NRG Energy CEO Departs Amid Elliott's Board Overhaul - What's Going On?

NRG Energy Inc NRG appointed Lawrence Coben as Interim President and CEO, replacing Mauricio Gutierrez.

NRG disclosed the appointment of four new independent directors under a cooperation agreement with Elliott Investment Management L.P.

These appointments are part of NRG's previously announced Board refreshment process. The company expects the size of the Board to be reduced to 11 members in H2 FY24.

NRG will also conduct a comprehensive review of its operations and cost structure to identify additional opportunities to become more efficient and enhance capital return to shareholders.

FY23 & FY24 Outlook: NRG reaffirmed FY23 adjusted EBITDA of $3.150 billion - $3.300 billion, operating cash flow of $1.750 billion-$1.900 billion, and FCFbG of $1.725 billion-$1.875 billion.

NRG reaffirmed FY24 adjusted EBITDA of $3.300 billion - $3.550 billion, operating cash flow of $1.825 billion- $2.075 billion, and FCFbG of $1.825 billion- $2.075 billion.

Capital Allocation & Cost Savings: NRG also reiterated its 2024 capital allocation plan, which comprises a debt reduction of $500 million, share repurchases of $825 million, and an 8% increase of the annual common dividend per share to $1.63 consistent with its 7%-9% long-term growth target. 

Also, the company reiterated its cost savings plan of a new $150 million cost reduction initiative (to be completed by FY25, $300 million in Direct Energy cost synergies to be achieved by the end of FY23, and $100 million in cost synergies related to the Vivint acquisition (completed by 2025).

Earlier this month, NRG Energy reported Q3 EPS of $1.41, missing the consensus of $4.04, and sales of $7.95 billion, missed the analyst consensus of $10.95 billion.

Price Action: NRG shares are trading lower by 2.66% at $46.80 on the last check Monday.