Lawrence S. Coben
NRG ENERGYAbout Lawrence S. Coben
Lawrence S. Coben, 66, is President, Chief Executive Officer, and Chair of the Board of NRG Energy, Inc. (permanent CEO since August 1, 2024; interim CEO from November 2023) and has served on the Board since 2003; he is not independent as CEO and holds no committee memberships . Under his tenure, NRG’s 3-year TSR drove a 200% payout on RPSUs (98th percentile vs S&P 500 constituents; ~156% absolute TSR), while FY2024 AIP results achieved 183% of target on corporate metrics (Adjusted FCFbG above maximum; Adjusted EBITDA between target and max) . He previously served as Chair since 2017 and transitioned NRG from an interim RSU-heavy CEO package in 2023 to a performance-based RPSU/AIP structure in 2024 aligned to EBITDA, FCF, and ESG metrics .
Past Roles
| Organization | Role | Years | Strategic Impact |
|---|---|---|---|
| NRG Energy, Inc. | Interim President & CEO | Nov 2023–Aug 2024 | Stabilized leadership; aligned 2023 pay structure with at-risk equity; maintained strategy execution |
| NRG Energy, Inc. | Chair of the Board | 2017–present | Board leadership through strategy, capital allocation, and CEO transition |
| Tremisis Energy Corporation LLC & affiliates | Chairman & CEO | 2003–2017 | Energy investment, transactions, development initiatives |
| Sunrise Partners L.P. | Senior Principal | 2001–2004 | Energy investing; financing and transactions |
| Independent Consultant | Consultant | 1997–2001 | Strategic/financial advisory |
| Bolivian Power Company | Chief Executive Officer | 1994–1996 | Utility leadership and operations in LATAM |
| Catalyst Energy Corporation | Founder & Senior Vice President | 1983–1988 | Early alternative energy company founder; sustainable project development |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Cox ABG | Director | Dec 2024–present | Public company board |
| Freshpet, Inc. | Director | Nov 2014–Apr 2024 | Former public company board |
| University of Pennsylvania Museum of Archaeology & Anthropology | Consulting Scholar | 2012–present | Academic engagement |
| Escala Initiative (formerly Sustainable Preservation Initiative) | Executive Director | 2011–2024 | Social enterprise/NGO leadership |
Fixed Compensation
| Item | FY2023 | FY2024 | Notes |
|---|---|---|---|
| Base Salary ($) | 100,000 | 1,450,000 (as permanent CEO, effective Aug 1, 2024) | 2023 reflects interim CEO election to minimal cash salary |
| Target AIP (% of Salary) | N/A (not AIP-eligible in 2023) | 125% (prorated for 8/1–12/31/2024) | CEO target per employment agreement |
| Actual AIP Paid ($) | N/A | 1,519,520 (200% payout incl. +9% modifier) | FY2024 corporate metrics yielded 183% before IPF |
Performance Compensation
- LTIP design: CEO equity is predominantly RPSUs measured on 3-year relative TSR vs S&P 500; above-median (≥55th percentile) required for target, with a stricter hurdle (≥65th percentile) if absolute TSR < -15%; max value capped at 6x target .
- FY2024 CEO grant: RPSUs only at transition to permanent CEO; grant date 8/1/2024; target grant-date value $3,300,791; threshold 9,176 / target 36,704 / max 73,408 units .
- 2022–2024 RPSU cycle: Paid 200% on 1/2/2025 (98th percentile relative TSR; ~156% absolute TSR) .
AIP metrics and outcomes:
| Metric | Weight | FY2023 Target/Result | FY2023 Payout | FY2024 Target/Result | FY2024 Payout |
|---|---|---|---|---|---|
| Adjusted FCFbG ($mm) | 35% (2023) / 45% (2024) | Target $1,665 / Result $1,869 | 200% | Target $1,940 / Result $2,153 | 200% |
| Adjusted EBITDA ($mm) | 35% (2023) / 40% (2024) | Target $3,146 / Result $3,289 | 145% | Target $3,400 / Result $3,690 | 185% |
| Credit Ratio | 15% (2023) | Target 3.22x / Result 2.75x | 200% | — | — |
| ESG Composite | 15% (2023 & 2024) | 140% | 140% | 128% | 128% |
| Weighted Corporate Result | — | 172% | — | 183% | — |
| Individual Performance Factor | — | +16% (eligible NEOs; CEO not AIP-eligible in 2023) | — | +9% (CEO) | — |
| Final AIP Payout | — | 200% for eligible NEOs | — | 200% (CEO) | — |
Equity Ownership & Alignment
| Item | Detail |
|---|---|
| Beneficial Ownership | 376,038 common shares; includes 134,362 DSUs + 16,069 DERs (payable upon ceasing Board service), and 167,589 vested and unsettled RSUs; excludes 42,562 unvested RSUs, 103,724 unearned RPSUs, and 5,345 DERs; <1% of outstanding shares (203,666,967) as of Mar 3, 2025 |
| Ownership Guidelines | CEO required: 6.0x salary; Actual: 28.7x as of Mar 3, 2025 (closing price $100.25) |
| Hedging/Pledging | Prohibited for executives and directors (anti-hedging and anti-pledging policy) |
| Vested but Unsettled | 167,589 RSUs (settlement schedule impacts potential selling cadence) |
| Key Vesting Dates | 2023 Interim CEO RSUs vested 12/15/2024; convert to common over three years: one-third each on 12/15/2024, 12/15/2025, 12/15/2026 . 2024 CEO RPSUs scheduled to vest on 8/1/2027 subject to performance (36,876 shown as vesting tranche inclusive of DERs timing) . |
Employment Terms
| Provision | Terms |
|---|---|
| Agreement | At-will; Employment Agreement dated Aug 1, 2024 |
| Base/Bonus Targets | Base $1,450,000; AIP target 125% of salary (FY2024 prorated) |
| LTIP Target (2025+) | 825% of base salary (CEO) |
| Severance (no CIC) | If terminated without cause or for good reason: 2x base salary; prorated target bonus for year of termination; 18 months COBRA reimbursement; accrued compensation |
| Severance (with CIC, double trigger within 24 months) | 3x (base salary + target bonus); other benefits similar to above |
| Excise Tax | Best-net cutback (no excise tax gross-up) |
| Non-Compete/Non-Solicit | 1-year post-termination non-compete and non-solicit; confidentiality and cooperation obligations |
| Clawback | NYSE-compliant policy covering erroneously awarded incentive-based comp on restatement; additional plan-level clawbacks; no indemnification for clawback losses |
Board Governance and Director Service
- Roles and independence: Chair and CEO roles combined in Aug 2024; Lead Independent Director appointed (Antonio Carrillo) to mitigate dual-role concerns; all standing committees comprise independent directors; Coben is not independent as CEO and holds no committee seats -.
- Board process: Executive sessions led by the Lead Independent Director; annual performance evaluations (with third-party facilitation in alternating years); each director attended >75% of Board/committee meetings in 2024 .
- Director compensation: Employee directors (including CEO) receive no director pay .
Say-on-Pay & Shareholder Feedback
| Year | Say-on-Pay Support |
|---|---|
| 2023 vote (covering FY2022 comp) | 96% |
| 2024 vote (covering FY2023 comp) | ~79% |
The Compensation Committee engages Pay Governance as independent advisor and routinely adjusts design after outreach; 2024 outreach engaged holders of ~40% of shares outstanding, with CEO and Lead Independent Director participating in select meetings .
Compensation Structure Analysis
- 2023 interim period: Coben elected a symbolic $100k salary with the remainder as time-based RSUs that vest and convert over three years, signaling alignment but lowering near-term performance linkage (since RSUs are time-based) .
- 2024 transition to permanent CEO: Rebalanced to standard CEO structure with high “at-risk” mix—RPSUs tied to 3-year relative TSR (67% of LTIP for NEOs generally) and an AIP focused on Adjusted FCFbG (45%), Adjusted EBITDA (40%), and ESG (15%)—restoring strong pay-for-performance alignment .
- Performance rigor: RPSUs require above-median performance for target, with tightened thresholds in down markets; 2022–2024 cycle maxed at 200% on exceptional TSR, evidencing leverage both ways .
Performance & Track Record
- FY2024 performance highlights: Exceeded the midpoint of raised guidance for financial metrics; Adjusted EBITDA of $3,690mm and Adjusted FCFbG of $2,153mm supported a 183% corporate AIP result; returned $1.263bn to shareholders (repurchases + dividends) and achieved target leverage metrics a year early .
- TSR and LTIP: 98th percentile relative TSR and ~156% absolute TSR over the latest 3-year period drove a 200% RPSU payout on 1/2/2025 .
- Pay-versus-performance disclosure: Value of a $100 investment in NRG stock reached 268.43 at YE2024 vs 134.24 for the UTY peer index; CEO “compensation actually paid” reflects equity value sensitivity to TSR .
Risk Indicators & Governance Controls
- Prohibitions on hedging/pledging and robust stock ownership requirements (CEO 6x; Coben at 28.7x) support alignment; NYSE-compliant clawback enforced by the Compensation Committee .
- Double-trigger CIC; no excise tax gross-ups; independent Compensation Committee with Pay Governance engaged .
Investment Implications
- Alignment: High “at-risk” mix (RPSUs + AIP) with above-median TSR hurdle and cash metrics (Adjusted EBITDA/FCFbG) suggests strong pay-for-performance alignment; owner-operator posture shown by 28.7x ownership multiple and no pledging .
- Vesting overhang and supply: Significant vested-but-unsettled RSUs (167,589) and scheduled conversions from interim RSUs could create episodic selling pressure around settlement dates (12/15/2025, 12/15/2026), though anti-pledging reduces leverage risks .
- Retention/transition risk: At-will arrangement with market-typical severance (2x) and CIC terms (3x) plus 1-year non-compete/non-solicit mitigate abrupt transition risk; double-trigger mitigates windfall risk in M&A .
- Governance balance: Combined Chair/CEO compensated by a strong Lead Independent Director model and fully independent committees; 2024 say-on-pay at ~79% signals some investor scrutiny of prior-year design/changes, but structural improvements and outreach may normalize support - .