Mark "Mac" McFarland
About Mark “Mac” McFarland
Mark “Mac” McFarland, 55, has been President, Chief Executive Officer and a Director of Talen Energy Corporation since May 2023. He holds an MBA from the University of Delaware and a B.S. in Civil Engineering (environmental concentration) from Virginia Tech, is a licensed professional engineer, and completed the MIT Reactor Technology Course for Utility Executives . Under his leadership in 2024, Talen delivered Adjusted EBITDA of $770 million, Adjusted Free Cash Flow of $283 million, net income of $1,013 million, fleet-wide Equivalent Forced Outage Factor of 2.24%, record safety, and a TSR of $158.02 on a $100 baseline from the July 10, 2024 Nasdaq listing through year-end; the company also returned $1.95 billion to shareholders since May 2023 through buybacks and other actions and executed the AWS data campus transaction and ERCOT asset sale .
Past Roles
| Organization | Role | Years | Strategic impact |
|---|---|---|---|
| California Resources Corporation (CRC) | President, CEO & Director | Oct 2020–May 2023 | Led energy transition strategy; continues on CRC board and as Chairman of Carbon TerraVault subsidiary . |
| GenOn Energy | Executive Chairman; previously President & CEO | Exec Chair (post-2018) through Sep 2022; CEO Apr 2017–Dec 2018 | Oversaw independent power producer during restructuring/turnaround period . |
| Luminant (EFH subsidiary) | CEO; previously Chief Commercial Officer | CEO 2013–2016; CCO 2008–2013 | Ran large IPP; led corporate development/strategy at EFH . |
| Exelon Corporation | SVP, Corporate Development (and other roles) | 1999–2008 | Corporate development experience at major utility . |
External Roles
| Organization | Role | Years | Notes |
|---|---|---|---|
| Nuclear Energy Institute | Director | Current | Industry policy/advocacy board role . |
| California Resources Corporation | Director | Current | Continues on CRC board; Chairman of Carbon TerraVault (CRC subsidiary) . |
| TerraForm Power; Bruin E&P Partners; Chaparral Energy | Director (prior) | Prior roles | Prior public/private board experience . |
Fixed Compensation
| Component | 2024 amount/terms |
|---|---|
| Base salary | $1,125,000 . |
| Target annual bonus | 135% of salary ($1,518,750 target) . |
| Actual 2024 bonus paid (STI) | $4,100,625 (corporate metrics certified at 200% plus individual multiplier) . |
| Sign-on bonus | $1,000,000 paid May 17, 2024; additional $1,000,000 payable May 17, 2025 . |
| Perquisites (2024) | Term life insurance $4,902; 401(k) match $20,700; 401(k) discretionary $6,900 . |
| Options policy | Company does not currently grant options/SARs . |
Performance Compensation
2024 Short-Term Incentive (STI) structure and results
| Metric | Weight | Threshold | Target | Max | 2024 Actual | Corporate payout |
|---|---|---|---|---|---|---|
| Safety (Lost Time Incident Rate) | 20% | 0.5 | 0.3 | 0.1 | 0.096 | 200% . |
| Equivalent Forced Outage Factor | 20% | 4.76% | 3.17% | 2.54% | 2.24% | 200% . |
| Adjusted EBITDA | 30% | $512mm | $640mm | $767mm | $770mm | 200% . |
| Adjusted Free Cash Flow | 30% | $120mm | $171mm | $223mm | $283mm | 200% . |
- Compensation Committee certified the 2024 corporate performance at 200% for all NEOs; CEO’s individual performance led to above-target payout, yielding $4,100,625 vs. $1,518,750 target .
Long-Term Incentives (LTI) – 2023 awards (granted post-emergence)
| Grant (2023) | RSUs (time-based) | PSUs (performance-based) | Target LTI value |
|---|---|---|---|
| McFarland | 223,141 | 334,711 | $23,625,000 . |
- 2023 RSUs vest in three equal annual installments from vesting commencement (May 17, 2023); 2024-vesting RSUs were settled in cash due to unique buyback/tender activity (committee does not expect future cash settlement) .
- 2023 PSUs vest on the third anniversary (or earlier at Change in Control) based on Adjusted Equity Value (AEV) per share; earnout 0–200% of target, plus a 1% market-cap “kicker” above maximum :
- Threshold $42.35 (0%); Target $52.52 (100%); Maximum $73.69 (200%); above max allocates 1% of market cap over max across executives as incremental PSUs .
- As of 12/31/24, PSUs tracked above 200% based on $201.47 share price; table reflects actual performance including kicker at year-end snapshot .
Long-Term Incentives – 2025 awards (retention-focused, cliff vest Feb 2027)
| 2025 Grant | RSUs | Target PSUs |
|---|---|---|
| McFarland | 7,025 | 25,172 . |
- 2025 RSUs: 100% vest on the second anniversary (Feb 2027); pro-rata vest on certain terminations; full vest on qualifying CIC within 12 months if assumed otherwise standard forfeiture on other separations .
- 2025 PSUs: AEV measured at second anniversary; 0–200% payout, plus 3% market-cap “kicker” above maximum; Threshold $247.20 (50%), Target $259.11 (100%), Maximum $271.31 (200%) .
2024 CEO STI payout summary
| Item | Value |
|---|---|
| 2024 STI target (135% of $1,125,000) | $1,518,750 . |
| Corporate factor | 200% . |
| Actual STI paid | $4,100,625 . |
Equity Ownership & Alignment
| Ownership/awards (as of 12/31/24 unless noted) | Amount |
|---|---|
| Beneficial ownership (common shares) | 74,280 (<1%) . |
| Unvested RSUs outstanding | 148,762 ($29,971,080 FMV at $201.47) . |
| Unearned PSUs tracking at actual performance | 747,920 ($150,683,442 FMV at $201.47) . |
| Shares/units vested in 2024 | 74,380 RSU equivalents; settled in cash for 2024 . |
| Stock ownership guidelines | CEO 5x base salary; unvested RSUs/PSUs count toward compliance . |
| Hedging/pledging | Prohibited; no margin/pledges allowed . |
Notes on selling pressure and vesting overhang:
- 2023 award shares received upon vesting are generally restricted from sale until the earlier of a Change in Control or the third anniversary of the vesting commencement date (May 17, 2026), limiting near-term sale pressure; 2024 RSU tranche was cash-settled, further reducing forced selling needs during 2024 .
- Insider trading policy imposes blackout periods and requires legal compliance for 10b5‑1 plans .
Employment Terms
| Provision | CEO terms |
|---|---|
| Appointment/role | CEO & Director since May 2023 . |
| Agreement term | Three-year employment agreement . |
| Non-compete / non-solicit | In effect during employment and for 12 months post-termination; perpetual confidentiality/non-disparagement . |
| Severance (no cause / Good Reason) | 2x (salary + target bonus) paid over 24 months; accelerated vest of any unpaid sign-on bonus ($1,000,000 remaining as of year-end) . |
| Death/Disability | Pro-rated bonus for year of termination; equity treated per plan terms . |
| Change in Control (CIC) | Single-trigger full vesting of all RSUs and PSUs at CIC (PSUs at performance as implied by AEV at CIC) . |
| Clawback | Nasdaq/SEC-compliant; recovers excess incentive-based comp upon a restatement (3 prior fiscal years) . |
| Good Reason/Cause definitions | Standard definitions for material adverse change, pay cut, relocation, breach; and for fraud, misconduct, violations, etc. . |
Potential payouts (illustrative, using $201.47 per share at 12/31/24):
- Termination without Cause/with Good Reason: $6,287,500 cash + $29,970,812 accelerated RSUs = $36,258,312 total .
- CIC (with or without termination): equity value $180,654,254 reflecting full RSU acceleration and PSUs at 223% of target (incl. kicker) at $201.47 .
Board Governance
- Director since 2023; not independent (as CEO). Board chair is independent (Stephen Schaefer), addressing CEO/Chair separation; McFarland is not on any committees .
- Independent directors held four executive sessions in 2024; Board held 4 scheduled and 7 unscheduled formal meetings; each director attended 100% of scheduled meetings (≥85% of all meetings) .
- Committee composition underscores independence: Audit (Hyde chair), Compensation (Horton chair), Nominating & Governance (Abbas chair), Risk Oversight (Nigro chair) .
Performance & Track Record
| Measure | 2024 result | Context |
|---|---|---|
| Net income | $1,013 million | Pay-versus-performance disclosure . |
| Adjusted EBITDA | $770 million | STI metric; exceeded “max” . |
| Adjusted Free Cash Flow | $283 million | STI metric; exceeded “max” . |
| Safety (LTIR) | 0.096 | Better than “max” . |
| Forced outage factor | 2.24% | Better than “max” . |
| TSR (7/10/24–12/31/24) | $158.02 on $100 baseline | S&P Utility Index peer TSR $109.11 . |
| Strategic actions | AWS data center sale and long-term PPA; ERCOT asset sale; $1.95bn returned to shareholders since May 2023 | As described in CEO performance assessment . |
Compensation Committee Analysis (governance and benchmarking)
- Independent Compensation Committee (Horton chair; Abbas, Hyde) with independent consultant Lyons, Benenson & Company Inc. (LB & Co.) .
- Peer group for 2024 determinations includes major utilities and IPPs (e.g., Vistra, NRG, Constellation, AES, PPL, CMS, First Solar) .
- Company currently emphasizes RSUs/PSUs (no options), uses multi-metric STI (safety, reliability, Adjusted EBITDA, Adjusted FCF), and maintains prohibitions on hedging/pledging plus ownership guidelines (CEO 5x salary) .
Director Service and Compensation (dual-role implications)
- McFarland serves as both CEO and Director; the independent Chair and fully independent key committees mitigate typical dual-role governance risks; McFarland receives no additional director pay (director comp table excludes CEO) .
- Independence status: Board determined six directors are independent; CEO is not listed as independent, consistent with market practice .
Related Party Transactions and Red Flags
- Major shareholder transactions: Company repurchased shares from Rubric Capital affiliates in July 2024 ($280mm) and December 2024 (upsized to $1.0bn), approved by Board and Audit Committee under related-party policy .
- Clawback policy in place; prohibition on hedging and pledging; no stock option grants; no disclosed tax gross-ups; no pension/SERP; no nonqualified deferred comp .
Equity Ownership & Vesting Schedule Detail (CEO)
| Item | Quantity/terms |
|---|---|
| 2023 RSUs | 223,141; vest 1/3 annually from May 17, 2023; 2024 tranche cash-settled . |
| 2023 PSUs | 334,711 target; cliff at May 17, 2026 on AEV schedule with 0–200% + 1% kicker; as of 12/31/24 tracking >200% . |
| 2025 RSUs/PSUs | 7,025 RSUs and 25,172 target PSUs; cliff vest Feb 2027; PSUs 0–200% + 3% kicker . |
| Sale/transfer restrictions | 2023 award shares not transferrable until earlier of CIC or third anniversary of vesting commencement (May 17, 2026) . |
Investment Implications
- Alignment: Compensation is highly performance-levered via PSUs tied to equity value and multi-metric STI; strict anti-hedging/pledging and 5x salary ownership guideline support alignment with shareholders .
- Retention risk: Large unvested LTI overhang (2023 PSUs through May 2026; 2025 RSUs/PSUs cliff in Feb 2027) plus a remaining $1,000,000 sign-on payment in May 2025 create strong retention incentives; for the CEO, termination without cause/Good Reason accelerates all RSUs and time-vests PSUs (remain performance-eligible) .
- Selling pressure: 2023 award transfer restrictions until May 2026 and 2024 cash settlement of the RSU tranche reduce near-term stock sale pressure; insider policy imposes blackout windows and 10b5‑1 compliance .
- Change-in-control sensitivity: Single-trigger vesting of all equity at CIC can be shareholder-unfriendly and may create deal-related acceleration; note that PSUs vest based on AEV at CIC (can be value-accretive) .
- Execution: 2024 outperformance on safety, reliability, Adjusted EBITDA/FCF, strategic portfolio actions (AWS, ERCOT sale), and substantial buybacks under McFarland’s tenure support pay-for-performance; watch sustainability of FCF amid data center build-outs and commodity cycles, given PSU AEV hurdles step up materially in 2025 awards ($247–$271/share range) .