DEF 14A of Talen Energy Corp, Mar 19, 2025

DEF 14A of Talen Energy Corp

Filed Mar 19, 2025 · FY20240001628280-25-013816

Open on EDGAR

  1. PROPOSAL 1: ELECTION OF DIRECTORS

    PROPOSAL 1: ELECTION OF DIRECTORS The Board recommends that you vote “FOR” each of the director nominees. Our Board of Directors (the “Board”), acting on the recommendation of our Nominating and Corporate Governance Committee (the “Nominating and Governance Committee”), has nominated the individuals named below for election as directors until the 2026 annual meeting of stockholders (the “2026 Annual Meeting”). Each nominee is currently a director. Our Board recommends that the nominees below be elected as directors at the Annual Meeting.

  2. Director Nominees to Serve Until the 2026 Annual Meeting

    Director Nominees to Serve Until the 2026 Annual Meeting

  3. Director Nominees to Serve Until the 2026 Annual Meeting

    | Stephen Schaefer | Chairman & Independent Director | | Age: 61 Director Since: 2023 Chairman of the Board | Mr. Schaefer has served as the Chairman of our Board since May 2023. Since December 2018 and September 2020, respectively, Mr. Schaefer has served on the boards of directors of GenOn Holdings Inc. (where he also served as Chairman of the board of directors until May 2023) and Just Energy Group, Inc. (where he also served as Chairman of the Audit Committee and as a member of the Risk and Compensation Committees until December 2022). Mr. Schaefer also served on the board of directors of TexGen Power LLC (where he also served as Chairman of the board of directors) from May 2018 until the sale of the company in February 2024 and the board of directors of Alpine Summit Energy Partners (where he also served as Chairman of the Audit Committee and a member of the Reserves and Compensation Committees) from September 2021 until the sale of the company in November 2023. Mr. Schaefer has been actively involved in the deregulated natural gas and electricity markets since 1993. He was a Partner with Riverstone, a private equity firm focused on energy investing, from 2004 to 2015. While at Riverstone, he served on two of its investment committees and was primarily responsible for conventional power and renewable energy investments. Prior to joining Riverstone, Mr. Schaefer served as a Managing Director with Huron Consulting Group, where he founded and headed its Energy Practice. From 1998 to 2003, he served as a Managing Director and Vice President with Duke Energy North America. Mr. Schaefer earned his B.S., magna cum laude, in Finance and Accounting from Northeastern University in 1987 and is a Chartered Financial Analyst. We believe that Mr. Schaefer’s extensive industry experience makes him well-qualified to serve on our Board of Directors. |

  4. Director Nominees to Serve Until the 2026 Annual Meeting

    | Mark “Mac” McFarland | President, Chief Executive Officer & Director | | Age: 55 Director Since: 2023 President and CEO | Mr. McFarland has served as the Chief Executive Officer and a Director of the Company since May 2023. Mr. McFarland oversees all aspects of the Company’s long-term strategy and overall performance including leadership of its wholesale power generation business, commercial operations, and its strategic growth initiatives. From October 2020 until May 2023, he served as President, Chief Executive Officer and a director of California Resources Corporation (“CRC”), an independent energy and carbon management company committed to energy transition, where he continues to serve on the board of directors and as the Chairman of Carbon TerraVault, a wholly owned subsidiary of CRC. Prior to his roles with CRC, Mr. McFarland served as Executive Chairman of GenOn Energy, an independent power producer, where he also served as President and Chief Executive Officer from April 2017 to December 2018 and continued as a member of the board of directors until September 2022. From 2013 to 2016, he served as Chief Executive Officer of Luminant Holding Company LLC (“Luminant”), a subsidiary of Energy Future Holdings Corporation (“EFH”), a large independent power producer and, from 2008 to 2013, served as both Chief Commercial Officer of Luminant and Executive Vice President, Corporate Development and Strategy of EFH. From 1999 to 2008, Mr. McFarland served in various roles at Exelon Corporation, including as Senior Vice President, Corporate Development. Mr. McFarland currently serves on the board of directors of the Nuclear Energy Institute, and previously served on the boards of directors of TerraForm Power, Bruin E&P Partners, and Chaparral Energy. Mr. McFarland earned his M.B.A. from the University of Delaware and his B.S. in Civil Engineering (Environmental Concentration) from Virginia Polytechnic Institute and State University. He received a professional engineer license in 1995 and has completed the MIT Reactor Technology Course for Utility Executives. We believe that Mr. McFarland’s extensive industry experience makes him well-qualified to serve on our Board of Directors |

  5. Director Nominees to Serve Until the 2026 Annual Meeting

    | Gizman Abbas | Independent Director | | Age: 52 Director Since: 2023 Committees: •Nominating and Governance (Chair) •Audit •Risk Oversight | Mr. Abbas has served as a Director since May 2023. Mr. Abbas has nearly 30 years of energy and investment experience. He has served on the board of directors of Prairie Operating Company, including as Chairman of the Audit Committee and as a member of the Compensation Committee, since May 2023, as Founding Principal of Direct Invest Development since December 2014, and on the board of directors of the New York Independent System Operator, including as Chairman of the Commerce & Compensation Committee and as a member of the Reliability & Markets Committee, since April 2021. Mr. Abbas served on the boards of directors of Crown Electrokinetics, including as Chairman of the Compensation Committee and as a member of the Audit and Governance Committees, from March 2021 to December 2022, Aranjin Resources Ltd., including as an Audit Committee Member from May 2016 to December 2020, KLR Energy Acquisition Corporation, including as Chairman of the Compensation Committee and a member of the Audit Committee, from January 2016 to May 2017, and Handeni Gold, including as an Audit Committee Member, from February 2012 to July 2017. Previously, Mr. Abbas was a founding Partner of the commodity investment business at Apollo Global Management, a Vice President at Goldman Sachs, an investment associate at Morgan Stanley, a Senior Project Engineer on oil and gas construction projects for Exxon Mobil Corporation, and a Co-Op Power Engineer at Southern Company. Mr. Abbas earned his B.S. in Electrical Engineering from Auburn University and his M.B.A. from Northwestern University’s Kellogg School of Business. We believe that Mr. Abbas’ executive, financial and investment experience makes him well-qualified to serve on our Board of Directors. |

  6. Director Nominees to Serve Until the 2026 Annual Meeting

    | Anthony Horton | Independent Director | | Age: 64 Director Since: 2023 Committees: •Compensation (Chair) •Audit | Mr. Horton has served as a Director since May 2023. Since March 2018, November 2021 and February 2023, respectively, Mr. Horton has served as Chief Executive Officer of AR Horton Advisors, Lead Independent Director for Team, Inc., and Independent Director for Equiniti Trust Company. Additionally, Mr. Horton served as an Independent Director of U.S. Renal Care from January 2023 to February 2024, Travelport GDS, UK from March 2020 to December 2023, Neiman Marcus’ Mariposa Holdings from April 2020 to September 2020, Seadrill Partners from January 2020 to May 2021, and Arena Energy from March 2020 to September 2020, among others, and served as Independent Director and Chairman of the board of directors of NanoLumens from May 2017 to May 2020. Mr. Horton has more than 25 years of energy and technology experience, including having served as Executive Vice President and CFO at EFH and as Senior Director of Corporate and Public Policy at TXU Energy. He also has experience serving on various boards of directors and committees of companies involved in turnarounds and restructuring matters. Mr. Horton earned his Master’s of Professional Accounting and Finance from the University of Texas at Dallas/Arlington and his B.B.A. in Economics and Management from the University of Texas at Arlington. He is a CPA, Chartered Financial Analyst, Certified Management Accountant, and Certified Financial Manager. We believe that Mr. Horton’s extensive financial and business expertise, including a diversified background of both senior leadership and director roles of public and private companies, makes him well-qualified to serve on our Board of Directors. |

  7. Director Nominees to Serve Until the 2026 Annual Meeting

    | Karen Hyde | Independent Director | | Age: 63 Director Since: 2023 Committees: •Audit (Chair) •Compensation | Ms. Hyde has served as a Director since May 2023. Until her retirement in 2022, Ms. Hyde served as Senior Vice President, Chief Compliance & Ethics Officer, Chief Audit Executive, and Chief Risk Officer of Xcel Energy. Across her 30 years with Xcel Energy, she served in various roles with increasing responsibility, including roles in rates and regulatory affairs, resource planning and acquisition, and risk management. She was also responsible for forecasting and production cost, expansion plan modeling, and evaluating the effectiveness of compliance programs and control frameworks. Ms. Hyde spent approximately a decade negotiating structured power purchase arrangements, including Xcel Energy’s initial renewable energy contracts, and was responsible for renewable energy compliance. Prior to joining Xcel Energy, she was a lead nuclear engineer as a civilian employee of the U.S. Department of Defense, where she was responsible for overhauling submarine reactors. Since 2013, Ms. Hyde has served with Volunteers of America CO Branch, including as Treasurer, on the board of directors, and as Chair of the Audit Committee. Ms. Hyde earned her M.S. in Mineral Economics from the Colorado School of Mines and her B.S. in Metallurgical Engineering from Lafayette College. Ms. Hyde is a certified Internal Auditor and holds Certification in Risk Management Assurance from the Institute of Internal Auditors. We believe that Ms. Hyde’s extensive industry, regulatory and risk management experience makes her well-qualified to serve on our Board of Directors. |

  8. Director Nominees to Serve Until the 2026 Annual Meeting

    | Joseph Nigro | Independent Director | | Age: 60 Director Since: 2023 Committees: •Risk Oversight (Chair) •Nominating and Governance | Mr. Nigro has served as a Director since May 2023. Mr. Nigro has served both as senior advisor to Blackstone Inc.’s energy transition group and on the board of directors of Kindle Energy LLC since July 2023. Mr. Nigro previously served as an advisor to the Exelon Chief Executive Officer until March 2023 after having served as Exelon’s Chief Financial Officer from May 2018 to October 2022. He was also a member of Exelon’s Executive Committee and the Chair of its Corporate Investment Committee. Prior to that, Mr. Nigro served as Chief Executive Officer of Constellation Energy, an Exelon operating division, from 2013 to 2018, after serving as its Senior Vice President of Portfolio Strategy. Before joining Constellation, he was the Senior Vice President of Portfolio Management and Strategy for the Exelon Power Team, where he also led the merger integration for the Exelon Power Team wholesale trading and marketing organization with Constellation. Mr. Nigro started his career with PECO Energy, now an Exelon company, in 1996 and also spent seven years prior with Phibro Energy, Inc., an independent oil trading and refining company. Mr. Nigro earned his Bachelor’s Degree in Economics from the University of Connecticut. He has also completed the Exelon Leadership Institute Program through the Northwestern University Kellogg School of Management, the University of Chicago Executive Development Program, and the MIT Reactor Technology Course for Utility Executives. Mr. Nigro also previously served on the boards of directors for the Chicago Public Library and the National Aquarium in Baltimore, as well as the Advisory Board for FM Global Mutual Insurance Company – Philadelphia/Washington region. We believe that Mr. Nigro’s extensive industry experience makes him well-qualified to serve on our Board of Directors. |

  9. Director Nominees to Serve Until the 2026 Annual Meeting

    | Christine Benson Schwartzstein | Independent Director | | Age: 44 Director Since: 2023 Committees: •Nominating and Governance •Risk Oversight | Ms. Benson has served as a Director since May 2023. She has served on the boards of directors of Delek US Holdings, Inc. (where she also serves as a member of the Environmental, Health and Safety and Technology Committees) since January 2024, Just Energy (U.S.) Corp. since February 2024, and Apollo Infrastructure Company (where she also serves as a member of the Audit Committee) since October 2023. Ms. Benson previously served as a member of Orion Infrastructure Capital’s (“OIC”) Senior Advisory Board after retiring as a Managing Director and Investment Principal in 2022. Before joining OIC, she spent 17 years in various roles at Goldman Sachs, most recently as a Managing Director in the Financing Group on the Structured Finance and Risk Management team in the Investment Banking Division, where she was responsible for the firm’s commodity structured finance efforts within Investment Banking. Prior to that, Ms. Benson was a Managing Director on the Energy Sales and Structuring teams in the Securities Division. She began her career at Goldman Sachs in 2004 as an analyst on the Energy team. Ms. Benson earned her A.B. in Earth and Planetary Sciences, magna cum laude, from Harvard University. We believe that Ms. Benson’s extensive industry and financial and risk management experience makes her well-qualified to serve on our Board of Directors. |

  10. BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

    BOARD OF DIRECTORS AND CORPORATE GOVERNANCE

  11. Board of Directors

    Board of Directors Our Board currently consists of seven members. The number of members of the Board will be determined from time to time by resolution of the Board. The Board consists of a single class, with each director to hold office until his or her successor is duly elected and qualified or until his or her earlier death, resignation, or removal. In evaluating director candidates, the Board assesses whether a candidate possesses the integrity, judgment, knowledge, experience, skills, and expertise that are likely to enhance the Board’s ability to manage and direct the Company’s affairs and business, including, when applicable, to enhance the ability of the committees of the Board to fulfill their duties.

  12. Director Selection and Criteria

    Director Selection and Criteria The Board has overall responsibility for the selection of candidates for nomination or appointment to the Board. The Nominating and Governance Committee recommends director candidates to the Board for nomination or appointment. The Board’s policy is to encourage selection of directors who will contribute to the Company’s overall corporate goals. The Board and the Nominating and Governance Committee annually review the experience and characteristics appropriate for Board members and director candidates in light of the Board’s composition at the time and the skills and expertise needed for effective operation of the Board and its committees. The director criteria the Board considers, based on the recommendations of the Nominating and Governance Committee, include: •Ethics: Directors should be persons of good reputation and character who conduct themselves in accordance with high personal and professional ethical standards, including the policies set forth in the Company’s Code of Business Conduct and Ethics. •Conflicts of Interest: Each director should not, by reason of any other position, activity, or relationship, be subject to any conflict of interest that would impair the director’s ability to fulfill the responsibilities of a member of the Board. •Independence: The Board will consider whether directors and nominees will be considered independent under the listing standards of the Nasdaq Global Select Market (“Nasdaq”) and the heightened independence standards for audit committees and compensation committees under securities laws. •Business and Professional Activities: Directors should maintain a professional life active enough to keep them in contact with the markets and/or the industry in which the Company is active. A significant position or title change will be seen as a reason to review a director’s membership on the Board. •Experience, Qualification, and Skills: Directors should have the educational background, experience, qualifications, and skills relevant for effective management and oversight of the Company’s management, which may include experience at senior executive levels in comparable companies, public service, professional service firms, or educational institutions. •Time / Participation: Directors should have the time and willingness to carry out their duties and responsibilities effectively, including time to study informational and background materials and to prepare for meetings. Directors should attempt to arrange their schedules to allow them to attend all scheduled Board and committee meetings. The Board will consider the participation in and contributions to the activities of the Board for any director recommended for renomination. •Board Evaluation: The Board will consider the results of the annual Board evaluation in its Board refreshment strategy. •Overboarding: Accepting a directorship with another company that the director did not hold when elected or appointed to the Board will be seen as a reason to review a director’s membership on the Board. •Diversity: The Board believes that diversity, including with respect to age, gender, sexual orientation, ethnicity, tenure, skills, and experience, brings a variety of viewpoints to the Board that is important to the effectiveness of the Board’s oversight of the Company. The Nominating and Governance Committee, and any search firm that it engages, include women and minority candidates in the pool from which the Nominating and Governance Committee recommends director candidates. •Tenure / Retirement: The Board does not believe that there should be a fixed term for directors but will consider each director’s tenure and the average tenure of the Board.

  13. Stockholder Recommendations for Board Nominees

    Stockholder Recommendations for Board Nominees The Nominating and Governance Committee evaluates director candidates recommended by stockholders in the same way it evaluates candidates recommended by all other persons. Stockholders wishing to submit recommendations for director candidates for consideration by the Nominating and Governance Committee must provide the information specified in the Company’s Second Amended and Restated Bylaws (the “Bylaws”) to the Company’s Corporate Secretary at Talen Energy Corporation, 2929 Allen Pkwy, Suite 2200, Houston, Texas 77019 within the time period specified in the Bylaws.

  14. Role of Compensation Consultant

    Role of Compensation Consultant In order to ensure that we continue to remunerate our executives appropriately, our Compensation Committee has retained Lyons, Benenson & Company Inc. (“LB & Co.”) as its independent compensation consultant. In such capacity, LB & Co. assists with the design of our compensation program, reviews our executive compensation policies and procedures, and currently assists our Compensation Committee by providing comparative market data on compensation practices and programs based on an analysis of peer competitors and by providing guidance on industry best practices. Our Compensation Committee retains the right to modify or terminate its relationship with LB & Co. or to select other outside advisors to assist our Compensation Committee in carrying out its responsibilities. The Compensation Committee considered the information provided by LB & Co. to determine executive compensation for fiscal year 2024. LB & Co. did not provide services to the Company other than the compensation advisory services described above.

  15. Peer Group

    Peer Group On an annual basis, the Compensation Committee reviews and discusses compensation data for our NEOs as compared to compensation data for similarly situated executive officers of our publicly-traded, peer group companies. Our peer group companies reflect those that have similar lines of business to the Company (i.e., independent power producer), are similar in size (as measured by revenues), have a similar market capitalization, and/or are competitors for executive and managerial talent. In advance of the fiscal year 2024 compensation determinations, the Compensation Committee worked with LB & Co. to develop our peer group using the factors noted above. The Compensation Committee and LB & Co. review the appropriateness of our peer group at least annually. The Compensation Committee believes the members of our fiscal year 2024 compensation peer group are appropriate because they reflect the Company’s market for executive talent and customers and are aligned with the Company’s scope of operations and complexity. The following companies comprised our fiscal year 2024 peer group:

  16. Peer Group

    | Fiscal Year 2024 Peer Group | | | | The AES Corporation | CMS Energy Corporation | OGE Energy Corp. | | ALLETE, Inc. | Constellation Energy Corporation | Pinnacle West Capital Corporation | | Alliant Energy Corporation | Energy, Inc. OGE Energy Corp. | TXNM Energy, Inc. | | Avista Corporation | First Solar, Inc. | Portland General Electric Company | | Black Hills Corporation | IDACORP, Inc. | PPL Corporation | | CenterPoint Energy, Inc. | NorthWestern Corporation | Vistra Corp. | | | NRG Energy, Inc. | |

  17. Elements of Compensation

    Elements of Compensation Our current executive compensation program, which is set by our Compensation Committee, consists of the following components: •base salary; •cash incentive awards linked to our overall annual performance based on a clearly defined set of operational and financial goals; •periodic grants of long-term equity-based compensation, such as restricted stock units and performance stock units; •other limited executive benefits and perquisites; and •employment agreements, which contain termination and change of control benefits. We combine these elements to formulate compensation packages that provide competitive pay, reward the achievement of financial, operational and strategic objectives and align the interests of our executive officers and other senior personnel with those of our stakeholders.

  18. Pay Mix

    Pay Mix We believe the compensation elements mentioned above collectively provide a well-proportioned mix of secure compensation, retention value, and at-risk compensation, while balancing short-term and long-term performance incentives and rewards. We strategically use each compensation element to provide our executives a measure of security in the minimum expected level of compensation, while motivating them to focus on business metrics that will produce a high level of short-term and long-term performance for the Company, as well as reducing the risk of recruitment of top executive talent by competitors. The mix of metrics used for our annual performance bonus and long-term incentive program likewise provides an appropriate balance between short-term financial performance and long-term financial and stock performance. For key executives, including our NEOs, the mix of compensation is weighted toward at-risk pay, such as annual incentives and long-term incentives. Maintaining this pay mix results fundamentally in a pay-for-performance orientation for our executives, which is aligned with our stated compensation philosophy of providing compensation commensurate with performance.

  19. Short-Term Cash Incentives

    Short-Term Cash Incentives The Company maintains a short-term incentive bonus program (the “STI Program”) pursuant to which certain employees, including our NEOs, are eligible to receive cash bonus payments equal to a percentage of base salary, with the amount of such payment based on the Company’s financial and operational performance as compared to target metrics, with individual awards subject to further adjustment based on management’s determination of individual performance. Cash payments under the STI Program are intended to offer incentive compensation by rewarding the achievement of corporate and individual performance objectives. We believe that establishing cash bonus opportunities helps us attract and retain qualified and highly skilled executives. These annual bonuses are intended to reward executive officers who have a positive impact on corporate results. Our Compensation Committee has authority to award annual cash bonuses to our NEOs under the STI Program. On an annual basis, or at the commencement of an executive officer’s employment with us, our Compensation Committee typically sets a target level of bonus compensation that is structured as a percentage of such executive officer’s annual base salary. Payouts under the STI Program were determined based on the Company’s achievement, during 2024, of safety goals (measured against “Lost Time Incident Rate” performance metrics, as defined below), “Equivalent Forced Outage Factor” performance metrics (as defined below), and financial goals (measured against Adjusted EBITDA and Adjusted Free Cash Flow performance metrics), as set forth and described in the table below.

  20. Short-Term Cash Incentives

    | Metric | Weight | Threshold Performance (50%) | | Target Performance (100%) | | Maximum Performance (200%) | | Performance Certified for 2024 | | | 2024 Safety (1) | 20% | 0.5 | | 0.3 | | 0.1 | | 0.096 | | | 2024 Forced Outage Performance (2) | 20% | 4.76 % | | 3.17 % | | 2.54 % | | 2.24 % | | | 2024 Adjusted EBITDA (3) | 30% | $512 | million | $640 | million | $767 | million | $770 | million | | 2024 Adjusted Free Cash Flow (3) | 30% | $120 | million | $171 | million | $223 | million | $283 | million |

  21. Short-Term Cash Incentives

    __________________ (1)Safety is measured as the total number of lost time injuries multiplied by 200,000 divided by the total number of hours worked (“Lost Time Incident Rate”). (2)Forced Outage Performance is measured as the fraction of a given period in which a generating unit is not available due to forced outages and forced derating (“Equivalent Forced Outage Factor”). (3)See Appendix A to this Proxy Statement for the definitions and reconciliations of non-GAAP financial measures. In February 2025, the Compensation Committee certified that, based on the above performance and weightings, performance metrics were collectively satisfied at 200% under the STI Program in respect of 2024 for each NEO. After performance is determined for the STI Program based on the metrics described above, an individual multiplier is applied to each NEO’s annual bonus amount to determine each NEO’s overall earned 2024 STI amount. Each NEO’s individual multiplier is determined by the Chief Executive Officer’s rating of the NEO’s individual performance (except his own) with the resulting multiplier determined in consultation with the Compensation Committee. The Board determines the individual rating for the Chief Executive Officer. Under the STI Program, the individual multipliers can range from 0% to 150%, which is then multiplied by the corporate performance achievement and each NEO’s target STI amount to obtain the actual bonus payable to each of our NEOs. The discussion below highlights the key factors in the determination of each NEO’s individual multiplier used in determining actual payouts for 2024. Mr. McFarland, President and Chief Executive Officer: In 2024, Mr. McFarland led the Company to generate $770 million of Adjusted EBITDA and $283 million of Adjusted Free Cash Flow while achieving record safety results and a 2.2% Equivalent Forced Outage Factor fleet-wide and cultivating a team-oriented culture to make these results possible. Under Mr. McFarland’s direction, the Company closed its initial transaction with AWS and developed a strategy for subsequent data power purchase agreement transactions, closed the high-value sale of our ERCOT assets, and improved the Company’s balance sheet using refinancings, lower debt costs, decreased margin, and letters of credit. The Company listed on Nasdaq in July 2024; Mr. McFarland successfully led the year-long investor relations campaign to gain shareholder and sell side awareness. These financial results positioned the Company to buy back more than 22% of its public float and return $1.95 billion to shareholders since emerging from restructuring in May 2023. As a result of Mr. McFarland’s strong leadership and performance as the Company’s President and Chief Executive Officer, the Board of Directors approved an above target STI payment for 2024. Mr. Nutt, Chief Financial Officer: In 2024, Mr. Nutt oversaw our share repurchase program and the successful execution and closing of our ERCOT portfolio sale. Mr. Nutt also teamed with our legal department to lead the Nasdaq uplisting process and drove the Company’s active engagement with its new investor base. His efforts to improve the Company’s balance sheet unlocked significant liquidity through collateral management and refinancing of significant portions of our capital structure. In addition, Mr. Nutt’s efforts were integral to the sale of the Cumulus Data Campus to AWS and development of the long-term AWS power purchase agreement. Mr. Nutt continued to lead the Company’s successful effort to reduce operating and general and administrative expense by $50 million on a per annum run rate. As a result of Mr. Nutt’s strong performance as the Company’s Chief Financial Officer, the Compensation Committee approved an above target STI payment for 2024. Mr. Berryman, Senior Vice President and Chief Nuclear Officer: In 2024, Mr. Berryman oversaw improvements at the Susquehanna station which increased Susquehanna’s generation capacity factor and lowered overall costs at the station, resulting in lower power delivery costs. While doing so, Mr. Berryman led the restoration of the Susquehanna station INPO standing to match our highest-performing peers and managed the successful response to several Nuclear Regulatory Commission inspections. Mr. Berryman’s team completed multiple significant nuclear fuel transactions, reducing fuel risk and mitigating fuel cost escalation. As a result of Mr. Berryman’s strong performance as the Company’s Chief Nuclear Officer, the Compensation Committee approved an above target STI payment for 2024. Mr. Wander, General Counsel and Corporate Secretary: In 2024, Mr. Wander managed the Company’s legal strategy supporting multiple significant asset and stock transactions, including taking a principal role in the AWS relationship and leading the Company’s engagement with PJM and FERC on capacity market reforms and co-located load issues. In addition, Mr. Wander drove our efforts to reach a Reliability-Must-Run agreement with a broad group of stakeholders and operate the Brandon Shores and H.A. Wagner plants through July 2029. Mr. Wander oversaw the legal and SEC processes to list our Common Stock on Nasdaq and led internal efforts to align the Company’s environmental, regulatory, and public affairs teams with the current regulatory environment and our new status as a public company. As a result of Mr. Wander’s strong performance as the Company’s General Counsel, the Compensation Committee approved an above target STI payment for 2024. Mr. Muller, Executive Vice President, Strategic Ventures: In 2024, Mr. Muller led the Company’s effort to sell the Cumulus Data Campus to AWS and create significant shareholder value with the long-term power purchase agreement with AWS. Subsequently, Mr. Muller oversaw efforts that achieved early release of full payment of the AWS escrow payment and managed the transition of our data campus team and activities to AWS. Mr. Muller had principal responsibility for our consolidation of 100% ownership in the Nautilus bitcoin facility and elimination of the related below-market power purchase agreement. Mr. Muller is responsible for the Company’s efforts to develop physical and virtual data center opportunities that leverage our asset footprint and he supports our development team efforts to explore strategic opportunities in combination with data center power purchase agreements. Mr. Muller also plays an active, market-facing role in the Company’s investor relations efforts. As a result of Mr. Muller’s strong performance as the Company’s Executive Vice President, Strategic Ventures, the Compensation Committee approved an above target STI payment for 2024. The table below sets forth the target levels, structured as a percentage of base salary, approved by the Compensation Committee under the STI Program for our NEOs for 2024 as well as the actual amounts paid to each of our NEOs (after applying both corporate performance and individual multipliers).

  22. Short-Term Cash Incentives

    | Executive | 2024 STI Target (% of Salary) | 2024 STI Target ($ Value) | 2024 STI Total Payout | | Mark McFarland | 135% | $1,518,750 | $4,100,625 | | Terry Nutt | 100% | 550,000 | 1,485,000 | | Brad Berryman | 100% | 550,000 | 1,485,000 | | John Wander | 100% | 550,000 | 1,485,000 | | Cole Muller | 100% | 500,000 | 1,350,000 |

  23. Long-Term Incentives

    Long-Term Incentives

  24. Equity Incentive Plan and Awards

    Equity Incentive Plan and Awards We believe that equity-based compensation is an important component of our executive compensation program and that providing a significant portion of our executive officers’ total compensation package in equity-based compensation aligns the incentives of our executives with the interests of our shareholders and with our long-term corporate success. Additionally, we believe that equity-based compensation awards enable us to attract, motivate, retain, and appropriately compensate executive talent. We believe equity awards provide executives with a significant long-term interest in our success by rewarding the creation of shareholder value over time. The Company maintains the Talen Energy Corporation 2023 Equity Incentive Plan (the “2023 Equity Plan”), a long-term equity incentive plan for employees and directors of the Company. Grants under the 2023 Equity Plan are denominated in shares of our common stock. Under the 2023 Equity Plan, participants may receive grants of shares, options to purchase shares, restricted stock, restricted stock units, performance-based awards, and other stock-based and cash-based awards upon terms and conditions determined by the Board, as delegated to the Compensation Committee. A total of 7,083,461 shares of our common stock have been reserved for issuance with respect to awards under the 2023 Equity Plan. 2023 Equity Awards Following emergence in 2023, grants of time-based restricted stock units (“RSUs”) and performance-based restricted stock units (“PSUs”) were made to the NEOs under the 2023 Equity Plan. The amount of each award was based on the executive’s scope of responsibility and contribution to value creation, market-based compensation data, and other relevant factors determined by our Compensation Committee in consultation with LB & Co. No grants of time-based RSUs and PSUs were made in 2024. The following sets forth the details of the grants made in 2023 to our NEOs under the 2023 Equity Plan.

  25. Equity Incentive Plan and Awards

    | Executive | 2023 Grants | | | | | | Target Annual LTI Award (% of Base Salary) | Number of RSUs | Target Number of PSUs | Target Value (in Dollars) | | Mark McFarland | 700% | 223,141 | 334,711 | $23,625,000 | | Terry Nutt | 400% | 62,338 | 93,507 | 6,600,000 | | Brad Berryman | 400% | 62,338 | 93,507 | 6,600,000 | | John Wander | 400% | 62,338 | 93,507 | 6,600,000 | | Cole Muller | 300% | 39,528 | 59,292 | 4,185,000 |

  26. Equity Incentive Plan and Awards

    The RSUs granted in 2023 function as a retention incentive and vest in equal annual installments over three years from the “vesting commencement date” (which is generally the grant date) and generally require continued service. The PSUs granted in 2023 vest upon achievement of specified per-share values of the Company’s common stock, plus any dividends paid during the term of the award (the “Adjusted Equity Value”), as of the third anniversary of the vesting commencement date (or, if sooner, the occurrence of a “Change in Control” (as defined in the 2023 Equity Plan)), subject to continued service through such date (except as set forth below). The number of PSUs that vest (“Earned PSUs”) can range from 0% to 200% of the target number of PSUs subject to the award, plus, in the case of certain executive officers (including the NEOs), if the maximum Adjusted Equity Value set forth in the award agreement is exceeded, an additional incentive in an amount equal to the holder’s proportionate share amongst the participating executive officers of 1% of the Company’s market capitalization above such maximum Adjusted Equity Value. The applicable Adjusted Equity Value hurdles are set forth below. The recipients may not sell or transfer any of the shares of common stock received upon vesting of RSUs and PSUs until the earlier of a Change in Control or the third anniversary of the vesting commencement date. For treatment of the outstanding RSUs and PSUs upon certain terminations of employment or the occurrence of a “Change in Control,” see the section below entitled “—Potential Payments Upon Termination or Change in Control.”

  27. Equity Incentive Plan and Awards

    | Performance Level | Adjusted Equity Value (per Share) | Earned PSUs (% of Target) (1) | | Threshold | $42.35 | 0% | | Target | 52.52 | 100% | | Maximum | 73.69 | 200% | | Above Maximum | > 73.69 | 1% of market capitalization implied by Adjusted Equity Value in excess of Maximum are allocated as incremental Earned PSUs (see above) |

  28. Equity Incentive Plan and Awards

    (1)No PSUs will become Earned PSUs if the Adjusted Equity Value is less than Threshold, and linear interpolation shall be used to determine the number of Earned PSUs to the extent that the Adjusted Equity Value is between the Threshold and Maximum amounts set forth in the table. Grants of RSUs and PSUs were not made in 2024. However, in light of the significant share repurchase activity undertaken by the Company, including the tender offer executed in June 2024, and to provide the NEOs with similar liquidity opportunities that were provided to our shareholders, the Compensation Committee determined that the portion of each NEOs’ RSUs that vested in 2024 would be settled in cash, rather than stock. This decision was the consequence of a unique set of market factors and transactions for the Company, and Compensation Committee does not anticipate that this treatment (for settlement of RSUs) will be provided in the future. 2025 Equity Awards After granting the 2023 equity awards, the Compensation Committee had anticipated that certain of the Company’s executive officers would not receive further equity award grants until May 2026 (the date the 2023 equity awards would fully vest). However, the Compensation Committee has determined that it is in the best interests of the Company and its stockholders to expedite subsequent grants as a further retentive tool, and approved grants of RSUs and PSUs in February 2025 to certain of our employees, including the NEOs. These new grants will provide continued alignment among the Company’s executive officers, other key leaders, and stockholders to increase enterprise value and a financial incentive for those officers and leaders to remain with the Company through at least February 2027 (the date that the new equity awards will vest). The Compensation Committee’s objective is, in part, to incent the executive officers and other key leaders with the incremental potential future value that could be realized by remaining with the Company after the scheduled May 2026 vesting of the 2023 equity grants. The new grants for the executive officers (including the NEOs) consist of (i) an ordinary course grant (consisting of 70% PSUs and 30% RSUs) with a value equal to two-thirds of the NEOs’ annual long-term incentive target amount (reflecting the two-year vesting period vs. a typical three-year vesting period, as described in more detail below) and (ii) a supplemental one-time retention grant (consisting of 100% PSUs) with a value equal to approximately 25% of the NEOs’ ordinary course annual long-term incentive target amount. These two components result in a combined grant value to each of the NEOs of approximately 92% of their full three-year ordinary course grants, and will cliff vest in February 2027. The amounts granted to our NEOs in February 2025 were as follows.

  29. Equity Incentive Plan and Awards

    | Executive | 2025 Grants | | | | Number of RSUs | Target Number of PSUs | | Mark McFarland | 7,025 | 25,172 | | Terry Nutt | 2,498 | 8,950 | | Brad Berryman | 1,963 | 7,032 | | John Wander | 1,963 | 7,032 | | Cole Muller | 2,141 | 7,672 |

  30. Equity Incentive Plan and Awards

    __________________ (1)No PSUs will become Earned PSUs if the Adjusted Equity Value is less than Threshold, and linear interpolation shall be used to determine the number of Earned PSUs to the extent that the Adjusted Equity Value is between the Threshold and Target or between the Target and Maximum amounts set forth in the table. The RSUs vest in full on the second anniversary of the grant date, provided that the recipient is still employed by or providing services to the Company on the vesting date. If the recipient’s employment or service is terminated by the Company without Cause (as defined in the 2023 Equity Plan or applicable employment agreement), due to the recipient’s death or Disability, or by the recipient for Good Reason (each, as defined in the applicable award or employment agreement), a pro rata portion (to reflect the portion of the vesting period during which the recipient was employed by the Company) of the RSUs will vest and be settled on the original vesting date. If the recipient’s employment is terminated by the Company without Cause or by the recipient for Good Reason within 12 months following a Change in Control (as defined in the 2023 Equity Plan), all unvested RSUs will immediately vest. If the recipient’s employment or service is terminated for any other reason, the unvested portion of the RSUs will be immediately forfeited without consideration. The PSUs vest upon achievement of the Adjusted Equity Value, as of the second anniversary of the vesting commencement date, subject to continued service through such date (except as set forth below). The number of Earned PSUs can range from 0% to 200% of the target number of PSUs subject to the award, plus, if the maximum Adjusted Equity Value set forth in the award agreement is exceeded, an additional incentive in an amount equal to the recipient’s proportionate share among the participating executive officers of 3% of the Company’s market capitalization above such maximum Adjusted Equity Value. The applicable Adjusted Equity Value hurdles are set forth below.

  31. Equity Incentive Plan and Awards

    | Performance Level | Adjusted Equity Value (per Share) | Earned PSUs (% of Target) (1) | | Below Threshold | < $247.20 | 0% | | Threshold | 247.20 | 50% | | Target | 259.11 | 100% | | Maximum | 271.31 | 200% | | Above Maximum | > 271.31 | 3% of market capitalization implied by Adjusted Equity Value in excess of Maximum are allocated as incremental Earned PSUs |

  32. Equity Incentive Plan and Awards

    __________________ (1)No PSUs will become Earned PSUs if the Adjusted Equity Value is less than Threshold, and linear interpolation shall be used to determine the number of Earned PSUs to the extent that the Adjusted Equity Value is between the Threshold and Target or between the Target and Maximum amounts set forth in the table. If the recipient’s employment or service is terminated by the Company without Cause, due to the recipient’s death or Disability, or by the recipient for Good Reason, the target number of PSUs subject to the award will be reduced pro-rata to reflect the portion of the performance period during which the recipient was employed by the Company (and will otherwise remain outstanding and eligible to vest based on actual performance). If the recipient’s employment is terminated by the Company without Cause or by the recipient for Good Reason within 12 months following a Change in Control and the PSUs are assumed by the surviving company, all unvested PSUs will remain outstanding and eligible to vest at the end of the performance period based on actual performance. Upon termination by the Company or the recipient for any other reason, all unvested PSUs will be canceled and forfeited. If the PSUs are not assumed by the surviving company in connection with a Change in Control, all PSUs will immediately vest based on the Adjusted Equity Value as of the Change in Control.

  33. Cumulus Long-Term Incentive Plan and Awards

    Cumulus Long-Term Incentive Plan and Awards The Company maintains the Cumulus Long-Term Incentive Plan (the “Cumulus LTIP”), a long-term cash incentive plan for certain employees, officers, and other service providers of the Company intended to incentivize the further growth and success of our provision of power to data center customers. Grants under the Cumulus LTIP provide participants with a portion of a bonus pool with a maximum value of $15.6 million from which payments are to be made in connection with the occurrence of designated milestones. The Board updated the applicable milestones under the Cumulus LTIP in February 2024 in connection with the Company’s sale transaction with Amazon Data Services, Inc. (“Amazon”) related to the Company’s data center campus located adjacent to the Susquehanna power station (the “Cumulus Data Campus Sale”), to include (i) receipt by Cumulus Data LLC and Cumulus Real Estate Holdings (the “Cumulus Entities”) of the initial payment of the purchase price from Amazon under the related sale transaction purchase agreement, (ii) the receipt by the Cumulus Entities of the distribution from certain transaction escrow accounts related to rezoning efforts, and (iii) the earlier of (x) the date that a certain Amazon affiliate commences power consumption following the Cumulus Entities’ fulfillment of a binding customer contract or (y) the date on which the first tranche of minimum commitments are triggered under the purchase agreement between certain Amazon affiliates and the Susquehanna Steam Electric Station. Grants under the Cumulus LTIP function as retention incentives and generally require continued employment for a participant to be eligible for any payment under the program. In September 2023, Mr. Muller received an initial grant under the Cumulus LTIP entitling him to participation in the original award pool (which provided him with value under the plan capped at $1.25 million), but following the Board’s amendment to the Cumulus LTIP in February 2024, he received a replacement award entitling him to a maximum payout of $1.3 million. In connection with the Cumulus Data Campus Sale in 2024, the Board, in accordance with the terms of the Cumulus LTIP, determined that certain of the milestones listed above had been met, and the amount earned and payable with respect to Mr. Muller’s award was $1,053,750. Mr. Muller continues to remain eligible to receive future payments with respect to his award upon subsequent transactions in accordance with the Cumulus LTIP. Under the Cumulus LTIP, if Mr. Muller’s position is eliminated without Cause in connection with a transaction that would otherwise trigger a bonus payment under the Cumulus LTIP, he will remain eligible for any bonus payment associated with the transaction. In the event of any other termination of employment, Mr. Muller will forfeit any further payments under the Cumulus LTIP.

  34. Employment Agreements

    Employment Agreements The Company has entered into employment agreements with each of the NEOs, each of which has a three-year term and provides for each of the compensation elements of the executive compensation program described above, including base salary, annual bonus, and long-term equity incentive awards. The employment agreements also provide for each NEO’s eligibility to participate in the Company’s employee benefit plans, policies and arrangements that are generally available to executive officers. Mr. McFarland’s employment agreement entitled him to a cash signing bonus of $1,000,000, which was paid on May 17, 2024, and a payment of $1,000,000 that is payable on May 17, 2025. Mr. Wander’s employment agreement also entitled him to a cash signing bonus, the remaining $250,000 of which was paid on June 19, 2024. The employment agreements also contain non-competition and non-solicitation restrictions applicable during the term of employment and for 12 months thereafter, as well as perpetual non-disparagement and confidentiality provisions. The employment agreements also provide for certain payments and benefits upon a termination by the Company without Cause or by the NEO for Good Reason or due to death or Disability, as described below in the section entitled “—Potential Payments Upon Termination or Change in Control.”

  35. Risk Assessment

    Risk Assessment The Company has determined that any risks arising from its compensation programs and policies are not reasonably likely to have a material adverse effect on the Company. The Company’s compensation programs and policies mitigate risk by combining performance-based, long-term compensation elements with payouts that are highly correlated to the value delivered to shareholders. The combination of performance measures for annual bonuses and the equity compensation programs, share ownership and retention guidelines for our NEOs, as well as the multiyear vesting schedules for equity awards, encourage NEOs to maintain both a short and a long-term view with respect to Company performance.

  36. Impact of Accounting and Tax Requirements on Compensation

    Impact of Accounting and Tax Requirements on Compensation The Board and our Compensation Committee consider tax deductibility and other tax implications when designing our executive compensation programs. However, we believe that there are certain circumstances where the provision of compensation that is not fully tax deductible, including by reason of Section 162(m) of the Code, is more consistent with our compensation objectives. Our Compensation Committee retains discretion and flexibility to award non-deductible compensation to our NEOs as it deems appropriate and in furtherance of our compensation philosophy and objectives. Another section of the Code, Section 409A, affects the manner by which deferred compensation opportunities are offered to our employees because Section 409A requires, among other things, that “non-qualified deferred compensation” be structured in a manner that limits employees’ abilities to accelerate or further defer certain kinds of deferred compensation. We intend to operate our existing compensation arrangements that are covered by Section 409A in accordance with the applicable rules thereunder, and we will continue to review and amend our compensation arrangements where necessary to comply with Section 409A. Further, Section 280G of the Code disallows a tax deduction with respect to “excess parachute payments” to certain executive officers of companies that undergo a change in control. In addition, Section 4999 of the Code imposes a 20% excise tax penalty on the individual receiving the “excess parachute payment.” Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans or programs and other equity-based compensation. “Excess parachute payments” are parachute payments that exceed a threshold determined under Section 280G of the Internal Revenue Code based on an executive officer’s prior compensation. In approving compensation arrangements for our NEOs, the Board considers all elements of the cost to us of providing such compensation, including the potential impact of Section 280G of the Code. However, the Board may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility of Section 280G of the Code and the imposition of excise taxes under Section 4999 of the Code when it believes that such arrangements are appropriate to attract and retain executive talent.

  37. Accounting for Stock-Based Compensation

    Accounting for Stock-Based Compensation We follow ASC 718 for our equity-based compensation awards. ASC 718 requires companies to calculate the grant date “fair value” of their equity-based awards using a variety of assumptions. ASC 718 also requires companies to recognize the compensation cost of their equity-based awards in their income statements over the period that an associate is required to render service in exchange for the award. Future grants of stock options, restricted stock, performance-based or other restricted stock units and other equity-based awards under our equity incentive award plans will be accounted for under ASC 718. The Compensation Committee regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to our equity incentive award plans and programs. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our equity awards with our overall executive compensation philosophy and objectives.

  38. Summary Compensation Table

    Summary Compensation Table The following table sets forth certain information with respect to compensation paid to, awarded to or earned by our NEOs for the years ended December 31, 2022, December 31, 2023, and December 31, 2024.

  39. Summary Compensation Table

    | Name and Principal Position | Year | Salary (1) | Bonus (2) | Stock Awards | Non-Equity Incentive Plan Compensation (3) | All Other Compensation (4) | Total | | Mark McFarland, President and Chief Executive Officer | 2024 | $1,125,000 | $1,000,000 | $— | $4,100,625 | $32,502 | $6,258,127 | | | 2023 | 683,654 | — | 27,667,227 | 1,210,079 | 13,782 | 29,574,742 | | | 2022 | — | — | — | — | — | — | | Terry Nutt, Chief Financial Officer | 2024 | 550,000 | — | — | 1,485,000 | 29,700 | 2,064,700 | | | 2023 | 253,846 | — | 9,860,313 | 720,304 | 9,335 | 10,843,798 | | | 2022 | — | — | — | — | — | — | | Brad Berryman, Senior Vice President and Chief Nuclear Officer | 2024 | 550,000 | — | — | 1,485,000 | 46,380 | 2,081,380 | | | 2023 | 541,660 | 665,106 | 7,729,289 | 1,251,994 | 40,498 | 10,228,547 | | | 2022 | 520,530 | 251,964 | — | 1,197,227 | 20,753 | 1,990,474 | | John Wander, General Counsel and Corporate Secretary | 2024 | 550,000 | 250,000 | — | 1,485,000 | 9,480 | 2,294,480 | | | 2023 | 285,578 | 250,000 | 7,729,289 | 720,304 | 3,881 | 8,989,052 | | | 2022 | — | — | — | — | — | — | | Cole Muller, (5) Executive Vice President, Strategic Ventures | 2024 | 477,115 | — | — | 2,403,750 | 29,384 | 2,910,249 |

  40. Summary Compensation Table

    __________________ (1)The amounts in this column for 2024 reflect amounts actually earned by each NEO, as described under “—Compensation Discussion and Analysis—Elements of Compensation—Base Salary.” (2)The amounts in this column for 2024 reflect the cash amount earned by (i) Mr. McFarland under his signing bonus, of which $1,000,000 was paid in May 2024 (and $1,000,000 remains to be paid in May 2025) and (ii) Mr. Wander, whose remaining $250,000 of his signing bonus was paid in June 2024. (3)The amounts in this column for 2024 reflect the cash amounts earned by our NEOs in 2024 under the STI Program (which were paid in 2025) plus, for Mr. Muller, a payment of $1,053,750 under the Cumulus LTIP. For additional information about our STI Program, see “—Compensation Discussion and Analysis—Elements of Compensation—Short-Term Incentives.” For additional information about the Cumulus LTIP, see “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives—Cumulus Long-Term Incentive Plan and Awards.” (4)The amounts in this column for 2024 reflect the following perquisites received by our NEOs in the amounts set forth in the following table: (a) payments for the cost of premiums for a term life insurance policy paid by us, (b) an employer matching contribution to the 401(k) plan, (c) an employer discretionary contribution to the 401(k) Plan, (d) a contribution to the NEO’s health savings account, and (e) payments for financial counseling services.

  41. Summary Compensation Table

    | Name | Term Life Insurance Policy | 401(k) Plan Matching Contribution | 401(k) Plan Discretionary Contribution | Health Saving Account | Financial Counsel Services | | Mark McFarland | $4,902 | $20,700 | $6,900 | $— | $— | | Terry Nutt | 900 | 20,700 | 6,900 | 1,200 | — | | Brad Berryman | 2,580 | 20,700 | 6,900 | 1,200 | 15,000 | | John Wander | 2,580 | — | 6,900 | — | — | | Cole Muller | 498 | 13,800 | 6,900 | 1,200 | 6,986 |

  42. Summary Compensation Table

    (5)Mr. Muller was not an NEO prior to 2024.

  43. Grants of Plan-Based Awards for Fiscal 2024

    Grants of Plan-Based Awards for Fiscal 2024 The following table sets forth information with respect to non-equity incentive plan awards awarded during fiscal 2024 to each of the NEOs.

  44. Grants of Plan-Based Awards for Fiscal 2024

    | Name | | | Estimated Future Payouts Under Non-Equity Incentive Plan Awards | | | | | Grant Type | Grant Date | Threshold | Target | Maximum | | Mark McFarland | STI(1) | — | | $1,518,750 | | | Terry Nutt | STI(1) | — | | 550,000 | | | Brad Berryman | STI(1) | — | | 550,000 | | | John Wander | STI(1) | — | | 550,000 | | | Cole Muller | STI(1) | — | | 500,000 | | | | Cumulus LTIP(2) | 3/7/2024(3) | | 1,053,750 | 1,312,500 |

  45. Grants of Plan-Based Awards for Fiscal 2024

    __________________ (1)Amounts represent awards payable under our STI Program granted pursuant to each applicable NEO’s employment agreement. Amounts pay out based on a percentage of the applicable target value (which is a percentage of base salary) based on achievement of pre-determined performance criteria. For additional information, see section entitled “—Compensation Discussion and Analysis—Elements of Compensation—Short-Term Incentives.” (2)Amounts represent grants under the Cumulus LTIP. Because these awards are based on the results of actual transaction, they do not have a threshold, target or maximum value. The amount reported in the “Threshold” column reflect the amount actually paid under the Cumulus LTIP. The amount reported in the “Maximum” column represents the amount payable upon fulfillment of all four milestones of the award. For additional information about the Cumulus LTIP, see “—Compensation Discussion and Analysis—Elements of Compensation—Long-Term Incentives—Cumulus Long-Term Incentive Plan and Awards.” (3)Mr. Muller received his original award agreement under the Cumulus LTIP in September 2023. This award was subsequently replaced with his current award in March 2024.

  46. Outstanding Equity Awards at 2024 Fiscal Year End

    Outstanding Equity Awards at 2024 Fiscal Year End The following table sets forth certain information with respect to outstanding equity awards of our NEOs for the year ended December 31, 2024. The market value of the shares in the following table reflects the fair market value of such shares as of December 31, 2024.

  47. Outstanding Equity Awards at 2024 Fiscal Year End

    | | Stock Awards | | | | | Name | Number of Shares or Units of Stock That Have Not Vested (1) | Market Value of Shares or Units of Stock That Have Not Vested (2) | Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (3) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested (2) | | Mark McFarland | 148,762 | $29,971,080 | 747,920 | $150,683,442 | | Terry Nutt | 41,559 | 8,372,892 | 208,944 | 42,095,948 | | Brad Berryman | 41,559 | 8,372,892 | 208,944 | 42,095,948 | | John Wander | 41,559 | 8,372,892 | 208,944 | 42,095,948 | | Cole Muller | 26,352 | 5,309,137 | 132,489 | 26,692,559 |

  48. Outstanding Equity Awards at 2024 Fiscal Year End

    _________________ (1)Represents RSUs granted on June 16, 2023 (or for Mr. Nutt, July 10, 2023) that remain outstanding and are eligible to vest in equal annual installments second and third anniversary of the vesting commencement date, subject to continued employment (except in certain scenarios as described in the section entitled “—Potential Payments upon Termination or Change in Control”). The vesting commencement date is (i) May 17, 2023 for the RSUs held by Messrs. McFarland, Berryman and Muller; (ii) July 10, 2023 for RSUs held by Mr. Nutt; and (iii) June 19, 2023 for RSUs held by Mr. Wander. (2)Market values reported in the table are calculated based on the fair market value of the Company’s common stock as of December 31, 2024, $201.47. (3)Represents PSUs granted on June 16, 2023 (or for Mr. Nutt, July 10, 2023) that are eligible to vest upon achievement of specified per‑share values of common stock, plus any dividends paid during the term of the award, as of the third anniversary of the vesting commencement date, subject to continued employment (except in certain scenarios as described in the section entitled “—Potential Payments Upon Termination or Change in Control”). The vesting commencement date for all the PSUs is May 17, 2023. As of the end of 2024, the performance for the PSUs was above 200% of target, based on our stock price of $201.47 as of December 31, 2024. Because performance for the PSUs exceeded the maximum level as of the end of 2024 and additional PSUs can be earned for performance above the maximum level, the number of shares in this column represents the actual level of performance achieved as of December 31, 2024 (including the value of the 1% kicker determined as of such date).

  49. Options Exercised and Stock Vested in Fiscal 2024

    Options Exercised and Stock Vested in Fiscal 2024 The following table sets forth certain information with respect to the vesting of stock awards and/or the exercise of stock options during the fiscal year ended 2024 with respect to our NEOs.

  50. Options Exercised and Stock Vested in Fiscal 2024

    | | Stock Awards | | | Name | Number of Shares Acquired on Vesting (1) | Value Realized on Vesting (2) | | Mark McFarland | 74,380 | $8,030,065 | | Terry Nutt | 20,779 | 2,649,322 | | Brad Berryman | 20,779 | 2,243,301 | | John Wander | 20,779 | 2,424,909 | | Cole Muller | 13,176 | 1,422,481 |

  51. Options Exercised and Stock Vested in Fiscal 2024

    _________________ (1)Represents the gross number of shares of Common Stock acquired by the applicable NEO during fiscal year 2024 upon the vesting of such NEO’s applicable RSU award, without reduction for any shares withheld to satisfy applicable tax withholdings. (2)The value realized upon vesting is calculated based on the closing share price on the date of vesting. For 2024, the RSUs that vested were settled in cash. Amounts differ for NEOs with the same number of shares due to differences in vesting dates.

  52. Pension Benefits; Nonqualified Deferred Compensation

    Pension Benefits; Nonqualified Deferred Compensation Our NEOs did not participate in or have account balances in pension plans sponsored by us. Our NEOs did not participate in or have account balances in nonqualified defined contribution plans or other nonqualified deferred compensation plans maintained by us. The Board or the Compensation Committee may elect to provide our executive officers and other employees with nonqualified defined contribution or other nonqualified deferred compensation benefits in the future if it determines that doing so is in our best interest.

  53. Potential Payments Upon Termination or Change in Control

    Potential Payments Upon Termination or Change in Control The following table provides information regarding potential payments to certain of our NEOs as of December 31, 2024 in connection with certain termination or change in control events.

  54. Potential Payments Upon Termination or Change in Control

    | Benefits and Payments upon Termination | Cash Severance | Aggregate Value of Accelerated Equity Awards (1) | Total | | Mark McFarland | | | | | Termination w/o Cause or w/ Good Reason | $6,287,500(2) | $29,970,812(5) | $36,258,312 | | Termination due to death or Disability | 4,100,625(3) | 9,360,747(6) | 13,461,372 | | Change in Control (w/ or w/o termination) | — | 180,654,254(7) | 180,654,254 | | Terry Nutt | | | | | Termination w/o Cause or w/ Good Reason | 1,100,000(4) | 1,995,714(6) | 3,095,714 | | Termination due to death or Disability | 1,485,000(3) | 1,995,714(6) | 3,480,714 | | Change in Control (w/ or w/o termination) | — | 50,468,772(7) | 50,468,772 | | Brad Berryman | | | | | Termination w/o Cause or w/ Good Reason | 1,100,000(4) | 2,615,074(6) | 3,715,074 | | Termination due to death or Disability | 1,485,000(3) | 2,615,074(6) | 4,100,074 | | Change in Control (w/ or w/o termination) | — | 50,468,772(7) | 50,468,772 | | John Wander | | | | | Termination w/o Cause or w/ Good Reason | 1,100,000(4) | 2,615,074(6) | 3,715,074 | | Termination due to death or Disability | 1,485,000(3) | 2,615,074(6) | 4,100,074 | | Change in Control (w/ or w/o termination) | — | 50,468,772(7) | 50,468,772 | | Cole Muller | | | | | Termination w/o Cause or w/ Good Reason | 1,000,000(4) | 1,658,196(6) | 2,658,196 | | Termination due to death or Disability | 1,350,000(3) | 1,658,196(6) | 3,008,196 | | Change in Control (w/ or w/o termination) | — | 32,001,696(7) | 32,001,696 |

  55. Potential Payments Upon Termination or Change in Control

    (1)Amounts in this column are calculated based on the market value of the Company’s common stock as of December 31, 2024. (2)Amount represents (i) cash payment equal to two-times the sum of Mr. McFarland’s base salary and target annual bonus for 2024, payable over 24 months following the separation date and (ii) full accelerated vesting of the remaining $1,000,000 payment of Mr. McFarland’s signing bonus, payable within 60 days following termination of employment. (3)Upon termination of employment due to death or “Disability,” each NEO would be entitled to earn the unpaid portion of the annual bonus for 2024 based on actual performance results for 2024, pro-rated based on days employed during such period. Because these amounts are based on a hypothetical termination on December 31, 2024, these amounts reflect each NEO’s full bonus for 2024, without proration. (4)For each NEO, amounts represent a cash payment equal to one-times the sum of their base salary and target annual bonus for the performance year in which the termination date occurs, payable over 12 months following the separation date. (5)Amount represents the value of accelerated vesting of Mr. McFarland’s 148,762 unvested RSUs. (6)For each NEO, represents the value of accelerated vesting of a pro rata portion of the next scheduled annual vesting tranche of each NEO’s outstanding RSUs, calculated based on the number of days from the vesting commencement date to the date of the NEO’s termination divided by 365 (and assuming a termination occurred on December 31, 2024). (7)For each NEO, represents the value of (i) accelerated vesting of all outstanding RSUs and (ii) accelerated vesting of the number of PSUs that would vest based on achievement of performance criteria as of such Change in Control (which, assuming a Change in Control that occurred on December 31, 2024, and using our stock price of $201.47 as of such date, would result in vesting at 223% of target (inclusive of the kicker)).

  56. Pay Versus Performance

    Pay Versus Performance The following table sets forth certain information with respect to the Company’s financial performance and the compensation paid to our NEOs for the fiscal year ended on December 31, 2024.

  57. Pay Versus Performance

    | Year | Summary Compensation Table Total for PEO (1) | Compensation Actually Paid to PEO (2) | Average Summary Compensation Table Total for Non-PEO NEOs (1) | Average Compensation Actually Paid to Non-PEO NEOs (2) | Value of Initial Fixed $100 Investment Based on: | | Net Income ($mm) (4) | Adjusted EBITDA ($mm) (5) | | | | | | | Total Shareholder Return (3) | Peer Group Total Shareholder Return (3) | | | | 2024 | $6,258,127 | $149,209,508(6) | $2,337,702 | $39,010,239(6) | $158.02 | $109.11 | $1,013 | $770 |

  58. Pay Versus Performance

    ____________________ (1)This table represents pay versus performance information for Mark McFarland (“PEO”) and Terry Nutt, Brad Berryman, John Wander, and Cole Muller (the “Non-PEO NEOs”) for the fiscal year ending on December 31, 2024. (2)In calculating the ‘compensation actually paid’ amounts reflected in these columns, the fair value or change in fair value, as applicable, of the equity award adjustments included in such calculations was computed in accordance with FASB ASC Topic 718. The valuation assumptions used to calculate such fair values for the RSUs did not materially differ from those disclosed at the time of grant, and for the PSUs were as follows: for December 31, 2023, a volatility of 25% and risk free rate of 4.15%, and for December 31, 2024, a volatility of 40% and risk free rate of 4.19%. (3)The Company TSR and the Company’s Peer Group TSR reflected in these columns for each applicable fiscal year is calculated based on a fixed investment of $100 on July 10, 2024, the date the Company’s common stock began trading on Nasdaq, through December 31, 2024, reflecting the applicable measurement period as is used in Item 201(e) of Regulation S-K. The peer group used to determine the Company’s Peer Group TSR is the S&P Utility Index, as disclosed in our 2024 Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S‑K. (4)Represents the amount of net income reflected in the Company’s audited GAAP financial statements for the fiscal year 2024. (5)We have selected Adjusted EBITDA as our most important financial measure (that is not otherwise required to be disclosed in the table) used to link ‘compensation actually paid’ to our NEOs to company performance for fiscal year 2024. See Appendix A to this Proxy Statement for the definitions and reconciliations of non-GAAP financial measures. (6)For fiscal year 2024, the “compensation actually paid” to the PEO and non-PEO NEOs reflects each of the following adjustments made to the total compensation amounts reported in the Summary Compensation Table for fiscal year 2024, computed in accordance with Item 402(v) of Regulation S-K:

  59. Pay Versus Performance

    | | PEO | All NEOs (other than PEO) | | Total Compensation Reported in Summary Compensation Table | $6,258,127 | $2,337,702 | | Adjustments: | | | | Plus, Change in Fair Value of Awards Granted in Prior Years that are Outstanding and Unvested (from Prior Year-End to Year-End) | 141,421,378 | 35,894,293 | | Plus, Vesting Date Fair Value of Awards Granted in the Covered Fiscal Year that Vested in that Year | 1,530,003 | 778,244 | | Total Adjustments | 142,951,381 | 36,672,537 | | Compensation Actually Paid for the Covered Fiscal Year | $149,209,508 | $39,010,239 |

  60. Pay Versus Performance Comparative Disclosure

    Pay Versus Performance Comparative Disclosure The amounts set forth in the pay-versus-performance table above illustrate, for the fiscal year 2024, the “compensation actually paid” to our CEO and other NEOs and our total shareholder return, net income, and Adjusted EBITDA. Because we became a reporting company in the fiscal year 2024, we are not required to provide disclosure of any previous years. In future disclosure, as additional years are added to the table, we will be able to demonstrate how the compensation of our CEO and other NEOs correlates to these measures.

  61. Pay Versus Performance Tabular List

    Pay Versus Performance Tabular List The following table lists our most important performance measures used by us to link “compensation actually paid” to our NEOs to company performance for fiscal year 2024. The performance measures included in this table are not ranked by relative importance.

  62. Pay Versus Performance Tabular List

    | Most Important Performance Measures | | Adjusted EBITDA | | Adjusted Equity Value | | Safety | | Operating Performance | | Adjusted Free Cash Flow |

  63. Director Compensation

    Director Compensation The table below provides information on the compensation of our non-employee directors for service on the board of directors of the Company during the year ended December 31, 2024. As required by applicable SEC rules, the disclosure in this section covers all persons who at any time served as a director during 2024, other than Mr. McFarland, who currently serves as our Chief Executive Officer, and who did not receive additional compensation for serving as a director. For summary information on the provisions of the applicable plans and programs, refer to the discussion immediately following this table.

  64. Director Compensation

    | Name | Fees Earned or Paid in Cash (1) | Stock Awards (2) | Total | | Stephen Schaefer | $250,000 | $— | $250,000 | | Gizman Abbas (3) | 185,000 | — | 185,000 | | Anthony Horton (4) | 185,000 | — | 185,000 | | Karen Hyde (5) | 180,000 | — | 180,000 | | Joseph Nigro (6) | 172,500 | — | 172,500 | | Christine Benson Schwartzstein (7) | 167,500 | — | 167,500 |

  65. Director Compensation

    __________________ (1)Our non-employee directors serving on the Board receive a base annual cash retainer of $100,000, paid quarterly in arrears, and each received two additional payments of $25,000 each, as described further below. Mr. Schaefer served as the Non-Executive Chair of the Board and, in such capacity, received an additional cash retainer of $100,000. (2)Each non-employee director held 8,265 unvested RSUs as of the end of fiscal year 2024. Mr. Schaeffer held 18,891 PSUs (based on the target level of performance) as of the end of fiscal year 2024. (3)Mr. Abbas served as (i) the Chair of the Nominating and Governance Committee and received an additional cash retainer of $15,000 in such capacity, (ii) a member of the Audit Committee and received an additional cash retainer of $10,000 in such capacity, and (iii) a member of the Compensation Committee and received an additional cash retainer of $10,000 in such capacity. (4)Mr. Horton served as (i) the Chair of the Compensation Committee and received an additional cash retainer of $15,000 in such capacity, (ii) a member of the Audit Committee and received an additional cash retainer of $10,000 in such capacity, and (iii) a member of the Risk Committee and received an additional cash retainer of $10,000 in such capacity. (5)Ms. Hyde served as (i) the Chair of the Audit Committee and received an additional cash retainer of $20,000 in such capacity and (ii) a member of the Compensation Committee and received an additional cash retainer of $10,000 in such capacity. (6)Mr. Nigro served as (i) the Chair of the Risk Committee and received an additional cash retainer of $15,000 in such capacity and (ii) a member of the Nominating and Governance Committee and received an additional cash retainer of $7,500 in such capacity. (7)Ms. Benson served as (i) a member of the Risk Committee and received an additional cash retainer of $10,000 in such capacity and (ii) a member of the Nominating and Governance Committee and received an additional cash retainer of $7,500 in such capacity.

  66. 2024 Director Compensation

    2024 Director Compensation Under our director compensation program for non-employee directors of the Company, annual non-employee director fees for fiscal 2024 were set at $100,000 payable in cash quarterly in arrears. The Non-Executive Chair of the Board also receives an annual retainer in the amount of $100,000 (in addition to the standard annual non-employee director fees), payable in cash quarterly in arrears (or in restricted stock units with a one-year cliff). In addition, the Board approved two special payments of an additional $25,000 to each non-employee director as compensation for a number of additional off-cycle board and committee meetings in 2024, which were paid in cash in August and December 2024 respectively. In addition to annual fees, non-employee directors serving on standing committees of the Board were paid as follows: an additional $10,000 Audit Committee members (or $20,000 for the Chair of the Audit Committee); an additional $10,000 for Compensation Committee members (or $15,000 for the Chair of the Compensation Committee); an additional $10,000 for Risk Oversight Committee members (or $15,000 for the Chair of the Risk Oversight Committee); and an additional $7,500 for Nominating and Governance Committee members (or $15,000 for the Chair of the Nominating and Governance Committee). In addition to the fees above, each director serving on the Board as of May 17, 2023 received a grant of RSUs under the 2023 Equity Plan, which vests in equal annual installments over three years. In 2026, the Company intends to transition to annual equity grants for directors with one-year cliff vesting in an amount to be determined. Upon a termination of a non-employee director’s service on the Board for any reason, all unvested RSUs will be forfeited. Upon the occurrence of a “Change in Control” (as defined in the 2023 Equity Plan), all unvested RSUs held by non‑employee directors will immediately vest. The non-employee directors may not sell or transfer any of the shares of common stock received upon vesting of RSUs until the earlier of a “Change in Control” or the third anniversary of the vesting commencement date.

  67. 2025 Director Compensation

    2025 Director Compensation Upon the recommendation of the Compensation Committee, in February 2025 the Board approved a grant of RSUs to each non-employee director, which will vest in full on the second anniversary of the grant date, in the following amounts in the amount of 1,789 RSUs to Mr. Schaefer and 717 to each other non-employee director. These RSUs were otherwise consistent with the terms applicable to the RSUs granted to non-employee directors in 2023. The Board also approved an increase in the annual director retainer for each non-employee director to $125,000 for fiscal 2025 and an increase in the additional annual retainer for the Non-Executive Chair to $125,000 (in addition to the standard annual non-employee director fees) for fiscal 2025. The 2025 director RSUs and increased retainer fees will be reflected in the director compensation disclosure of our 2026 proxy statement.

  68. Adjusted Free Cash Flow

    Adjusted Free Cash Flow Adjusted Free Cash Flow is utilized by our chief operating decision makers to evaluate cash flow activities. Adjusted Free Cash Flow is computed as Adjusted EBITDA reduced by capital expenditures (including nuclear fuel but excluding development, growth, and (or) conversion capital expenditures), cash payments for interest and finance charges, cash payments for taxes (excluding income taxes paid from the NDT, taxes paid or deductions taken as a result of strategic asset sales, and benefits of the Nuclear PTC utilized to reduce taxes paid), and pension contributions. We believe Adjusted Free Cash Flow is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to determine a company’s ability to meet future obligations and to compare business performance across companies and across periods. Adjusted Free Cash Flow is widely used by investors to measure a company’s levered cash flow without regard to items such as ARO settlements; nonrecurring development, growth and conversion expenditures; and cash proceeds or payments for the sale or purchase of assets, which can vary substantially from company to company and from period to period depending upon accounting methods, book value of assets, capital structure, and the method by which assets were acquired.