.com/NRG2023 and enter the 16-digit control number included in your Notice of Internet Availability of proxy materials, proxy card or the instructions that accompanies your proxy materials. You may begin to log into the meeting platform beginning at 8:45 a.m. Eastern Time on Thursday, April 27, 2023. The Annual Meeting will begin promptly at 89:00 a.m., Central Time. Please allow ample Eastern Time on Thursday, April 27, 2023. The virtual meeting platform is supported across browsers and devices running the most updated version of applicable software and plug-ins. Participants should plan for a sufficient time for check-in. No cameras, recording equipment, electronic devices, large bags, briefcases or packages will be permittedto log in and ensure they have a strong internet connection and can hear streaming audio prior to the start of the Annual Meeting. For admission to If you encounter technical difficulties with the virtual meeting platform on the day of the Annual Meeting, all individuals attending must provide personal identification (such as a driver’s license or passport), as well asplease call the following:If you are a record holder (i.e., you hold your shares through our transfer agent, Computershare), you must bring either a copy of the proxy card you received as part of your proxy materials, a copy of your Computershare account statement indicating your ownership of our common stock as of the record date, or the Notice of Availability, if you received one.
If you hold your shares in street name (i.e., through a bank, broker, trustee or other nominee), you must bring either the voting instruction card you received from your bank, broker, trustee or other nominee as part of your proxy materials, a copy of your brokerage statement indicating your ownership of our common stock as of the record date, or the Notice of Availability, if you received one.
If you are not a stockholder but are attending the meeting as proxy for a stockholder, you must bring a valid legal proxy. If you attend as a proxy for a record holder, you must present a valid legal proxy from the record holder to you. If you attend as a proxy for a street name holder, you must present a valid legal proxy from the record holder (i.e., the bank, broker, trustee or other nominee) to the street name holdertechnical support number that is assignable, as well as a valid legal proxy from the street name holder to you. Stockholders may only appoint one proxy holder to attendwill be posted on the Annual Meeting on their behalf.
HOW CAN I VOTE AT THE ANNUAL MEETING IF I ATTEND IN PERSON?
Beneficial Owners - If you are a beneficial ownerwebsite. Technical support will be available starting at 8:45 a.m. Eastern Time and until the end of shares held in street name and wish to vote your shares in person at the Annual Meeting, you will need to ask your bank, broker, trustee or other nominee to furnish you with a legal proxy. You will need to bring proof of ownership as described above and the legal proxy with you to the Annual Meeting and hand it in with a signed ballot that will be provided to you at the Annual Meeting. You will not be able to vote your shares at the Annual Meeting without a legal proxy. If you do not have a legal proxy, you can still attend the Annual Meeting, but you will not be able to vote your shares at the Annual Meeting. Accordingly, we encourage you to vote your shares in advance, even if you intend to attend the Annual Meeting. Please note that if you request a legal proxy, any previously executed proxy will be revoked, and your vote will not be counted unless you appear at the Annual Meeting and vote in person or legally appoint another proxy to vote on your behalf.
Record Holders - If you are a record holder and wish to vote your shares in person at the Annual Meeting, you will need to bring proof of ownership as described above and a ballot will be provided to you at the Annual Meeting.
WHAT HAPPENS IF I DO NOT PROVIDE INSTRUCTIONS AS TO HOW TO VOTE? If you sign your proxy card or voting instruction card with no further instructions, your shares will be voted in accordance with the recommendations of the Board.
WHERE CAN I OBTAIN THE LIST OF STOCKHOLDERS ENTITLED TO VOTE? The names of stockholders of record entitled to vote at the Annual Meeting will be available at the Annual Meeting and for 10 days prior to the Annual Meeting for any purpose germane to the Annual Meeting, between the hours of 8:30 a.m. and 5:00 p.m. , Eastern Time at our principal executive officesoffice at 804 Carnegie Center, Princeton, New Jersey 08540. Please contact our Corporate Secretary if you wish to review the list of stockholders at our principal executive offices.office. HOW CAN I ASK QUESTIONS DURING THE ANNUAL MEETING? Only our stockholders as of March 6, 2023 are permitted to ask questions during the Annual Meeting. If you wish to submit a question during the Annual Meeting, log into the virtual meeting platform at www.virtualshareholdermeeting.com/NRG2023, type your question into the “Ask a Question” field, and click “Submit.” Questions relevant to Annual Meeting matters will be answered during the Annual Meeting, subject to time constraints. Generally, stockholder questions must be relevant to the agenda items then before the Annual Meeting. Stockholder questions or remarks must be pertinent to matters addressed at the Annual Meeting. Questions from multiple stockholders on the same topic or that are otherwise related may be grouped, summarized and answered together. WHO PAYS THE COST OF SOLICITATION OF PROXIES? We will pay for the cost of preparing, assembling, printing, mailing and distributing these proxy materials. Our directors, officers and employees may solicit proxies or votes in person, by telephone, or by electronic communication. Such individuals will not receive any additional compensation for these solicitation activities. We have retained MacKenzie Partners, Inc. to assist us in soliciting your proxy for an estimated fee of $27,500, plus reasonable out-of-pocket expenses. We will also reimburse brokerage houses and other custodians, nominees, and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and any other solicitation materials to beneficial owners of our common stock.
WHO IS THE COMPANY’S TRANSFER AGENT? Our transfer agent is Computershare. All communicationsCorrespondence concerning stockholder inquiries can be handled by contacting NRG Energy, Inc. c/o Computershare, Computershare Investor Services, P.O. Box 505000, Louisville, Kentucky 40233-5000,43078, Providence, Rhode Island 02940-3078, or by telephone at 1-877-498-8861, or 1-781-575-2725 (outside the U.S. and Canada), or (800) 952-9245 (Hearing Impaired-TTY).866-214-2213. Their website is: http://www.computershare.com. Certificates for transfer and address changes should be sent to: Computershare, P.O. Box 505000, Louisville, Kentucky 40233-5000.BOX 43078, Providence, Rhode Island 02940-3078. Overnight correspondence should be sent to Computershare, 150 Royall St., Suite 101, Canton, Massachusetts 02021. 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? Pursuant to rules adopted by the SEC, we are using the Internet as the primary means of furnishing proxy materials to stockholders. Accordingly, we are sending a Notice of Availability to our stockholders. All stockholders will have the ability to access the proxy materials on the website referred to in the Notice of Availability or request a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to request a
printed copy may be found in the Notice of Availability. In addition, stockholders may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. We encourage stockholders to take advantage of the availability of the proxy materials on the Internet to help reduce the environmental impact of our annual meetings. WHERE CAN I FIND DIRECTIONS TO THE ANNUAL MEETING?
Directions to the Annual Meeting can be found on https://jwmarriotthotelhouston.com.
We have adopted a procedure approved by the SEC called “householding.” Under this procedure, multiple stockholders who share the same last name and address and do not participate in electronic delivery will receive only one copy of the proxy materials or the Notice of Availability. We have undertaken householding to reduce our printing costs and postage fees. Stockholders may elect to receive individual copies of the proxy materials or Notice of Availability at the same address by contacting Broadridge Financial Solutions, Inc. by telephone at 1-866-540-7095, by mail at Broadridge Financial Solutions, Inc., Householding Department, 51 Mercedes Way, Edgewood, New York 11717, or by e-mail at sendmaterial@proxyvote.com. Stockholders who are receiving individual copies of such materials and who would like to receive single copies at a shared address may contact Broadridge Financial Solutions, Inc. with this request by using the contact information provided above.
HOW CAN I REQUEST ADDITIONAL MATERIALS? Stockholders may request additional copies of the proxy materials or Notice of Availability by contacting Broadridge Financial Solutions, Inc. by telephone at 1-800-579-1639 or by e-mail at sendmaterial@proxyvote.com.
WHOM SHOULD I CALL IF I HAVE QUESTIONS ABOUT THE ANNUAL MEETING? If you have any questions or need any assistance in voting your shares, please contact our proxy solicitor:
MacKenzie Partners, Inc.
1407 Broadway, 27th Floor
New York, New York 10018
Toll Free: (800) 322-2885
Collect: (212) 929-5500Fax: (212) 929-0308
929-5500 Fax: (646) 439-9201 Email: proxy@mackenziepartners.com
TABLE OF CONTENTSStockholder Proposals and Director Nominations for the 2021 Annual Meeting of Stockholders
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Stockholder Proposals for Inclusion in the Proxy Materialsand Director Nominations for the 2021 2024 Annual Meeting of Stockholders In order for a stockholder proposal to be considered for inclusion in our proxy materials for the 2021 Annual Meeting of Stockholders (2021 Annual Meeting), our Corporate Secretary must receive the proposal no later than the close of business on November 16, 2020, the 120th day prior to the first anniversary of the date on which this Proxy Statement was first released to our stockholders in connection with this year’s Annual Meeting. If we change the date of the 2021 Annual Meeting by more than 30 days from the anniversary of this year’s Annual Meeting, stockholder
All proposals must be received a reasonable time before we begin to print and mail the proxy materials for the 2021 Annual Meeting in order to be considered for inclusion in the proxy materials.Proposalsdiscussed below must be sent via registered, certified, or express mail (or other means that allows the stockholder to determine when the proposal was received by the Corporate Secretary) to the Corporate Secretary, NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540. Proposals must contain the information required under our Bylaws, as applicable, a copy of which is available upon request to our Corporate Secretary, and also must comply with the SEC’s regulations regarding the inclusion of stockholder proposals in company-sponsored proxy materials.
Director Nomineesmaterials, as applicable.
STOCKHOLDER PROPOSALS FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS In order for Inclusiona stockholder proposal to be considered for inclusion in the Proxy Materialsour proxy materials for the 20212024 Annual Meeting of Stockholders (Proxy Access)(2024 Annual Meeting), our Corporate Secretary must receive the proposal no later than the close of business on November 17, 2023, the 120th day prior to the first anniversary of the date on which this Proxy Statement was first released to our stockholders in connection with this year’s Annual Meeting. If we change the date of the 2024 Annual Meeting by more than 30 days from the anniversary of this year’s Annual Meeting, stockholder proposals must be received a reasonable time before we begin to print and mail the proxy materials for the 2024 Annual Meeting in order to be considered for inclusion in the proxy materials. DIRECTOR NOMINEES FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS (PROXY ACCESS) Eligible stockholders who do not seek to use the advance notice provisions for nomination of directors in Article II, Section 11 of our Bylaws as described below, but who instead intend to nominate a person for election as director under the proxy access provision in our Bylaws for inclusion in our proxy materials for the 20212024 Annual Meeting, must comply with the requirements set forth in Article II, Section 15 of our Bylaws and summarized below: ·
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Stockholder Eligibility to Submit Nominees:Nominees: 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 submit director nominations for inclusion in our proxy materials for the 20212024 Annual Meeting. ·
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Number of Nominees:Nominees: An eligible stockholder or group of stockholders (as described above) may nominate directors constituting up to 20% of the Board. ·
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Deadline: For the 20212024 Annual Meeting, our Corporate Secretary must receive the nomination between October 17, 202018, 2023 and the close of business on November 16, 2020.17, 2023. If the 20212024 Annual Meeting is held earlier than March 31, 202128, 2024 or later than May 30, 2021,27, 2024, the nomination must be received by the later of the close of business on (a) the date that is 150 days prior to such annual meeting or (b) the 10th day following the announcement of the date of such annual meeting. ·
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Nomination Information: The nomination must contain the information required by Article II, Section 15 of the Bylaws, a copy of which is available upon request to our Corporate Secretary.
If the stockholder does not meet the applicable deadlines or comply with the requirements of Article II, Section 15 of our Bylaws, we may omit the nomination from our proxy materials for the 20212024 Annual Meeting.
DIRECTOR NOMINEES FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS (UNIVERSAL PROXY CARD) In addition to be Brought Beforecomplying with the 2021advance notice provisions set forth below, to comply with the universal proxy rules, stockholders who intend to solicit proxies in support of director nominees (other than nominees of the Board) for the 2024 Annual Meeting of Stockholders (Without Being Included inmust provide notice that sets forth the Proxy Materials)information required by Rule 14a-19 under the Exchange Act and postmarked or transmitted electronically no later than February 27, 2024. STOCKHOLDER PROPOSALS AND BUSINESS TO BE BROUGHT BEFORE THE 2024 ANNUAL MEETING OF STOCKHOLDERS (WITHOUT BEING INCLUDED IN THE PROXY MATERIALS) Stockholders intending to present a proposal or nominate a director for election at the 20212024 Annual Meeting without having the proposal or nomination included in our proxy materials must comply with the requirements set forth in our Bylaws and summarized below.
Our Bylaws require, among other things, that our Corporate Secretary receive the proposal or nomination no earlier than the close of business on the 120th day, and no later than the close of business on the 90th day, prior to the first anniversary of this year’s Annual Meeting, unless the 20212024 Annual Meeting is more than 30 days before or more than 70 days after such anniversary date. For our 20212024 Annual Meeting, our Corporate Secretary must receive the proposal or nomination between December 31, 202029, 2023 and the close of business on January 30, 2021.28, 2024. If the 20212024 Annual Meeting is held earlier than March 31, 202128, 2024 or later than July 9, 2021,6, 2024, the proposal or nomination should be received no earlier than the close of business on the one hundred twentieth (120th)120th day prior to such annual meeting and not later than the close of business on the later of (a) the 90th day prior to the date of the 20212024 Annual Meeting or (b) the 10th day following the day on which the date of the 20212024 Annual Meeting is first publicly announced by the Company.
The proposal or nomination must contain the information required by Article II, Section 11 of the Bylaws, a copy of which is available upon request to our Corporate Secretary. If the stockholder does not meet the applicable deadlines or comply with the requirements of SEC Rule 14a-4, we may exercise discretionary voting authority under proxies we solicit to vote, in accordance with our best judgment, on any such proposal. Stockholder Recommendations for Director Candidates
STOCKHOLDER RECOMMENDATIONS FOR DIRECTOR CANDIDATES The Governance and Nominating Committee will also consider nominations by stockholders who recommend candidates for election to the Board.Board in a similar manner as described under “Director Nominee Selection Process” above. A stockholder seeking to recommend a prospective candidate for the Committee’s consideration may do so by writing to the Corporate Secretary, NRG Energy, Inc., 804 Carnegie Center, Princeton, New Jersey 08540 and by following the requirements to submit nominees discussed under “Stockholder Proposals and Business to be Brought Before the 20212024 Annual Meeting of Stockholders (Without Being Included in the Proxy Materials).” 74
APPENDIX A VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time, on April 29, 2020. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. NRG ENERGY, INC. C/O OFFICE
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN
ARTICLE I
PURPOSE AND SCOPE OF GENERAL COUNSEL 804 CARNEGIE CENTER PRINCETON, NJ 08540-6213 ELECTRONIC DELIVERYTHE PLAN 1.1
Purpose The NRG Energy, Inc. Amended and Restated Employee Stock Purchase Plan is intended to encourage employee participation in the ownership of the Company. 1.2
Definitions Unless the context clearly indicates otherwise, the following terms have the meaning set forth below: Board of Directors or Board means the Board of Directors of the Company. Code means the Internal Revenue Code of 1986, as amended from time to time, together with any applicable regulations issued thereunder. Committee means the committee of one or more officers established by the Board to administer the Plan, which Committee shall administer the Plan as provided in Section 1.3 hereof. Common Stock means shares of the common stock, par value $0.01 per share, of the Company. Company means NRG Energy, Inc., a corporation organized under the laws of the State of Delaware, or any successor corporation. Compensation means (a) the fixed salary or base wage paid by the Employer to an Employee as reported by the Employer to the United States government (or other applicable government) for income tax purposes, including an Employee’s portion of salary deferral contributions pursuant to Section 401(k) of the Code and any amount excludable pursuant to Section 125 of the Code, and (b) to the extent authorized by the Committee for any Plan Year or Plan Years, any cash bonus payment received under a cash bonus plan or program established by the Employer, but excluding from both (a) and (b) any fee, overtime pay, severance pay, expenses, stock option or other equity-based incentive income, or other special emolument or any credit or benefit under any employee plan maintained by the Company. Continuous Service means the period of time, uninterrupted by a termination of employment (other than a termination as a result of a transfer of employment among the Parent, the Company or a Designated Subsidiary), that an Employee has been employed by the Company, a Designated Subsidiary or the Parent (or any combination of the foregoing) immediately preceding an Offering Date. Such period of time shall include any approved leave of absence. Designated Subsidiary means any Subsidiary that has been designated by the Committee to participate in the Plan. Employee means any full-time or part-time employee of the Company, any Parent or a Designated Subsidiary who customarily works for the Company, any Parent or Designated Subsidiary, as the case may be, for a minimum of seventeen and one-half hours per week. Employer means the Company, any Parent or a Designated Subsidiary employing an Employee. Exercise Date means September 30 and March 31 of each Plan Year, or such other date(s) as determined by the Committee.
Fair Market Value of a share of Common Stock means the last price of the Common Stock on the applicable date as reported by the exchange on which the Common Stock is then listed, or, if not so reported for that day, on the last preceding day for which such price is reported, or such other reasonable method of determining fair market value as the Committee shall adopt. Offering Date means April 1 and October 1 of each Plan Year, or such other date(s) as determined by the Committee. Option Period or Period means the period beginning on an Offering Date and ending on the next succeeding Exercise Date, or such other period as determined by the Committee. Option Price means the purchase price of a share of Common Stock hereunder as provided in Section 3.1 hereof. Parent means any corporation or other entity in an unbroken chain of entities ending with the Company, if each of the entities other than the Company owns equity interests possessing 50% or more of the total combined voting power of all classes of equity of one of the other entities in such chain, as determined pursuant to the requirements of Section 424(e) of the Code, and shall include entities that may become a parent after adoption of this Plan, as determined by the Committee. Participant means any Employee who (i) is eligible to participate in the Plan under Section 2.1 hereof and (ii) elects to participate. Participant Election means the form prescribed by the Committee which must be completed and executed by an Employee who elects to participate in the Plan for any Offering Period(s). Plan means this NRG Energy, Inc. Amended and Restated Employee Stock Purchase Plan, as amended from time to time. Plan Account or Account means an account established and maintained in the name of each participant. Plan Manager means any Employee appointed pursuant to Section 1.3 hereof. Plan Year means the twelve (12) month period beginning April 1 and ending on the following March 31 during any calendar year in which the Plan is effective. Subsidiary means any corporation or other entity in an unbroken chain of entities beginning with the Company if, each of the entities (other than the last entity in the unbroken chain) owns equity interests possessing 50% or more of the total combined voting power of all classes of equity in one of the other entities in the chain, as determined pursuant to the requirement of Section 424(f) of the Code, and may include entities that become subsidiaries after adoption of this Plan, as determined by the Committee. 1.3
Administration of Plan Subject to oversight by the Board of Directors or the Board’s Compensation Committee, the Committee shall have the authority to administer the Plan and to make and adopt rules and regulations not inconsistent with the provisions of the Plan or the Code. The Committee shall adopt the form of Participant Election and all notices required hereunder. Its interpretations and decisions in respect to the Plan shall, subject as aforesaid, be final and conclusive. The Committee shall have the authority to appoint an Employee as Plan Manager and to delegate to the Plan Manager such authority with respect to the administration of the Plan as the Committee, in its sole discretion, deems advisable from time to time.
1.4
Effective Date of Plan The Plan was originally effective July 1, 2008, was amended and restated effective January 1, 2012, was amended and restated effective July 1, 2014, was amended and restated effective April 28, 2017, and was amended and restated effective April 1, 2019. This amended and restated Plan shall become effective April 1, 2023. 1.5
Extension or Termination of Plan The Plan shall continue in effect through, and including December 31, 2026 unless terminated prior thereto pursuant to Section 4.3 hereof, or by the Board of Directors or the Compensation Committee of the Board, each of which shall have the right to extend the term of or terminate the Plan at any time under Section 6.4. Upon any such termination, the balance, if any, in each Participant’s Account shall be refunded to him or her, or otherwise distributed in accordance with policies and procedures prescribed by the Committee in cases where such a refund may not be possible. ARTICLE II
PARTICIPATION 2.1
Eligibility Each Employee who on an Offering Date has at least sixty days of Continuous Service may become a Participant by executing and filing a Participant Election with the Company prior to said Offering Date. No Employee may participate in the Plan if said Employee, immediately after an Offering Date, would be deemed for purposes of Section 423(b)(3) of the Code to possess 5% or more of the total combined voting power or value of all classes of stock of the Company, its Parent or any Subsidiary, as determined pursuant to the requirements of Section 423(b)(3) of the Code. 2.2
Payroll Deductions Payment for shares of Common Stock purchased hereunder shall be made by authorized payroll deductions from each payment of Compensation in accordance with instructions received from a Participant. For base Compensation, said deductions shall be expressed as a whole number percentage of such Compensation which shall be at least 1% but not more than 10%, subject to the aggregate maximum described in Section 3.3. A Participant may not increase or decrease the deduction during an Option Period. However, a Participant may change the percentage deduction for any subsequent Option Period by filing notice thereof with the Company prior to the Offering Date on which such Period commences. During an Option Period, a Participant may discontinue payroll deductions but have the payroll deductions previously made during that Option Period remain in the Participant’s Account to purchase Common Stock on the next Exercise Date, provided that he or she is an Employee as of that Exercise Date. Any Participant who discontinues payroll deductions during an Option Period may again become a Participant for a subsequent Option Period by executing and filing another Participant Election in accordance with Section 2.1. Any amount remaining in the Participant’s Account after the purchase of Common Stock on an Exercise Date shall be carried forward to the next succeeding Option Period, as provided in Section 3.2, unless the Participant requests, in writing, that any excess be refunded to the Participant. Notwithstanding the foregoing, if (i) the amount remaining in a Participant’s Account after the purchase of Common Stock on an Exercise Date is less than the Fair Market Value of a share of Common Stock on the Exercise Date; and (ii) the Participant has not elected to make payroll deductions to the Participant’s Account for the next Option Period, the Participant’s Account balance shall be refunded to the Participant. If youauthorized by the Committee, bonus compensation will be included in Compensation subject to payroll deductions in a given Plan Year. The Committee will provide a written notice to Participants if bonus compensation is to be included in Compensation for a given Plan Year. A Participant may select a different percentage for base
salary or fixed wage compensation than such percentage selected for cash bonus Compensation; provided, however any such deductions shall be subject to the aggregate maximum described in Section 3.3. ARTICLE III
PURCHASE OF SHARES 3.1
Option Price The Option Price per share of the Common Stock sold to Participants hereunder shall be equal to the lesser of: (a) 95% of the Fair Market Value of such share on the Exercise Date of an Option Period, or (b) 95% of the Fair Market Value of such share on the Offering Date of an Option Period. Effective April 1, 2023, the Option Price per share of the Common Stock sold to Participants hereunder shall be equal to the lesser of: (a) 90% of the Fair Market Value of such share on the Exercise Date of an Option Period, or (b) 90% of the Fair Market Value of such share on the Offering Date of an Option Period. Prior to the commencement of any Option Period that begins after April 1, 2023 the Committee may change the Option Price per share of the Common Stock sold to Participants hereunder for such Option Period. Notwithstanding the foregoing, the Option Price per share shall (i) not be less than the par value of the Common Stock; and (ii) at all times not be less than the lesser of (a) 85% of the Fair Market Value of a share of Common Stock on the Offering Date of an Option Period and (b) 85% of the Fair Market Value of such share on the Exercise Date of such Option Period. 3.2
Purchase of Shares On each Exercise Date, the amount in a Participant’s Account shall be charged with the aggregate Option Price of the largest number of whole shares of Common Stock which can be purchased with said amount. The balance, if any, in such account shall be carried forward to the next succeeding Option Period, subject to Section 2.2. 3.3
Limitations on Purchase Notwithstanding any provisions of the Plan to the contrary, no Employee shall be granted an option under the Plan if, immediately after the grant, such Employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any Subsidiary or Parent of the Company would likeaccrue at a rate per Offering Period which exceeds the lesser of: (a) twenty-five thousand dollars ($25,000) or (b) an amount equal to ten percent (10%) of the Employee’s annualized base salary in effect at the start of such Offering Period, in each case of Fair Market Value of such shares (determined at the time such option is granted); provided, however, that for any calendar year Employee’s right to purchase shares under all employee stock purchase plans (as described in Section 423 of the Code) of the Company and any Subsidiary or Parent of the Company may not accrue at a rate which exceeds twenty-five thousand dollars ($25,000) in the aggregate (as determined at the time such option is granted). Notwithstanding any provision in the Plan to the contrary, the Plan will be operated in compliance with Section 423(b)(8) of the Code. 3.4
Transferability of Rights Rights to purchase shares hereunder shall be exercisable only by the Participant. Such rights shall not be transferable. ARTICLE IV
PROVISIONS RELATING TO COMMON STOCK 4.1
Common Stock Reserved There shall be 9,700,000 shares of Common Stock reserved for the Plan, subject to adjustment in accordance with Section 4.2 hereof. The 9,700,000 shares of Common Stock reflects an increase of 4,400,000 shares, subject
to the approval of the Company’s stockholders on April 27, 2023. Such shares can be authorized and unissued shares or treasury shares. The aggregate number of shares which may be purchased under the Plan shall not exceed the number of shares reserved for the Plan. 4.2
Adjustment for Changes in Common Stock In the event that adjustments are made in the number of outstanding shares of Common Stock or said shares are exchanged for a different class of stock of the Company or for shares of stock of any other entity by reason of merger, consolidation, stock dividend, stock split or otherwise, the Board shall make appropriate adjustments in (i) the number and class of shares or other securities that may be reserved for purchase, or purchased, hereunder, and (ii) the Option Price. All such adjustments shall be made approved by the Board, and its decision shall be binding and conclusive. 4.3
Insufficient Reserved Shares If the aggregate funds available for purchase of Common Stock on any Exercise Date would cause an issuance of shares in excess of the number provided for in Section 4.1 hereof, (i) the Committee shall proportionately reduce the costsnumber of shares which would otherwise be purchased by each Participant in order to eliminate such excess and (ii) the Plan shall automatically terminate immediately after such Exercise Date. 4.4
Confirmation Confirmation of each purchase of Common Stock hereunder shall be made available to the Participant in either written or electronic format. A record of purchases shall be maintained by appropriate entries on the books of the Company. Participants may obtain a certificate or certificates for all or part of the shares of Common Stock purchased hereunder upon making a written request. Once shares of Common Stock are delivered hereunder, Participants may sell such shares. If a Participant does not sell shares delivered hereunder, such shares must remain in the Participant’s account with the Company’s designated brokerage until eighteen (18) months following the delivery of such shares. 4.5
Rights as Shareholders The shares of Common Stock purchased by a Participant on an Exercise Date shall, for all purposes, be deemed to have been issued and sold as of the close of business on such Exercise Date. Prior to that time, none of the rights or privileges of a shareholder of the Company shall exist with respect to such shares. ARTICLE V
TERMINATION OF PARTICIPATION 5.1
Voluntary Withdrawal A Participant may withdraw from the Plan by filing notice of withdrawal at least three (3) business days prior to the close of business on an Exercise Date. Upon withdrawal, the entire amount, if any, in a Participant’s Account shall be refunded to him or her without interest. Any Participant who withdraws from the Plan may again become a Participant in accordance with Section 2.1 hereof. 5.2
Termination of Eligibility If a Participant ceases to be eligible under Section 2.1 hereof for any reason, the dollar amount in such Participant’s Account will be refunded to the Participant, or in the case of death, the Participant’s designated beneficiary or estate, or otherwise distributed in accordance with policies and procedures prescribed by the Committee in cases where such a refund may not be possible.
ARTICLE VI
GENERAL PROVISIONS 6.1
Notices Any notice which a Participant files pursuant to the Plan shall be made on forms prescribed by the Committee and shall be effective only when received by the Company. 6.2
Condition of Employment Neither the creation of the Plan nor participation therein shall be deemed to alter the at-will nature of a Participant’s employment, create any right of continued employment or in any way affect the right of the Employer to terminate an Employee. 6.3
Withholding of Taxes Each Participant shall, no later than the date as of which the value of an option under the Plan and/or shares of Common Stock first becomes includible in the income of the Participant for income tax purposes, pay to the Company, or make arrangements satisfactory to the Committee regarding payment of, any taxes of any kind required by law to be withheld with respect to such option or shares of Common Stock. The obligations of the Company under the Plan shall be conditional on the making of such payments or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. In particular, to the extent a Participant is subject to taxation under U.S. Federal income tax law, if the Participant makes a disposition, within the meaning of Section 424(c) of the Code of any share or shares of Common Stock issued to Participant pursuant to Participant’s exercise of an option, and such disposition occurs within the two-year period commencing on the day after the Offering Date or within the one-year period commencing on the day after the Exercise Date, Participant shall, within ten (10) days of such disposition, notify the Company thereof and thereafter immediately deliver to the Company any amount of federal, state or local income taxes and other amounts which the Company informs the Participant the Company may be required to withhold. 6.4
Amendment of the Plan The Board of Directors or the Board’s Compensation Committee may at any time, or from time to time, amend, modify, or terminate the Plan in any respect, except that, without approval of the shareholders, no amendment may increase the aggregate number of shares reserved under the Plan other than as provided in Section 4.2 hereof, materially increase the benefits accruing to Participants other than as provided in Section 3.1, or materially modify the requirements as to eligibility for participation in the Plan. Any amendment of the Plan must be made in accordance with applicable provisions of the Code and/or any regulations issued thereunder, any other applicable law or regulations, and the requirements of the principal exchange upon which the Common Stock is listed. 6.5
Application of Funds All funds received by the Company by reason of purchases of Common Stock hereunder shall constitute general funds of the Company and may be used for any corporate purpose. 6.6
Legal Restrictions The Company shall not be obligated to sell shares of Common Stock hereunder if counsel to the Company determines that such sale would violate any applicable law or regulation.
6.7
Gender Whenever used herein, use of any gender shall be applicable to all genders. 6.8
Governing Law The Plan and all rights and obligations thereunder shall be constructed and enforced in accordance with the laws of the State of Delaware and any applicable provisions of the Code and the related regulations. 6.9
Indemnification To the extent allowable under applicable law, the Committee and the Plan Manager and any delegate thereof shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by our companysuch person in mailing proxy materials, you can consentconnection with or resulting from any claim, action, suit, or proceeding to receivingwhich he or she may be a party or in which he or she may be involved by reason of any action or failure to act under the Plan and against and from any and all future proxy statements, proxy cardsamounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her, provided he or she gives the Company an opportunity, at its own expense, to handle and annual reports electronically via e-maildefend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Internet. To sign upCompany’s articles of incorporation or bylaws, as a matter of law, under any indemnification agreement or otherwise, or any power that the Company may have to indemnify them or hold them harmless. 6.10
Expenses The expenses of administering the Plan shall be borne by the Company. 6.11
Titles and Headings The titles and headings of the sections in this Plan are for electronic delivery, please follow the instructions above to vote using the Internetconvenience of reference only, and when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time, on April 29, 2020. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have providedevent of any conflict, the text of this Plan, rather than such titles or return itheadings, shall control. 6.12
Arbitration In the event of any dispute between the Employer and a Participant with respect to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TOthis Plan, either may require that the dispute be determined by binding arbitration by written notice to the other. In such case, the arbitration shall be conducted in accordance with the rules of the American Arbitration Association then in effect before a panel of three arbitrators, and the decision of the arbitrators shall be final and binding on the parties. In any such arbitration, the non-prevailing party shall pay all expenses, including the costs of the arbitrators and the costs and expenses, including reasonable attorneys’ fees, incurred by the prevailing party in the arbitration.
NRG is a registered trademark of NRG Energy, Inc. © 2023 NRG Energy, Inc. All rights reserved. 1017292060
![[MISSING IMAGE: px_annualmeeting01-bw.jpg]](/files/DEF 14A/0001104659-23-032997/px_annualmeeting01-bw.jpg) Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) DateTO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: E90356-P32367 KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THISRECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. NRGDETACH AND RETURN THIS PORTION ONLYD97320-P86311For Against AbstainFor Against Abstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !NRG ENERGY, INC. TheINC.C/O OFFICE OF GENERAL COUNSEL804 CARNEGIE CENTERPRINCETON, NJ 08540-6213The Board of Directors recommends a vote FOR the nomineesthenominees listed under Proposal 1, and FOR Proposals 2 and3, One Year for Proposal 4 and 3. 1. Election of Directors Nominees: For Against Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! 1a.FOR Proposal 5.NRG ENERGY, INC.1. To elect ten directors.1b. Antonio Carrillo1a. E. Spencer Abraham For Against Abstain 2.Abraham1c. Matthew Carter, Jr.1d. Lawrence S. Coben1e. Heather Cox1f. Elisabeth B. Donohue1g. Mauricio Gutierrez1h. Paul W. Hobby1j. Anne C. Schaumburg1i. Alexandra Pruner2. To adopt the NRG Energy, Inc. Amended and RestatedEmployee Stock Purchase Plan.3. To approve, on a non-binding advisory basis, the compensation of the Company's named executive officers.NRG Energy, Inc.’sexecutive compensation.5. To ratify the appointment of KPMG LLP as the Company's independentNRG Energy, Inc.’sindependent registered public accounting firm for the2023 fiscal year 2020. ! ! ! ! ! ! 1b. Antonio Carrillo 1c. Matthew Carter, Jr. 3. 1d. Lawrence S. Coben NOTE:year.4. To approve, on a non-binding advisory basis, thefrequency of the non-binding advisory vote onNRG Energy, Inc.'s executive compensation.NOTE: Such other business as may properly come before the meetingthemeeting or any adjournment thereof. 1e. Heather Cox 1f. Mauricio Gutierrez 1g. Paul W. Hobby 1h. Alexandra Pruner 1i. Anne C. Schaumburg 1j. Thomas H. Weidemeyer Pleasethereof.Please sign exactly as your name(s) appear(s) hereon. Joint owners should each sign. When signing as attorney, executor, administrator, corporate officer, trustee,guardian, or custodian, please give full title. Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date
title.Nominees: For Against Abstain! ! ! !! ! !ThreeYearsOneYearTwoYears AbstainVOTE BY INTERNETBefore The Meeting - Go to www.proxyvote.com or scan the QR Barcode aboveUse the Internet to transmit your voting instructions and for electronic deliveryof information. Vote by 11:59 p.m. Eastern Time on April 26, 2023. Have yourproxy card in hand when you access the web site and follow the instructions toobtain your records and to create an electronic voting instruction form.During The Meeting - Go to www.virtualshareholdermeeting.com/NRG2023You may attend the meeting via the Internet and vote during the meeting. Haveavailable the information that is printed in the box marked by the arrow belowand follow the instructions.VOTE BY PHONE - 1-800-690-6903Use any touch-tone telephone to transmit your voting instructions up until11:59 p.m. Eastern Time on April 26, 2023. Have your proxy card in hand whenyou call and then follow the instructions.VOTE BY MAILMark, sign and date your proxy card and return it in the postage-paidenvelope we have provided or return it to Vote Processing, c/o Broadridge,51 Mercedes Way, Edgewood, NY 11717.SCAN TOVIEW MATERIALS & VOTE w
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Letter![[MISSING IMAGE: px_annualmeeting02-bw.jpg]](/files/DEF 14A/0001104659-23-032997/px_annualmeeting02-bw.jpg)
D97321-P86311(Continued and to Stockholders, Notice and Proxy Statement and Annual Report are available at www.proxyvote.com. IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE. E90357-P32367 be signed on reverse side)Proxy — NRG Energy, Inc. ANNUALInc.ANNUAL MEETING OF STOCKHOLDERS April 30, 2020STOCKHOLDERSApril 27, 2023 9:00 A.M. CT JW Marriott Downtown 806 Main Street, Houston, Texas 77002 ThisETThis Proxy/Voting Instruction Card is Solicited on Behalf of the Board of Directors for the 20202023 Annual Meeting of Stockholders. TheStockholders.The undersigned hereby constitutes and appoints Mauricio Gutierrez and Christine A. Zoino, and each of them, attorneys and proxies with full power of substitution, to represent the undersigned and to vote all shares of common stock, $0.01 par value $0.01 per share, of NRG Energy, Inc. (the "Company"), that the undersigned would be entitled to vote if personally present at the 20202023 Annual Meeting of Stockholders of the Company to be held on April 30, 2020,27, 2023, at 9:00 a.m. (Central(Eastern Time) live via the Internet at the JW Marriott Downtown, 806 Main Street, Houston, Texas 77002,www.virtualshareholdermeeting.com/NRG2023, and at any and all adjournments or postponements thereof (the "Meeting"), as herein specified and in such proxyholders' discretion upon any other matter that may properly come before the Meeting including without limitation to vote on the election of such substitute nominees as such proxies may select in the event nominee(s) named on the card become(s) unable to serve as director(s). By granting this proxy, the undersigned hereby revokes any proxy previously granted by the undersigned. THISundersigned.THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED UNDER PROPOSAL 1, AND "FOR" PROPOSALS 2 AND 3. PLEASE3, ONE YEAR FOR PROPOSAL 4 AND "FOR" PROPOSAL 5.PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY, EVEN IF YOU PLAN TO VIRTUALLY ATTEND THE ANNUAL MEETING. (ContinuedMEETING.________________________________________________________________________________________________________________________________________________________________________________________________________________________Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and to be signed on reverse side)
Proxy Statement and Annual Report are availableat www.proxyvote.com.IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
0001013871 5 2022-01-01 2022-12-31
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