| 73 PENSION BENEFITS FOR FISCAL YEAR ENDED DECEMBER 31, 2021 None of the NEOs received qualified retirement income benefits for fiscal year 2021. EMPLOYMENT AGREEMENTS Mr. Gutierrez serves as the 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 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 2021 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 Committee with input from Mr. Gutierrez. EMPLOYMENT AGREEMENTS
Mr. Gutierrez serves as our President and CEO pursuant to the terms of an employment agreement 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-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 2022 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 Board 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 2022 fiscal year, Mr. Gutierrez’s target LTIP award is 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 MR. GUTIERREZ 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 a reduction of his base salary), Mr. Gutierrez will be entitled to 2 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 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 3 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 the 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. ALL OTHER NEOs 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, the 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 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 becomes the direct or indirect beneficial owner of 50% or more of the Company’s voting 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; (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 entity; 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; (ii) willful failure to perform his or her duties or willful gross negligence or willful misconduct; (iii) the NEO’s performance of any material act of theft, fraud, malfeasance or 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 policy; 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.” In the case of Mr. Gutierrez only, a voluntary termination for “good reason” 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, 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. | | 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 | |
CEO PAY RATIO 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 2022, the ratio of the total compensation of Mauricio Gutierrez, our President and CEO, of $10,151,847, as shown in the Summary Compensation Table (CEO Compensation), as compared to the total compensation of our median employee of $121,958, calculated in the same manner, 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 October 31, 2022, we and our consolidated subsidiaries had 6,551 employees in the United States, 148 employees in Canada, and 194 employees located in Australia. As allowed under Item 402 of Regulation S-K, we excluded the 342 employees in Australia and Canada from our median employee determination since they represent less than 5% of our total 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, 2022, for all individuals, other than our CEO, who were employed by us on October 31, 2022 (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. PAY VERSUS PERFORMANCE As noted in the 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 our principal executive officer (PEO) and Non-PEO NEOs and Company performance for the fiscal years listed below. The Compensation Committee did not consider the pay versus performance disclosure below in making its pay decisions for any of the years 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 its terms. ForItem 402(v) of Regulation S-K of the 2021 fiscal year, Mr. Gutierrez’s target LTIP award is 575%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 his base salary. Mr. Gutierrez is also entitled to health, welfarecertain amounts for the PEO 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,Non-PEO NEOs as set forth below. Equity values are calculated 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 benefitsaccordance with FASB ASC Topic 718, Compensation — Stock Compensation. Amounts in the event his employment terminates under certain circumstances. These severance payments and benefitsExclusion of Stock Awards column 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 MR. GUTIERREZ 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 a reduction of his base salary), Mr. Gutierrez will be entitled to two times 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 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 three times the sum of Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.ea | Sequence: 43 CHKSUM Content: 4935 Layout: 22965 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5 |
| 74 (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; 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 Revenue 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. ALL OTHER NEOs Under the CIC Plan, the NEOs other than Mr. Gutierrez are entitled to a general severance benefit equal to 1.5 times 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, the 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 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 becoming the direct or indirect beneficial owner of 50% or more of the Company’s voting 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, (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 entity or (d) the stockholders approve a plan or proposal to liquidate or dissolve the Company. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.ea | Sequence: 44 CHKSUM Content: 16696 Layout: 34139 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 75 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, (ii) willful failure to perform his or her duties or willful gross neglect or willful gross misconduct, (iii) the NEO’s performance of any material act of theft, fraud, malfeasance or 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, and (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, “good reason” also includes any material failure by the Company to comply with his employment agreement, his removaltotals 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, 2021, 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. Involuntary Not for Cause or Voluntary Involuntary Voluntary for Good Reason Named Executive Termination Not for Termination for following a Change- Officer Cause ($) Good Reason ($) in-Control ($) Death ($) Disability ($) Current Executives Mauricio Gutierrez 3,615,906 3,615,906 28,148,488 18,045,128 18,045,128 Alberto Fornaro 1,118,233 1,118,233 4,440,451 1,582,556 1,582,556 Elizabeth Killinger 893,616 893,616 7,354,671 3,883,910 3,883,910 Christopher Moser 893,616 893,616 7,354,671 3,883,910 3,883,910 Robert Gaudette 2,085,154 2,085,154 4,290,070 2,383,886 2,383,886 Former Executives Gaetan Frotte 1,520,828 1,520,828 2,883,705 1,599,070 1,599,070 Kirkland Andrews(1) — — — — — (1) Mr. Andrews resigned as Executive Vice President and Chief Financial Officer effective February 4, 2021 and remained with the Company in an advisory role until February 19, 2021. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.ea | Sequence: 45 CHKSUM Content: 45052 Layout: 27026 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 76 CEO PAY RATIO 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 2021, the total compensation of Mauricio Gutierrez, our President and CEO, of $10,854,224, as shownStock Awards column set forth in the Summary Compensation Table (CEO Compensation)Table.
| |
| | Year | | | | Summary
Compensation
Table Total for
Mr. Gutierrez
($) | | | | 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
($) | | | | 2022 | | | | 2,484,712 | | | | (1,471,617) | | | | (201,059) | | | | 812,036 | | | | 2021 | | | | 2,042,570 | | | | (1,119,709) | | | | 543,218 | | | | 1,466,079 | | | | 2020 | | | | 2,159,739 | | | | (1,073,387) | | | | 864,537 | | | | 1,950,890 | |
The amounts in the Inclusion of Equity Values in the tables above are derived from the amounts set forth in the following tables: | | Year | | | | Year-End
Fair Value
of Equity
Awards
Granted
During Year
That
Remained
Unvested
as of
Last Day of
Year for
Mauricio
Gutierrez
($) | | | | 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), was approximately 86 times the total compensation of a median employee, calculatedwhich we also utilize in the same manner, of $126,289. 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, 2021 as the determination date for identifying the median employee for purposes of this pay ratio disclosure. As of October 31, 2021, we and our consolidated subsidiaries had 6,811 employees in the United States, 183 employees in Canada, and 210 employees located in Australia. As allowed understock performance graph required by Item 402201(e) of Regulation S-K we excludedof the 210 employees in Australia from our median employee determination since they represent less than 5% of our total 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) and Form T4 (Canada) as of December 31, 2021, for all individuals, other than our CEO, who were employed by us on October 31, 2021 (whether employed on a full-time, part-time, or seasonal basis). We converted Canadian wages to U.S dollars and 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. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.ea | Sequence: 46 CHKSUM Content: 2738 Layout: 26428 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5 |
| 77 The Compensation Committee has reviewed and discussed the Compensation Discussion and AnalysisSEC rules 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 Analysis be included in this Proxy Statement. Compensation Committee: E. Spencer Abraham, Chair Antonio Carrillo Heather Cox Anne C. Schaumburg 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. Compensation CommitteeAnnual Report on Executive Compensation Compensation Committee Interlocks and Insider Participation Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.ea | Sequence: 47 CHKSUM Content: 47217 Layout: 41506 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black, !section hd grad GRAPHICS: none V1.5
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| 78 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 NYSE 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 two of the four members of the Audit Committee, Anne C. Schaumburg and Antonio Carrillo, met the requirements of an “audit committee financial expert.” The Board has further determined that Matthew Carter, Jr. and Elisabeth B. Donohue met the “financial literacy” requirements set forth in the listing standards under the 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 2021, 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, 20212022. 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 Company’s managementSEC rules and has discussed with KPMG LLPregulations, we indicated in the matters requiredtable above Adjusted EBITDA Achievement to be discussed by the applicable requirementsmost 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 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-KCD&A for the fiscal year ended December 31, 2021, for filing with the Securities and Exchange Commission. Audit Committee: Anne C. Schaumburg, Chair Antonio Carrillo Matthew Carter, Jr. Elisabeth B. Donohue Audit Committee Report Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 1 CHKSUM Content: 31305 Layout: 62520 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black, !section hd grad GRAPHICS: none V1.5 |
| 79 AUDIT AND NON-AUDIT FEES 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, 2021, and December 31, 2020. Year Ended December 31, 2021 2020 (in thousands) Audit Fees $ 9,367 $ 6,547 Audit-Related Fees — — Tax Fees 1,505 1,735 All Other Fees — — Total $ 10,872 $ 8,282 AUDIT FEES For 2021 and 2020 audit services, KPMG LLP billed us approximately $9,367,000 and $6,547,000, 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 PCAOB (United States), and in connection with subsidiary financial statement audits. AUDIT-RELATED FEES No audit-related fees were billed to us by KPMG LLP for 2021 and 2020. TAX FEES 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 2021 and 2020 tax services, KPMG LLP billed us approximately $1,505,300 and $1,735,300, respectively. ALL OTHER FEES There were no other fees billed to us by KPMG LLP for 2021 and 2020. 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- approval of all audit and permissible non-audit services provided by the independent registered public accounting firm. Independent Registered Public Accounting Firm Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 2 CHKSUM Content: 37599 Layout: 38692 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black, !section hd grad GRAPHICS: none V1.5
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| 80 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 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 2021 and 2020. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 3 CHKSUM Content: 36103 Layout: 26428 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 81 WHAT IS THE PURPOSE OF THE ANNUAL MEETING? The purpose of the Annual Meeting is to: 1. elect eleven directors; 2. approve, on a non-binding advisory basis, the Say on Pay Proposal; 3. ratify the KPMG LLP Ratification Proposal; and 4. 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 1, 2022, 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 online 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 during the 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. Questions and Answers Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 4 CHKSUM Content: 14277 Layout: 30341 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black, !section hd grad GRAPHICS: none V1.5
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| 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 approval, on a non-binding advisory basis, of the Say on Pay Proposal; and 3. FOR the ratification of the KPMG LLP Ratification 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, 242,154,231 shares of our common stock, representing the same number of votes, were outstanding. The presence of the holders of at least 121,077,116 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? 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. 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. KPMG LLP Ratification 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. 82 Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 5 CHKSUM Content: 5517 Layout: 15050 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 83 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” 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 KPMG 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 HOW DO I 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 online during the Annual Meeting. Please refer to the summary instructions belowlisted years.
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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 cumulative TSR over the three 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 Compensation Actually Paid to our Non-PEO NEOs, and our Net Income during the three 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 AND PEER GROUP TSR The following chart compares our cumulative TSR over the three most recently completed fiscal years to that of the UTY over the 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. | | | Adjusted EBITDA
Adjusted Free Cash Flow (before growth)
Credit Ratio
ESG
Relative TSR
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Compensation Committee Report on Executive Compensation The Compensation Committee has reviewed and discussed the CD&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 CD&A be included in this Proxy Statement. Compensation Committee: E. Spencer Abraham, Chair Antonio Carrillo Matthew Carter, Jr. Heather Cox Paul W. Hobby ![[MISSING IMAGE: bg_bgradient-4c.jpg]](https://files.docoh.com/DEF 14A/0001104659-23-032997/bg_bgradient-4c.jpg) | | Compensation Committee Interlocks 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. • Vote by 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, until 11:59 p.m., Eastern Time on April 27, 2022 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. • Vote by Telephone: You may use any touch-tone telephone to vote your proxy toll-free 24 hours a day, 7 days a week, until 11:59 p.m., Eastern Time on April 27, 2022. 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. • Vote by 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 2. 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 NYSE 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 three of the four members of the Audit Committee, Anne C. Schaumburg, Antonio Carrillo, and Alexandra Pruner met the requirements of an “audit committee financial expert.” The Board has further determined that Paul W. Hobby met the “financial literacy” requirements set forth in the listing standards under the 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 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, 2022 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 filing with the SEC. Audit Committee: Anne C. Schaumburg, Chair Antonio Carrillo Alexandra Pruner Paul W. Hobby
Independent Registered Public Accounting Firm AUDIT AND NON-AUDIT FEES 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, 2022, and December 31, 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 | | |
AUDIT FEES For 2022 and 2021 audit services, KPMG LLP billed us approximately $9,904,000 and $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 PCAOB (United States), and in connection with subsidiary financial statement audits. AUDIT-RELATED FEES Audit-related fees relate to due diligence services in connection with mergers and acquisitions. For 2022, audit-related services, KPMG LLP billed us approximately $1,642,000. There were no audit-related fees billed to us by KPMG LLP for 2021. TAX FEES 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 2022 and 2021 tax services, KPMG LLP billed us approximately $1,653,000 and $1,505,000, respectively. ALL OTHER FEES There were no other fees billed to us by KPMG LLP for 2022 and 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- 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.
elect ten directors; 2.
adopt the ESPP; 3.
approve, on a non-binding advisory basis, the Say on Pay Proposal; 4.
vote, on a non-binding advisory basis, the Say on Frequency Proposal; 5.
ratify the KPMG LLP Ratification Proposal; and 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 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 online 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 during the 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 5.
FOR the KPMG LLP Ratification 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, 232,269,883 shares of our common stock, representing the same number of votes, were outstanding. The presence of the holders of at least 116,134,942 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? 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. 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 Ratification 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” 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 KPMG 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. 3. KPMG LLP Ratification | | | | 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. 1. Election of Directors Not considered votes properly cast and therefore will have no effect on this proposal. No effect on this proposal. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 6 CHKSUM Content: 61992 Layout: 36536 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5 |
| 84 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 28, 2022, the Annual Meeting date. • Vote by Internet during the Annual Meeting: For information on how stockholders can vote during the Annual Meeting, please refer to “How can I vote during the Annual Meeting?” below. MAY I CHANGE MY VOTE? You may change your proxy instructions or revoke your proxy at any time prior to the vote at the Annual Meeting. You 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 online during the Annual Meeting (attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). HOW CAN I VOTE DURING THE ANNUAL MEETING? To participate and vote during the virtual meeting, visit www.virtualshareholdermeeting.com/NRG2022 and enter the 16-digit control number included in your Notice of Internet Availability of proxy materials, proxy card, or the instructions that accompanied your proxy materials. You may begin to log into the meeting platform beginning at 8:45 a.m. Eastern Time on Thursday, April 28, 2022. The Annual Meeting will begin promptly at 9:00 a.m. Eastern Time on Thursday, April 28, 2022. 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 to log in and ensure they have a strong Internet connection and can hear streaming audio prior to the start of the Annual Meeting. If you encounter technical difficulties with the virtual meeting platform on day of the Annual Meeting, please call the technical support number that will be posted on the Annual Meeting website. Technical support will be available starting at 8:45 a.m. Eastern Time and until the end of 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 office 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 office. Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 7 CHKSUM Content: 55816 Layout: 26428 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 85 HOW CAN I ASK QUESTIONS DURING THE ANNUAL MEETING? Only our stockholders as of March 1, 2022 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/NRG2022, 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 communications 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, 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). 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. 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. WHAT IS “HOUSEHOLDING”? 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 Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 8 CHKSUM Content: 53168 Layout: 21819 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 86 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) 929-5500 Fax: (212) 929-0308 Email: proxy@mackenziepartners.com Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 9 CHKSUM Content: 8943 Layout: 26428 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 87 STOCKHOLDER PROPOSALS FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2023 ANNUAL MEETING OF STOCKHOLDERS In order for a stockholder proposal to be considered for inclusion in our proxy materials for the 2023 Annual Meeting of Stockholders (2023 Annual Meeting), our Corporate Secretary must receive the proposal no later than the close of business on November 15, 2022, 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 2023 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 2023 Annual Meeting in order to be considered for inclusion in the proxy materials. Proposals 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, 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 NOMINEES FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2023 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 2023 Annual Meeting, must comply with the requirements set forth in Article II, Section 15 of our Bylaws and summarized below: • Stockholder Eligibility to Submit 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 2023 Annual Meeting. • Number of Nominees: An eligible stockholder or group of stockholders (as described above) may nominate directors constituting up to 20% of the Board. • Deadline: For the 2023 Annual Meeting, our Corporate Secretary must receive the nomination between October 16, 2022 and the close of business on November 15, 2022. If the 2023 Annual Meeting is held earlier than March 29, 2023 or later than May 28, 2023, 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. • 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 2023 Annual Meeting. Stockholder Proposals and Director Nominations for the 2023 Annual Meeting of Stockholders Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 10 CHKSUM Content: 23763 Layout: 30341 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black, !section hd grad GRAPHICS: none V1.5
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| 88 To comply with the universal proxy rules (once effective), stockholders who intend to solicit proxies in support of director nominees other than nominees of the Board for the 2023 Annual Meeting of Stockholders must provide notice that sets forth the information required by Rule 14a-19 under the Exchange Act no later than February 27, 2023. STOCKHOLDER PROPOSALS AND BUSINESS TO BE BROUGHT BEFORE THE 2023 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 2023 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 2023 Annual Meeting is more than 30 days before or more than 70 days after such anniversary date. For our 2023 Annual Meeting, our Corporate Secretary must receive the proposal or nomination between December 29, 2022 and January 28, 2023. If the 2023 Annual Meeting is held earlier than March 29, 2023 or later than July 7, 2023, the proposal or nomination should be received no earlier than the close of business on the 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 2023 Annual Meeting or (b) the 10th day following the day on which the date of the 2023 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 The Governance and Nominating Committee will also consider nominations by stockholders who recommend candidates for election to the 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 2023 Annual Meeting of Stockholders (Without Being Included in the Proxy Materials).” Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 11 CHKSUM Content: 51136 Layout: 26428 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| 89 NRG and the plus signs are registered servicemarks of NRG Energy, Inc. NRG is a registered trademark of NRG Energy, Inc. © 2022 NRG Energy, Inc. All rights reserved. 631598150 Toppan Merrill - NRG Energy_ Inc. DEF 14A ED [AUX] | 105969 | 14-Mar-22 15:36 | 22-3391-1.fa | Sequence: 12 CHKSUM Content: 64462 Layout: 1924 Graphics: 0 CLEAN JOB: 22-3391-1 CYCLE#;BL#: 14; 0 TRIM: 8.25" x 10.75" AS: Philadelphia: 215-246-0404 COLORS: Cyan, ~note-color 2, Black GRAPHICS: none V1.5
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| Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS DETACH AND RETURN THIS PORTION ONLY THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. D70258-P67361 For Against Abstain ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! NRG ENERGY, INC. C/O OFFICE OF GENERAL COUNSEL 804 CARNEGIE CENTER PRINCETON, NJ 08540-6213 The Board of Directors recommends a vote FOR the nominees listed under Proposal 1 and FOR Proposals 2 and 3. NRG ENERGY, INC. 1. Election of Directors 1b. Antonio Carrillo 1a. E. Spencer Abraham 1c. Matthew Carter, Jr. 1d. Lawrence S. Coben 1e. Heather Cox 1f. Elisabeth B. Donohue 1g. Mauricio Gutierrez 1h. Paul W. Hobby 1j. Anne C. Schaumburg 1k. Thomas H. Weidemeyer 1i. Alexandra Pruner 2. To approve, on a non-binding advisory basis, the compensation of the Company's named executive officers. 3. To ratify the appointment of KPMG LLP as the Company's independent registered public accounting firm for fiscal year 2022. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. 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. Nominees: ! ! ! For Against Abstain VOTE BY INTERNET Before The Meeting - Go to www.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on April 27, 2022. 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. During The Meeting - Go to www.virtualshareholdermeeting.com/NRG2022 You may attend the meeting via the Internet and vote during the meeting. Have available the information that is printed in the box marked by the arrow below and follow the instructions. 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 27, 2022. 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 provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. SCAN TO VIEW MATERIALS & VOTE w
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| D70259-P67361 (Continued and to be signed on reverse side) Proxy — NRG Energy, Inc. ANNUAL MEETING OF STOCKHOLDERS April 28, 2022 9:00 A.M. ET This Proxy/Voting Instruction Card is Solicited on Behalf of the Board of Directors for the 2022 Annual Meeting of Stockholders. 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, 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 2022 Annual Meeting of Stockholders of the Company to be held on April 28, 2022, at 9:00 a.m. (Eastern Time) live via the Internet at www.virtualshareholdermeeting.com/NRG2022, 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. 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. PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT PROMPTLY, EVEN IF YOU PLAN TO VIRTUALLY ATTEND THE ANNUAL MEETING. ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The 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.
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HOW DO I 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 online 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. •
Vote by 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, until 11:59 p.m., Eastern Time on April 26, 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. •
Vote by Telephone: You may use any touch-tone telephone to vote your proxy toll-free 24 hours a day, 7 days a week, until 11:59 p.m., Eastern Time on April 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. •
Vote by 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 27, 2023, the Annual Meeting date. •
Vote by Internet during the Annual Meeting: For information on how stockholders can vote during the Annual Meeting, please refer to “How can I vote during the Annual Meeting?” below. MAY I CHANGE MY VOTE? You may change your proxy instructions or revoke your proxy at any time prior to the vote at the Annual Meeting. You 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 online during the Annual Meeting (attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy). HOW CAN I VOTE DURING THE ANNUAL MEETING? 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 9:00 a.m. 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 to log in and ensure they have a strong internet connection and can hear streaming audio prior to the start of the Annual Meeting. If you encounter technical difficulties with the virtual meeting platform on the day of the Annual Meeting, please call the technical support number that will be posted on the Annual Meeting website. Technical support will be available starting at 8:45 a.m. Eastern Time and until the end of 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 office 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 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. Correspondence concerning stockholder inquiries can be handled by contacting NRG Energy, Inc. c/o Computershare, P.O. Box 43078, Providence, Rhode Island 02940-3078, or by telephone at 866-214-2213. Their website is: http://www.computershare.com. Certificates for transfer and address changes should be sent to: Computershare, P.O. 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. WHAT IS “HOUSEHOLDING”? 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) 929-5500 Fax: (646) 439-9201 Email: proxy@mackenziepartners.com
Stockholder Proposals and Director Nominations for the 2024 Annual Meeting of Stockholders All proposals discussed 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, as applicable. STOCKHOLDER PROPOSALS FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS In order for a stockholder proposal to be considered for inclusion in our proxy materials for the 2024 Annual Meeting of Stockholders (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 2024 Annual Meeting, must comply with the requirements set forth in Article II, Section 15 of our Bylaws and summarized below: •
Stockholder Eligibility to Submit 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 2024 Annual Meeting. •
Number of Nominees: An eligible stockholder or group of stockholders (as described above) may nominate directors constituting up to 20% of the Board. •
Deadline: For the 2024 Annual Meeting, our Corporate Secretary must receive the nomination between October 18, 2023 and the close of business on November 17, 2023. If the 2024 Annual Meeting is held earlier than March 28, 2024 or later than May 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. •
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 2024 Annual Meeting.
DIRECTOR NOMINEES FOR INCLUSION IN THE PROXY MATERIALS FOR THE 2024 ANNUAL MEETING OF STOCKHOLDERS (UNIVERSAL PROXY CARD) In addition to complying with the advance 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 must provide notice that sets forth the 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 2024 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 2024 Annual Meeting is more than 30 days before or more than 70 days after such anniversary date. For our 2024 Annual Meeting, our Corporate Secretary must receive the proposal or nomination between December 29, 2023 and January 28, 2024. If the 2024 Annual Meeting is held earlier than March 28, 2024 or later than July 6, 2024, the proposal or nomination should be received no earlier than the close of business on the 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 2024 Annual Meeting or (b) the 10th day following the day on which the date of the 2024 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 The Governance and Nominating Committee will also consider nominations by stockholders who recommend candidates for election to the 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 2024 Annual Meeting of Stockholders (Without Being Included in the Proxy Materials).”
APPENDIX A NRG ENERGY, INC.
AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN ARTICLE I
PURPOSE AND SCOPE OF THE 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 authorized 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 accrue 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 number 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 such person in connection with or resulting from any claim, action, suit, or proceeding to which 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 amounts 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 defend 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 Company’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 convenience of reference only, and in the event of any conflict, the text of this Plan, rather than such titles or headings, shall control. 6.12
Arbitration In the event of any dispute between the Employer and a Participant with respect to this 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]](https://files.docoh.com/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:KEEP THIS PORTION FOR YOUR RECORDSTHIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLYD97320-P86311For Against AbstainFor Against Abstain! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !! ! !NRG ENERGY, INC.C/O OFFICE OF GENERAL COUNSEL804 CARNEGIE CENTERPRINCETON, NJ 08540-6213The Board of Directors recommends a vote FOR thenominees listed under Proposal 1, FOR Proposals 2 and3, One Year for Proposal 4 and FOR Proposal 5.NRG ENERGY, INC.1. To elect ten directors.1b. Antonio Carrillo1a. E. Spencer 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, NRG Energy, Inc.’sexecutive compensation.5. To ratify the appointment of KPMG LLP as NRG Energy, Inc.’sindependent registered public accounting firm for the2023 fiscal 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 themeeting or any adjournment thereof.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.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
![[MISSING IMAGE: px_annualmeeting02-bw.jpg]](https://files.docoh.com/DEF 14A/0001104659-23-032997/px_annualmeeting02-bw.jpg) D97321-P86311(Continued and to be signed on reverse side)Proxy — NRG Energy, Inc.ANNUAL MEETING OF STOCKHOLDERSApril 27, 2023 9:00 A.M. ETThis Proxy/Voting Instruction Card is Solicited on Behalf of the Board of Directors for the 2023 Annual Meeting of Stockholders.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, 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 2023 Annual Meeting of Stockholders of the Company to be held on April 27, 2023, at 9:00 a.m. (Eastern Time)live via the Internet at 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.THIS PROXY WILL BE VOTED AS DIRECTED. IF NOT OTHERWISE DIRECTED, THIS PROXY WILL BE VOTED "FOR" THE NOMINEES LISTED UNDER PROPOSAL 1, "FOR" PROPOSALS 2 AND 3, 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.________________________________________________________________________________________________________________________________________________________________________________________________________________________Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:The Notice and 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.
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