Activist Investor Pressures NRG Energy To Change CEO: Report

NRG Energy Inc NRG is facing pressure from the activist investor Elliott Investment Management for expelling its Chief Executive Officer (CEO), Mauricio Gutierrez.

Elliott is reportedly talking to potential candidates for replacing NRG CEO and other top executives, as per WSJ. 

Last month, Elliott acquired a 13% economic interest (around $1 billion) in the company and stated its motive to restructure the board and initiate cost-saving measures and a strategic review of Vivint, the home services unit of the company. 

Elliott called Vivint's buyout "the single worst deal in the power and utilities sector during the past decade."

As per the report, an NRG spokesperson said in an email that the company "looks forward to discussing NRG's strategic plan" with shareholders at an investor day today morning and further added, "The board fully supports NRG's CEO Mauricio Gutierrez and management team and the strategy they are executing to drive substantial shareholder value."

In 2017, Elliott made a significant investment in NRG and appointed two new board members, pushing the company to change its business plans and consider asset sales and debt reduction. 

Earlier, Elliott targeted major tech and energy companies such as Salesforce Inc CRM, PayPal Holdings Inc PYPL and Duke Energy Corp DUK, forcing executive changes. 

This month, NRG named Bruce Chung the new Chief Financial Officer, replacing Alberto Fornaro, effective June 1, 2023.

Also, the company recently disclosed a deal to sell its 44% equity interest in South Texas Project Electric Generating Station to Constellation Energy Corp CEG for $1.75 billion.

Price Action: NRG shares are trading higher by 3.34% at $35.01 premarket on the last check Thursday.