NRG Energy's stock rallies after Elliott repeats its call to oust CEO

By Tomi Kilgore

NRG responds to Elliott, saying it 'fully supports' CEO Mauricio Gutierrez

Shares of NRG Energy Inc. charged up toward a near seven-month high on Tuesday after activist investor Elliott Investment Management LP once again urged the energy utility to name a new chief executive officer and enhance its board of directors.

Elliott, which has a $1 billion investment, or more than a 13% interest, in NRG, said the company's recent actions showed that the "true cause" of its underperformance was that NRG CEO Mauricio Gutierrez has "lost the confidence of the core investor base, and the board lacks the will to make the right decision for the company."

Elliott said it believes that there is a "readily actionable path" to create more than $5 billion of value at NRG but that management and board changes will be needed to realize that value.

NRG's (NRG) stock rallied 1.7% in afternoon trading, putting it on track to close at its highest price since Dec. 5, 2022. It has lost 5.4% over the past 12 months, while the Utilities Select Sector SPDR exchange-traded fund (XLU) has declined 5.4% and the S&P 500 has advanced 12.3%.

NRG responded to Elliott by saying it "fully supports" Gutierrez and the strategy the company has been executing to boost shareholder value.

"We are confident that our plan will deliver substantial additional near- and long-term value," an NRG spokesperson said in an emailed statement to MarketWatch. "We appreciate our continuing dialogue with all NRG shareholders and look forward to providing updates on our progress."

Gutierrez joined NRG in 2004 and was named CEO in December 2015. Since the end of 2015, NRG's stock has rocketed 210.3%, while the SPDR utilities ETF has advanced 52% and the S&P 500 has run up 114.3%.

-Tomi Kilgore

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06-27-23 1547ET

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