NRG Energy CEO ‘Not Going Anywhere’ Despite Pressure From Activist Investor Elliott

(Bloomberg) -- The chief executive officer of NRG Energy Inc. vowed to fight for his job, citing stronger-than-expected earnings to be announced Tuesday, despite an activist investor calling for his ouster.

“I’m not going anywhere,” CEO Mauricio Gutierrez said in a telephone interview. “Right now my focus is on executing this strategy.”

That strategy involves NRG Energy’s move from being a traditional power generator to a company focused on supplying energy for smart homes. The company argues this is the best way to fend off increasing pressure from investor Elliott Investment Management LP. 

NRG will report better-than-expected performance for the second quarter thanks to strong operations in its core energy business and the first full quarter including the recent Vivint Smart Home Inc. acquisition, Gutierrez said. 

Share of NRG closed Tuesday at $37.52. The stock is down 8% since the Vivint deal was announced Dec. 6.

In May, Elliott excoriated NRG’s $2.8 billion acquisition of Vivint, a leading home security provider, as the power industry’s “worst deal” of the decade because of the price tag and because it created a distraction from the company’s main power business. Elliott then demanded Gutierrez be replaced. 

Gutierrez said the second-quarter results are evidence NRG is heading in the right direction. The company said it generated $819 million in earnings before interest, taxes, depreciation and amortization in the three months ended June 30, up from $386 million a year earlier. Analysts expected a gain of $763 million. NRG is reaffirming its 2023 adjusted ebitda guidance of about $3 billion to $3.25 billion, and Gutierrez said the company is trending toward the top of that range.   

Vivint is foremost a technology platform that will give NRG the ability to manage devices, which can include smart thermostats and appliances, Gutierrez said. “For me this is the most exciting part of the power industry today. Vivint is an integral part of the strategy,” he said.

NRG’s power generating fleet performed more in line with expectations, Gutierrez said. The W.A. Parish coal-fired plant in Texas is slated to return to service by the end of this month. The company also grew its customer base in the second quarter by 7% from its new smart home unit and retail energy by about 2%, he said.  

©2023 Bloomberg L.P.