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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.   )
Filed by the Registrant
Filed by a Party other than the Registrant
Check the appropriate box:

Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material under §240.14a-12
CLEARWAY ENERGY, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):

No fee required.

Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1)
Title of each class of securities to which transaction applies:
(2)
Aggregate number of securities to which transaction applies:
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
(4)
Proposed maximum aggregate value of transaction:
(5)
Total fee paid:

Fee paid previously with preliminary materials.

Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
(1)
Amount Previously Paid:
(2)
Form, Schedule or Registration Statement No.:
(3)
Filing Party:
(4)
Date Filed:

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DEFINITIVE PROXY STATEMENT
[MISSING IMAGE: lg_clearwayenergy-pn.jpg]
March 17, 2021
Dear Stockholder:
We are pleased to invite you to attend Clearway Energy, Inc.’s Annual Meeting of Stockholders, which will be held at 9 a.m., Eastern Time, on Thursday, April 29, 2021. Due to the ongoing public health impact of the COVID-19 pandemic, the Annual Meeting of Stockholders will be held in a virtual meeting format only, via live webcast on the Internet. Details regarding admission to the meeting and the business to be conducted are more fully described in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
Your vote is important. Whether or not you plan to attend the Annual Meeting, we hope you will vote as soon as possible. Information about voting methods is set forth in the accompanying Notice of Annual Meeting of Stockholders and Proxy Statement.
On behalf of Clearway Energy, Inc., I thank you for your ongoing interest and investment in Clearway Energy, Inc. We are committed to acting in your best interests. If you have any questions with respect to voting, please call our proxy solicitor, MacKenzie Partners, Inc. at (800) 322-2885 (toll free).
Sincerely,
[MISSING IMAGE: sg_jonathanbram-bw.jpg]
Jonathan Bram
Chairman of the Board
THIS PROXY STATEMENT AND PROXY CARD ARE
BEING DISTRIBUTED ON OR ABOUT MARCH 17, 2021.
 

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Clearway Energy, Inc.
300 Carnegie Center, Suite 300, Princeton, New Jersey 08540
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
When:   Thursday, April 29, 2021, 9:00 a.m., Eastern Time
Where:   Virtual via live webcast on the Internet at www.virtualshareholdermeeting.com/CWEN2021. No physical meeting will be held.
We are pleased to invite you to join our Board of Directors and senior leadership at the Clearway Energy, Inc. 2021 Annual Meeting of Stockholders.
ITEMS OF BUSINESS:
1.
To elect nine directors.
2.
To approve, on a non-binding advisory basis, Clearway Energy, Inc.’s executive compensation.
3.
To approve the amendment and restatement of the Amended and Restated 2013 Equity Incentive Plan to increase the number of shares of common stock available for issuance under the plan and to make certain additional changes.
4.
To ratify the appointment of Ernst & Young LLP as Clearway Energy, Inc.’s independent registered public accounting firm for the 2021 fiscal year.
5.
To transact such other business as may properly come before the Annual Meeting and any adjournment or postponement.
RECORD DATE:
You are entitled to vote if you were a stockholder of record of our Class A, Class B, Class C or Class D common stock at the close of business on March 4, 2021.
By Order of the Board of Directors
[MISSING IMAGE: sg_malcarney-bw.jpg]
KEVIN P. MALCARNEY
Senior Vice President, General Counsel and
Corporate Secretary
Voting Information
HOW TO VOTE:
Even if you plan to attend the Annual Meeting virtually, please vote right away using one of the following advance voting methods. Make sure to have your proxy card or voting instruction form in hand and follow the instructions in the card or form.
Via the Internet:
You may vote at www.proxyvote.com, from anywhere in the world, 24 hours a day, 7 days a week, up until 11:59 p.m. Eastern Time on April 28, 2021.
By phone:
If you live in the United States, you may vote 24 hours a day, 7 days a week, up until 11:59 p.m. Eastern Time on April 28, 2021, by calling 1-800-690-6903 from a touch-tone phone.
By mail:
If you received a paper copy of the materials, you may mark, sign, date and mail your proxy card or voting instruction card in the enclosed, postage-paid address envelope, as soon as possible as it must be received by the Company prior to April 29, 2021, the Annual Meeting date.
At the virtual meeting:
Stockholders of record at the close of business on March 4, 2021, or their legal proxy holders, will be able to access the Annual Meeting webcast, ask questions and vote online at www.virtualshareholdermeeting.com/CWEN2021 by entering their 16-digit control number provided on their proxy card. This website also will contain instructions to participate in the virtual Annual Meeting. Please see the Questions and Answers section beginning on page 80 for important information about participating in the virtual Annual Meeting. Additional questions may be directed to our proxy solicitor, MacKenzie Partners, Inc. at (800) 322-2885 or
proxy@mackenziepartners.com.
 

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2021 ANNUAL MEETING OF STOCKHOLDERS
PROXY STATEMENT
TABLE OF CONTENTS
Page
2
5
16
16
24
25
35
38
44
55
76
76
77
78
80
85
APPENDIX A-1
 

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PROXY STATEMENT HIGHLIGHTS
This summary highlights information contained elsewhere in this proxy statement (the “Proxy Statement”). This summary does not contain all of the information that you should consider, and you should read the entire Proxy Statement before voting. For information regarding Clearway Energy, Inc.’s 2020 performance, please review Clearway Energy, Inc.’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”).
ROADMAP OF VOTING MATTERS
Stockholders are being asked to vote on the following matters at the 2021 Annual Meeting of Stockholders (the “Annual Meeting”):
Board
Recommendation
Proposal 1. Election of Directors (page 16)
The Board of Directors (the “Board”) and the Corporate Governance, Conflicts and Nominating Committee believe that the nine director nominees possess the necessary qualifications, attributes, skills and experience to provide advice and counsel to the Company’s management and effectively oversee the business and the long-term interests of our stockholders.
FOR
each director nominee
Proposal 2. Approval, on a non-binding advisory basis, of Clearway Energy, Inc.’s executive compensation (the “Say on Pay Proposal”) (page 24)
The Company seeks a non-binding advisory vote to approve the compensation of its named executive officers (the “NEOs”) as described in the Compensation Discussion and Analysis (the “CD&A”) beginning on page 55 and the compensation tables and respective narrative discussion. The Board values stockholders’ opinions, and the Compensation Committee will take into account the outcome of the Say on Pay Proposal when considering future executive compensation decisions.
FOR
Proposal 3. Approval of the amendment and restatement of the Equity Incentive Plan to increase the number of shares of common stock available for issuance under the plan and to make certain additional changes (the “Equity Incentive Plan Amendment Proposal”) (page 25)
The Company seeks the approval of an amendment and restatement of the Amended and Restated 2013 Equity Incentive Plan (“Equity Incentive Plan”) (i) to increase the number of shares of common stock available for issuance under the plan by 2,500,000 shares in order to have shares available to award as compensation consistent with its overall compensation program and (ii) to make certain additional changes to the plan.
FOR
Proposal 4. Ratification of the appointment of Ernst & Young LLP as Clearway Energy, Inc.’s independent registered public accounting firm for the 2021 fiscal year (the “Ratification of Ernst & Young LLP’s Appointment Proposal”) (page 35)
The Audit Committee and the Board believe that the retention of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2021 fiscal year is in the best interests of the Company and its stockholders. As a matter of good corporate governance, stockholders are being asked to ratify the Audit Committee’s selection of Ernst & Young LLP.
FOR
 
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CORPORATE GOVERNANCE HIGHLIGHTS
We are committed to maintaining high standards of corporate governance, which promote the long-term interests of our stockholders, strengthen Board and management accountability and help build public trust in the Company. The “Governance of the Company” section beginning on page 5 describes our corporate governance framework, which includes the following highlights:

Separate Chairman and Chief Executive Officer

9 director nominees

4 independent director nominees

Risk oversight by full Board and committees

Annual self-evaluation of full Board and each committee

Lead Independent Director

Independent audit and governance committees

Regular executive sessions of independent directors

Anti-hedging and anti-pledging policies

Director orientation and continuing education program

Engagement on and oversight of environmental, social and governance (“ESG”) matters

Board Diversity Policy
DIRECTOR NOMINEES
Name, Primary Occupation
Age
Director
Since
Independent
Other Public
Company
Boards
Committee
Memberships(1)
A
C
GCN
Jonathan Bram
55 2018 NO 0
Chairman of the Board of the Company, Founding Partner of Global Infrastructure Partners
Nathaniel Anschuetz
33 2018 NO 0
Principal at Global Infrastructure Partners
Brian R. Ford(2)
72 2013 YES 1
Former Chief Executive Officer of Washington Philadelphia Partners, LP
Bruce MacLennan
54 2018 NO 0
Partner of Global Infrastructure Partners
Ferrell P. McClean
74 2013 YES 0
Former Managing Director at J.P. Morgan Chase & Co.
Daniel B. More
64 2019 YES 1
Senior Advisor at Guggenheim Securities
E. Stanley O’Neal
69 2018 YES 2
Former Chairman of the Board and
Chief Executive Officer of Merrill Lynch & Co.
Christopher S. Sotos
49 2013 NO 0
President and Chief Executive Officer of the Company
Scott Stanley
64 2018 NO 0
Operating Partner of Global Infrastructure Partners
(1)
★ Chair ✓ Member
A = Audit Committee; C = Compensation Committee; GCN = Corporate Governance, Conflicts and Nominating Committee
 
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(2)
Lead Independent Director
QUESTIONS AND ANSWERS
Please see the Questions and Answers section beginning on page 80 for important information about the proxy materials, voting and the Annual Meeting. Additional questions may be directed to our proxy solicitor, MacKenzie Partners, Inc. at (800) 322-2885 or proxy@mackenziepartners.com.
LEARN MORE ABOUT OUR COMPANY
You can learn more about the Company and view our governance materials and much more by visiting the “Corporate Governance” section of our website, www.clearwayenergy.com.
Please also visit our Annual Meeting website at www.proxyvote.com to easily access the Company’s proxy materials and vote through the Internet.
 
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PROXY STATEMENT
We are providing these proxy materials to you in connection with the solicitation of proxies by the Board of Clearway Energy, Inc. for the Annual Meeting and for any adjournment or postponement of the Annual Meeting. The Annual Meeting will be held Thursday, April 29, 2021, at 9 a.m., Eastern Time. Due to the ongoing public health impact of the COVID-19 pandemic, the Annual Meeting will be held in a virtual meeting format only, via live webcast on the Internet. In this Proxy Statement, “we,” “us,” “our,” “Clearway Energy,” “Clearway,” “CWEN” and the “Company” refer to Clearway Energy, Inc.
You are receiving this Proxy Statement because you own shares of our Class A, Class B, Class C or Class D common stock, par value $0.01 per share, that entitle you to vote at the Annual Meeting. By use of a proxy, you can vote whether or not you attend the Annual Meeting. The Proxy Statement describes the matters on which we would like you to vote and provides information on those matters.
Important Notice Regarding the Availability of Proxy Materials
for the Annual Meeting of Stockholders to be held on Thursday, April 29, 2021
Each of the Notice of Annual Meeting, this Proxy Statement and our 2020 Form 10-K is available at www.proxyvote.com. If you would like to receive, without charge, a paper copy of our 2020 Form 10-K, including the financial statements and the financial statement schedules, please send your request to Investor Relations, 300 Carnegie Center, Suite 300, Princeton, New Jersey 08540.
GOVERNANCE OF THE COMPANY
CORPORATE GOVERNANCE GUIDELINES AND CHARTERS
The Board has adopted Corporate Governance Guidelines (the “Guidelines”) that, along with the Amended and Restated Certificate of Incorporation, the Fourth Amended and Restated Bylaws (the “Bylaws”) and the written charters of the committees of the Board (the “Committees”), provide the framework for the governance of the Company. The Board’s Corporate Governance, Conflicts and Nominating Committee is responsible for periodically reviewing the Guidelines and recommending any proposed changes to the Board for approval. The Guidelines are available on the Corporate Governance section of the Company’s website at www.clearwayenergy.com, along with the written charters of all of the Committees and the Company’s Code of Business Conduct and Ethics (the “Code of Conduct”). The Guidelines, the charters of all of the Committees and the Code of Conduct are also available in print to any stockholder upon request. Stockholders who desire to receive such items in print may request them from the Company’s Corporate Secretary by writing to Clearway Energy, Inc., 300 Carnegie Center, Suite 300, Princeton, New Jersey 08540.
CONTROLLED COMPANY
The funds comprising Global Infrastructure Partners III (“GIP”), through its portfolio company, Clearway Energy Group LLC (formerly Zephyr Renewables, LLC) (“CEG”), control more than 50% of the combined voting power of our common stock and has the voting power to elect the members of our Board. Thus, for purposes of the New York Stock Exchange (“NYSE”) rules, we are a “controlled company.” Controlled companies under those rules are companies of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. As a controlled company, we may take advantage of certain exemptions from corporate governance requirements provided in the NYSE rules. Specifically, we are not required to have (a) a majority of independent directors, (b) a nominating/corporate governance committee composed entirely of independent directors, (c) a compensation committee composed entirely of independent directors or (d) an annual performance evaluation of the nominating/corporate governance and compensation committees. Therefore, our stockholders may not have the same protections afforded to stockholders of companies that are subject to all of the applicable NYSE rules.
We currently avail ourselves of the majority of independent directors exemption and the entirely independent compensation committee exemption. However, we have elected to have a Corporate Governance, Conflicts and Nominating Committee consisting entirely of independent directors and we conduct an annual performance evaluation of the Committees. The controlled company exemption does not modify the
 
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independence requirements for the Audit Committee, and we comply with the requirements of the Sarbanes-Oxley Act of 2002 and the NYSE rules, which require that our Audit Committee be composed of at least three members, all of whom are independent.
BOARD STRUCTURE AND LEADERSHIP

Chairman of the Board: Jonathan Bram

Number of directors: 9

Number of regular meetings in 2020: 5

Number of special meetings in 2020: 3

Annual election of directors

Separate Chairman and Chief Executive Officer

Lead Independent Director: Brian R. Ford

Regular executive sessions of independent directors

Audit and Corporate Governance, Conflicts and Nominating Committees composed of all independent directors

Active engagement by all directors
Our Board is responsible for, among other things, overseeing the conduct of our business, reviewing and, where appropriate, approving our long-term strategic, financial and organizational goals and plans, and reviewing the performance of our Chief Executive Officer (the “CEO”) and any other members of senior management. Our Board conducts an annual self-evaluation, which includes a review of any areas in which the Board or management believes the Board can make a better contribution to our corporate governance, as well as a review of the committee structure and an assessment of the Board’s compliance with corporate governance principles. In fulfilling the Board responsibilities, directors have full access to our management and independent advisors.
During the 2020 fiscal year, all directors attended at least 75% of the meetings of the Board and Committees on which they served in 2020. Non-management directors meet in executive session regularly following Board meetings. Directors are encouraged to attend the annual meetings of stockholders. All of the directors who served as such at the time of the meeting attended the 2020 Annual Meeting of Stockholders.
As stated in the Guidelines, the Board understands that there is no single, generally accepted approach to providing Board leadership and that it is in the best interests of the Company for the Board to make a determination regarding whether or not to separate the roles of Chairman and CEO based upon the present circumstances. Currently, Jonathan Bram, a non-executive director and Founding Partner of GIP, our majority voting stockholder, serves as Chairman of the Board. Irrespective of the Company’s current practice, the Board believes that an effective board leadership structure is highly dependent on the experience, skills and personal interaction between persons in leadership roles. Although our Board believes that the separation of the Chairman and CEO roles is appropriate under current circumstances, it will continue to review this issue periodically to determine whether, based on the relevant facts and circumstances, the combination of these offices would serve the Company’s best interests and the best interests of its stockholders.
Our President and CEO, Mr. Sotos, and the Chairman, Mr. Bram, work together in complementary roles. Mr. Sotos focuses on the day-to-day operations of the Company and establishes the Company’s strategic plan. Mr. Bram leads the Board’s responsibilities for reviewing, approving and monitoring fundamental financial and business strategies and major corporate actions, assessing major risks facing the Company and management, and he presides over the Board and its Committees as they perform their oversight functions. The Board believes that these complementary roles provide the appropriate governance structure for the Company.
When the Chairman is a director affiliated with our majority owner, GIP, or a member of Company management, or when the independent directors determine that it is in the best interests of the Company, the independent directors will annually appoint from among themselves a Lead Independent Director. Mr. Ford is currently the Lead Independent Director. As Lead Independent Director, Mr. Ford is responsible for the activities of the independent directors and is authorized to call meetings of the independent directors, chairs executive sessions of the independent directors, and performs the other duties either specified in the Guidelines or as assigned from time to time by the Board.
 
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GOVERNANCE PRACTICES
The Board has taken a proactive approach in applying leading governance practices. As described in the Guidelines, the Board follows a series of governance practices that it believes foster effective Board oversight and accountability to you, our stockholders. These practices include:

succession planning for the CEO and other senior management;

annual performance evaluations of the Board and each of its standing Committees, as well as periodic peer review for individual directors;

director orientation and continuing education program, including Company site visits and information sessions with Company management at relevant sites; and

access to and engagement of outside advisors and consultants to assist the Board and the Committees in the performance of their duties, as appropriate.
RISK OVERSIGHT
The Board has responsibility for overall risk oversight of the Company.

The Audit Committee oversees financial risks.

The Compensation Committee oversees risks related to compensation policies and practices.

The Corporate Governance, Conflicts and Nominating Committee oversees risks related to governance practices, including ESG-related matters, conflicts of interest or changes of control and related person transactions.

Risk oversight includes understanding the material risks to the business and what steps management is taking or should be taking to manage those risks, as well as understanding and determining the appropriate risk appetite for the Company.

To define the Company’s risk appetite, the Board reviews and approves the annual business plan, budget and long-term plan, strategic initiatives, individual development projects, capital raising, acquisitions and divestitures, and capital allocation plan.
The Board does not have a separate risk committee, but instead believes that the entire Board is responsible for overseeing the Company’s risk management with the assistance of management and the Committees. The Board performs its risk oversight function in several ways. The Board monitors, reviews and reacts to strategic and corporate risks through reports by management and Committees. The Chair of each of the Committees regularly report to the Board on all matters reviewed by their Committees, thereby providing the full Board with the opportunity to identify and discuss any risk-related issues or request additional information from management or the Committees that may assist the Board in its risk oversight role. To this end, risk-related issues presented to each Committee are routinely presented to the full Board to ensure proper oversight.
With the full Board providing the top level of risk oversight, the Committees have a more specific risk oversight role for matters that fall under their purview. The Audit Committee considers the Company’s policies with respect to risk assessment and risk management. The Audit Committee also oversees financial risks, which includes reviewing the effectiveness of our internal controls, conducting a detailed review of the financial portions of the Company’s SEC reports, approving the independent auditor and the annual audit plan, and receiving and considering periodic reports from the Company’s independent auditor, the Company’s internal auditor and the Company’s corporate compliance officer. In addition, the Audit Committee oversees risks related to information technology systems and cybersecurity matters.
The Compensation Committee oversees risks related to our compensation policies and practices with input from management, and reviews the Company’s compensation policies and practices to determine whether they subject the Company to unnecessary risk. As a result of the review, management and the Compensation Committee have concluded that the Company’s compensation policies and practices are not reasonably likely to have a material adverse effect on the Company.
 
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The Corporate Governance, Conflicts and Nominating Committee oversees risks related to our governance practices, including but not limited to, Board and Committee membership and Board effectiveness, as well as risks related to perceived conflicts of interest or changes of control and acquisitions of the CEG ROFO Assets (as defined and described in “Certain Relationships and Related Person Transactions”) from, and agreements that we have in place with, CEG, and its affiliates, and other related person transactions. The Corporate Governance, Conflicts and Nominating Committee is also responsible for reviewing and assessing risks from ESG-related matters.
DIRECTOR NOMINEE SELECTION PROCESS
The Corporate Governance, Conflicts and Nominating Committee is responsible for identifying individuals that the Committee believes are qualified to become Board members in accordance with criteria set forth in the Guidelines. These criteria include (1) relevant knowledge, diversity of background and experience in areas including business, finance, accounting, marketing, as well as “next-generational” experience, such as technology, cybersecurity and social communication; (2) personal qualities of leadership, character, judgment and whether the candidate possesses a reputation in the community at large of integrity, trust, respect, competence and adherence to the highest ethical standards; (3) roles and contributions valuable to the business community; and (4) whether the candidate is free of conflicts, including the candidate’s qualification as “independent” under the various standards applicable to the Board and its committees, and has the time required for preparation, participation and attendance at meetings. The Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all Board members.
The Corporate Governance, Conflicts and Nominating Committee’s process for identifying and evaluating director nominees may also include consultation with all directors, solicitation of proposed nominees from all directors, the engagement of one or more professional search firms (if deemed appropriate), interviews with prospective nominees by the Committee (and other directors, if deemed appropriate) and recommendations regarding qualified candidates to the full Board.
In December 2020, in addition to the emphasis in the Guidelines on diversity of backgrounds and perspectives on the Board, the Board adopted a formal diversity policy (the “Diversity Policy”). The Diversity Policy is driven by the Company’s view that the Board should include members with diverse backgrounds, skills and experience, including appropriate financial and other expertise relevant to the business of the Company. The Diversity Policy supports periodically adding new perspectives to the Board to help the Company adapt to changing business trends and affirms that this is a policy. The Corporate Governance, Conflicts and Nominating Committee seeks to achieve diversity within the Board and adheres to the Company’s philosophy of maintaining an environment free from discrimination on the basis of race, color, religion, sex, sexual orientation, gender identity, age, national origin, disability, veteran status or any protected category under applicable law. The composition of the current Board reflects diversity in business and professional experience and skills.
Stockholder-Recommended Director Candidates
The Corporate Governance, Conflicts and Nominating Committee considers nominations by stockholders who recommend candidates for election to the Board. A stockholder seeking to recommend a prospective candidate for the Committee’s consideration may do so by writing to the Corporate Secretary, at Clearway Energy, Inc., 300 Carnegie Center, Suite 300, Princeton, New Jersey 08540, and by following the requirements to submit nominees discussed under “Stockholder Proposals or Stockholder Nomination of Director to be brought at the 2022 Annual Meeting (without Inclusion in the Company’s Proxy Statement).”
Stockholder-Nominated Director Candidates
As discussed under “Requirements for Submission of Stockholder Proposals for the 2022 Annual Meeting of Stockholders,” stockholders intending to appear at the 2022 Annual Meeting in order to nominate a candidate for election by the stockholders at the meeting (in cases where the Board does not intend to nominate the candidate or where the Corporate Governance, Conflicts and Nominating Committee
 
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was not requested to consider his or her candidacy) must comply with the procedures in the Bylaws, a copy of which is available upon request to the Company’s Corporate Secretary.
BOARD COMMITTEES
The Board has the following three standing Committees:

Audit

Compensation

Corporate Governance, Conflicts and Nominating
The membership and the functions of each Committee are described below.
Audit Committee

Current Members: Brian R. Ford (Chair), Ferrell P. McClean, Daniel B. More, E. Stanley O’Neal

Number of meetings in 2020: 5

Audit Committee Financial Experts: Brian R. Ford, Ferrell P. McClean, Daniel B. More, E. Stanley O’Neal

Primary Responsibilities: appoints, retains, oversees, evaluates, and compensates the independent auditors; reviews the annual audited and quarterly consolidated financial statements; and reviews major issues regarding accounting principles and financial statement presentations.

Independence: all members
The Audit Committee represents and provides assistance to the Board with respect to matters involving the accounting, auditing, financial reporting, internal control and legal compliance functions of the Company and its subsidiaries, including assisting the Board in its oversight of the integrity of the Company’s financial statements, compliance with legal and regulatory requirements, the qualifications, independence, and performance of the Company’s independent auditors, the performance of the Company’s internal audit function, and effectiveness of the Company’s financial risk management.
Among other things, the Audit Committee:
(1)
appoints, retains, oversees, evaluates, compensates, and terminates the independent auditors;
(2)
reviews the annual audited and quarterly consolidated financial statements with management and independent auditors;
(3)
reviews significant accounting and reporting issues, including significant changes in Company’s application of accounting principles and recent professional or regulatory pronouncements;
(4)
reviews major issues regarding accounting principles and financial statement presentations;
(5)
reviews earnings press releases and earnings guidance provided to analysts and rating agencies;
(6)
reviews and pre-approves all audit and permitted non-audit services provided by the independent auditors;
(7)
resolves disagreements between management and independent auditors regarding financial reporting;
(8)
considers the adequacy and effectiveness of the Company’s internal control and reporting system;
(9)
reviews and approves the internal corporate audit staff functions and sets hiring policies for employees or former employees of the independent auditors;
(10)
reviews and concurs the appointment, replacement, and dismissal of the Chief Audit Executive;
(11)
ensures rotation of the lead or coordinating audit partner;
 
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(12)
discusses policies with respect to risk assessment and risk management, including the Company’s major financial risk exposures and the effectiveness of the Company’s system for monitoring compliance with laws and regulations, and reviews the Company’s tax policies and findings of regulatory agencies and independent auditors;
(13)
reports regularly to the Board regarding its activities and prepares and publishes required annual Committee reports;
(14)
reviews updates from management and Company legal counsel regarding compliance matters that may be material to financial performance or reporting obligations;
(15)
discusses with management and the internal audit executive compliance by the Company and its subsidiaries with material applicable laws and regulations and the Code of Conduct;
(16)
establishes confidential and anonymous procedures for the receipt, retention, and treatment of complaints and concerns regarding accounting, internal accounting controls, or auditing matters;
(17)
oversees the internal audit and corporate compliance functions;
(18)
prepares the report required to be included in the Company’s proxy statement; and
(19)
annually evaluates the performance of the Audit Committee and the adequacy of its charter.
The Board has determined that all of the current Audit Committee members are independent according to the rules and regulations of the SEC and the listing standards of the NYSE with respect to audit committee membership.
Compensation Committee

Current Members: Ferrell P. McClean (Chair), Jonathan Bram, Brian R. Ford, Daniel B. More, E. Stanley O’Neal

Number of meetings in 2020: 4

Primary Responsibilities: oversees the Company’s overall compensation structure, policies and programs; evaluates the performance of the CEO and other senior executives against goals and objectives relevant to their compensation; and reviews the compensation of directors for service on the Board and its Committees.

Independence: 4 members
The Compensation Committee provides leadership and guidance to the Board regarding the Company’s overall compensation strategy, structure, policies and programs.
Among other things, the Compensation Committee:
(1)
reviews and recommends to the Board for approval annual and long-term goals and objectives relevant to the compensation of the CEO, evaluates the performance of the CEO in light of those goals and objectives, and determines, approves and recommends to the Board for approval, the CEO’s compensation level based on such evaluation;
(2)
reports to the Board with respect to the Chief Financial Officer (the “CFO”), any executive or senior vice presidents and any other officer designated by the Board and compensated by the Company (other than the CEO) on (i) the review of annual and long-term goals and objectives relevant to their compensation, (ii) the evaluations of their performance in light of those goals and objectives, (iii) the determination and approval of compensation levels based on such evaluations, and (iv) the review and approval of any incentive awards and opportunities, employment arrangements, severance arrangements, change-in-control provisions affecting any elements of compensation and benefits and any special or supplemental compensation and benefits;
(3)
reviews and recommends to the Board the compensation, incentive compensation and equity-based plans that are subject to Board approval;
 
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(4)
recommends to the Board stock option and other stock incentive awards for the CEO and approves stock option and other stock incentive awards for officers other than the CEO (the CEO and other officers may not be present during voting or deliberations with respect to his or her compensation);
(5)
reviews and discusses with management the CD&A to be included in the Company’s proxy statement or annual report on Form 10-K, and based on such review and discussions, recommends to the Board that the CD&A be included in the Company’s proxy statement or annual report on Form 10-K;
(6)
reviews and oversees the Company’s overall compensation strategy, structure, policies, programs, risk profile and any stockholder advisory votes on the Company’s compensation practices and assesses whether the compensation structure establishes appropriate incentives for management and employees;
(7)
establishes, reviews and approves any changes to the Company’s policy on recoupment of incentive compensation in the event of a financial restatement or other events that could require the recoupment or forfeiture of incentive compensation;
(8)
recommends and monitors officers’ and directors’ compliance regarding any stock ownership guidelines;
(9)
reviews the compensation of directors for service on the Board and its Committees and recommends changes in compensation to the Board;
(10)
retains and terminates any adviser to assist the Compensation Committee in the performance of its duties, but only after taking into consideration all factors relevant to the adviser’s independence from management; and
(11)
annually evaluates the performance of the Compensation Committee and the adequacy of its charter.
The Compensation Committee may delegate to one or more subcommittees such power and authority as the Compensation Committee deems appropriate. No subcommittee can consist of fewer than two members, and the Compensation Committee may not delegate to a subcommittee any power or authority that is required by any law, regulation or listing standard to be exercised by the Compensation Committee as a whole.
The Compensation Committee has the authority to retain at the expense of the Company such outside counsel, experts, and other advisors as it determines appropriate to assist it in the full performance of its functions, including sole authority to retain and terminate any compensation consultant used to assist the Compensation Committee in the evaluation of directors, or, if applicable, CEO or senior executive compensation, and to approve the consultant’s fees and other retention terms. Deloitte Consulting LLP (“Deloitte”) served as the Compensation Committee’s independent compensation consultant for the first eight months of fiscal year 2020. Pay Governance became the Compensation Committee’s independent compensation consultant in August 2020, and Pay Governance has continued to serve in that capacity to the present date. The Compensation Committee’s independent compensation consultants, Deloitte and Pay Governance, worked with the Compensation Committee in connection with the director compensation, executive compensation programs, and the CEO evaluation process.
The Board has determined that Ms. McClean, Mr. Ford, Mr. More and Mr. O’Neal are independent under the listing standards of the NYSE and that they are “nonemployee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Corporate Governance, Conflicts and Nominating Committee

Current Members: Ferrell P. McClean (Chair), Brian R. Ford, Daniel B. More

Number of meetings in 2020: 16
 
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Primary Responsibilities: recommends director candidates to the Board; makes recommendations on Board and Committee structure and function and governance related matters; oversees the evaluation of the Board and Committees; reviews potential conflict transactions between the Company and any affiliated parties, including GIP and CEG, and any change of control of the Company; and reviews and makes recommendations to the Board regarding ESG matters.

Independence: all members
The Corporate Governance, Conflicts, and Nominating Committee provides leadership and guidance to the Board and to the Company regarding matters of corporate governance, transactions involving potential conflicts of interest or changes of control, the selection and evaluation of members of the Board, the Board and committees annual performance review and ESG matters.
Among other things, the Corporate Governance, Conflicts and Nominating Committee:
(1)
identifies and reviews the qualifications of potential nominees to the Board consistent with criteria approved by the Board, including the relative experience, strength and conviction of independent directors;
(2)
assesses the contributions and independence of incumbent directors in determining whether to recommend them for re-election;
(3)
develops, periodically evaluates, and oversees compliance with the Guidelines and recommends any changes to the Guidelines to the Board;
(4)
establishes and reviews procedures for the consideration of Board candidates recommended by the Company’s stockholders;
(5)
reviews and approves potential conflict transactions between the Company and any affiliated parties, including GIP and CEG, with respect to acquisitions of assets and other transactions, including, but not limited to, the evaluation of acquisition opportunities presented to the Company pursuant to the Right of First Offer Agreement by and between the Company and CEG, as described in “Certain Relationships and Related Person Transactions — Right of First Offer Agreements”;
(6)
reviews and approves strategic transactions involving the transfer of 50% or more of the voting power in the Company;
(7)
periodically reviews relationships between the Company and each director and reports the results of its review to the Board for purposes of determining whether directors satisfy independence requirements;
(8)
makes recommendations to the Board concerning the structure, composition, and functioning of the Board and its committees, and periodically reviews the succession planning for directors (particularly the independent directors), including a review of the Board’s “next-generational” skills and experience in areas such as technology, cybersecurity and social communication;
(9)
recommends to the Board candidates for appointment to Board committees;
(10)
reviews and assesses the channels through which the Board receives information, and the quality and timeliness of information received;
(11)
reviews and recommends to the Board retirement and other tenure policies for directors;
(12)
reviews and approves Company policies applicable to the Board, the directors and officers subject to Section 16 of the Exchange Act;
(13)
reviews and reports to the Board regarding potential conflicts of interests of directors;
(14)
recommends to the Board director candidates for the annual meeting of stockholders, and candidates to be elected by the Board as necessary to fill vacancies and newly created directorships;
 
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(15)
oversees the evaluation of the Board, its committees and management, and develops and recommends to the Board an annual self-evaluation process of the Board and its Committees;
(16)
monitors directorships in other public companies held by directors and senior officers of the Company;
(17)
oversees the orientation process for new director and programs for the continuing education of directors;
(18)
reviews developing trends and emerging ESG matters, as well as the Company’s strategies, activities polices and communications regarding ESG matters, and makes recommendations to the Board regarding potential actions by the Company; and
(19)
performs such other duties and responsibilities as are consistent with the purpose of the Committee and as the Board deems appropriate.
The Board and each of the Committees conduct annual self-evaluations to assess their effectiveness and review their charters. Individual directors are also evaluated by the Board. The Corporate Governance, Conflicts and Nominating Committee coordinates each of these annual evaluations.
The Board has determined that all of the Corporate Governance, Conflicts, and Nominating Committee members are independent under the listing standards of the NYSE.
CODE OF CONDUCT
Our Board has adopted a Code of Conduct that applies to all of our directors and employees, including our officers. Our Code of Conduct is available on our website. If we amend or grant a waiver of one or more of the provisions of our Code of Conduct, we intend to satisfy the requirements under Item 5.05 of Form 8-K regarding the disclosure of amendments to or waivers from provisions of our Code of Conduct that apply to our principal executive, financial and accounting officers by posting the required information on our website. Our website is not part of this Proxy Statement.
ANTI-HEDGING AND ANTI-PLEDGING POLICIES
The Company prohibits executive officers, directors and employees from directly or indirectly engaging in any kind of hedging transaction that could reduce or limit their economic risk with respect to their holdings, ownership or interest in the Company’s securities including prepaid variable forward contracts, equity swaps, collars, puts, calls and options. The Company also prohibits executive officers, directors and employees from directly or indirectly engaging in any transaction in which the Company’s securities are being pledged.
COMMUNICATION WITH DIRECTORS
Stockholders and other interested parties may communicate with the Board by writing to the Corporate Secretary, Clearway Energy, Inc., 300 Carnegie Center, Suite 300, Princeton, New Jersey 08540. Communications intended for a specific director or directors should be addressed to their attention to the Corporate Secretary at the address provided above. Communications received from stockholders are forwarded directly to Board members as part of the materials mailed in advance of the next scheduled Board meeting following receipt of the communications. The Board has authorized the Corporate Secretary, in his discretion, to forward communications on a more expedited basis if circumstances warrant or to exclude a communication if it is illegal, unduly hostile or threatening, or similarly inappropriate. Advertisements, solicitations for periodical or other subscriptions, and other similar communications generally will not be forwarded to the directors.
ESG and Sustainability
We are committed to engaging with our stakeholders on environmental, social and governance (ESG) matters in a proactive, holistic and integrated manner. We strive to provide recent, credible and comparable data to ESG agencies while engaging institutional investors and investor advocacy organizations around
 
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ESG issues. As described above, the Corporate Governance, Conflicts and Nominating Committee reviews developing trends and emerging ESG matters, as well as the Company’s strategies, activities, policies and communications regarding ESG matters, and makes recommendations to the Board regarding potential actions by the Company. Our Board is committed to active oversight of our ESG-related matters, including reviewing the status and performance of our ESG initiatives at least semi-annually. To learn more about our ESG practices, visit our website at www.investor.clearwayenergy.com/green-bonds.
We have issued approximately $2.3 billion of corporate green bonds under a green bond framework that applies the net proceeds to finance or refinance, in part or in full, new and existing projects and assets meeting certain criteria focused on the supply of energy from renewable resources, including solar energy and wind energy. Our green bond framework received a second party opinion from Sustainalytics, an outside consultant with recognized expertise in ESG research and analysis, with respect to the credibility of the green bond framework and its alignment with the four core components of our Green Bond Principles (2018).
We include safety performance goals in the annual incentive plan for our management and we had zero fatalities in 2020. In response to the ongoing coronavirus (COVID-19) pandemic, the Company has implemented preventative measures and developed corporate and regional response plans to protect the health and safety of its employees, customers and other business counterparties, while supporting the Company’s suppliers and customers’ operations to the best of its ability in the circumstances. The Company also has modified certain business practices (including discontinuing all non-essential business travel, implementing a temporary work-from-home policy for employees who can execute their work remotely and encouraging employees to adhere to local and regional social distancing, more stringent hygiene and cleaning protocols across the Company’s facilities and operations and self-quarantining recommendations) to support efforts to reduce the spread of COVID-19 and to conform to government restrictions and best practices encouraged by governmental and regulatory authorities. The Company continues to evaluate these measures, response plans and business practices in light of the evolving effects of COVID-19.
As discussed in greater detail below, we have focused our diversity, equity and inclusion efforts in three areas — Our People, Our Product & Customers and Our Purchasing — through our launch of our Equity, Partnership & Inclusion Council, or EPIC. With the involvement of our employees, EPIC is advancing efforts in each of these areas to identify and implement opportunities for us to address equity, partnership and inclusion issues in its business activities.
Human Capital
We focus on attracting, developing and retaining a team of highly talented and motivated employees. We also depend upon personnel of CEG for the provision of management, administration O&M and certain other services at certain of our renewable generation facilities. For more detail regarding our relationship with CEG, see “Certain Relationships and Related Person Transactions.” We regularly conduct assessments of our compensation and benefit practices and pay levels to help ensure that staff members are compensated fairly and competitively. We devote extensive resources to staff development and training, including tuition assistance for career-enhancing academic and professional programs. Employee performance is measured in part based on goals set in alignment with our annual objectives. We recognize that our success is based on the talents and dedication of those we employ, and we are highly invested in their success.
We are committed to maintaining a workplace that acknowledges, encourages, and values diversity and inclusion. We believe that individual differences, experiences, and strengths enrich the culture and fabric of our organization. Having employees with backgrounds and orientations that reflect a variety of viewpoints and experiences also helps us to better understand the needs of our customers and the communities in which we operate.
By leveraging the multitude of backgrounds and perspectives of our team and developing ongoing relationships with diverse vendors, we achieve a collective strength that enhances the work place and makes the Company a better business partner for our customers and others with a stake in our success.
In 2020, we launched our Equity, Partnership & Inclusion Council. As part of our commitment, the Company provides education on topics related to diversity, inclusion, and anti-racism. We also identified three areas of focus — Our People, Our Product & Customers and Our Purchasing. With the involvement
 
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of our employees, EPIC is advancing efforts in each of these areas to identify and implement opportunities for us to address equity, partnership and inclusion issues in our business activities.
Our People focuses on education and training; diversity, equity and inclusion policies and recruitment strategies; community and industry partnerships; and maintaining high employee engagement and retention.
Our Product & Customers focuses on identifying and eliminating any sales practices that could have a discriminatory impact and creating program development for low-income customers.
Our Purchasing focuses on establishing a non-discriminatory practices standard for the Company’s suppliers, diverse vendor sourcing and benchmarking.
In addition to the personnel of CEG, we rely on other third-party service providers in the daily operations of certain of our renewable and conventional generation facilities.
 
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PROPOSALS TO BE VOTED ON
PROPOSAL NO. 1
ELECTION OF DIRECTORS
Each of the nine nominees for director named in this Proxy Statement has been nominated by the Board upon recommendation of the Corporate Governance, Conflicts and Nominating Committee. The persons named as proxies on the proxy card intend to vote the proxies for the election of the nominees listed below to the Board. Proxies cannot be voted for a greater number of persons than the number of nominees named. Each nominee listed below has consented to being named in this Proxy Statement and to serve as a director if elected. The biography for each nominee includes the specific experience, qualifications, attributes and skills that led the Board to conclude that the nominee should serve as a director. The Board believes that each of the directors has valuable individual skills and experiences that, taken together, provide the Company with the variety and depth of knowledge, judgment and vision necessary to provide effective oversight of the Company.
Nominees for Director
The following nine directors are being nominated for a one-year term, and will be elected annually. Each director will hold office until his or her successor has been duly elected and qualified or until the director’s earlier death, resignation or removal.
 
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[MISSING IMAGE: ph_jonathanbram-bw.jpg]
Jonathan Bram
Age: 55
Chairman of the Board
Compensation Committee
Mr. Bram has served as a director and Chairman of the Board since August 2018. Mr. Bram is a Founding Partner of GIP and serves on its Investment and Operating Committees. He leads GIP’s Power industry investment team in North America. Prior to the formation of GIP in 2006, Mr. Bram spent 15 years at Credit Suisse as a Managing Director in the Investment Banking Division, where he served as Co-Head of the Global Industrial and Services Group. From 2002 to 2004, he was Chief Operating Officer of the Investment Banking Division and prior to that time he was co-head of corporate finance for the 150 person U.S. Energy Group. Mr. Bram represented the firm in raising more than $30 billion of debt and equity capital for electric utilities and independent power generators globally. These companies and projects included renewable power facilities that utilized wind, solar, geothermal and hydroelectric technologies. Mr. Bram is also a member of the Board of Directors of Clearway Energy Group LLC and previously served on the boards of Terra-Gen Power, Guacolda Energia, S.A. and Channelview Cogeneration. Mr. Bram holds an A.B. in Economics from Columbia College. Mr. Bram’s significant experience in investment banking for, and investments in, energy and power companies, as well as his leadership role at GIP, provide strong financial and transactional experience to our Board.
[MISSING IMAGE: ph_nathanielanschuetz-bw.jpg]
Nathaniel Anschuetz
Age: 33
Mr. Anschuetz has served as a director since August 2018. Mr. Anschuetz is a Principal at GIP. Prior to joining GIP in 2012, Mr. Anschuetz was an Analyst in the Power & Utilities Coverage Group at Citigroup from June 2010 through June 2012. Mr. Anschuetz is also a member of the Board of Directors of Clearway Energy Group LLC and MAP RE/ES. Mr. Anschuetz graduated with cum laude honors from Columbia College in 2010 with an A.B. in Economics and Operations Research, and a concentration in Sustainable Development. Mr. Anschuetz’s financial expertise provides significant value to our Board.
 
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[MISSING IMAGE: ph_brainford-bw.jpg]
Brian R. Ford
Age: 72
Lead Independent Director
Audit Committee (Chair)
Compensation Committee
Corporate Governance, Conflicts and Nominating Committee
Mr. Ford has served as a director since July 2013 and Lead Independent Director since January 2019. Mr. Ford was the Chief Executive Officer of Washington Philadelphia Partners, LP, a real estate investment company, from 2008 through 2010. He retired as a partner from Ernst & Young LLP in June 2008 where he had been employed since 1971. Mr. Ford currently serves on the board of FS Investment Corporation portfolios, a specialty finance company that invests primarily in the debt securities of private U.S. middle-market companies, since 2013, where he also serves as the chairman of the audit committee. He also serves on the board of Drexel University. From 2013 to 2020, Mr. Ford served on the board of AmeriGas Propane, Inc., where he also served as a member of its audit and corporate governance committees. Mr. Ford received his B.S. in Economics from Rutgers University. Mr. Ford’s extensive experience in accounting and public company matters provides strong financial, audit and accounting skills to our Board.
[MISSING IMAGE: ph_brucemaclennan-bw.jpg]
Bruce MacLennan
Age: 54
Mr. MacLennan has served as a director since August 2018. Mr. MacLennan is a Partner of GIP and serves on its Investment and Operating Committees. Prior to joining GIP at its formation in 2006, Mr. MacLennan spent eight years at Credit Suisse, where he most recently served as a Director in the Investment Banking Division. Previously, he spent six years at Citibank and Citicorp Securities in New York and Tokyo. Mr. MacLennan holds an A.B. from Harvard University and an M.B.A. from the Wharton School of the University of Pennsylvania. He is currently a member of the Board of Directors of Clearway Energy Group LLC and MAP RE/ES and previously served on the board of Competitive Power Ventures. Mr. MacLennan’s significant experience in investment banking for, and investments in, energy and power companies, as well as his leadership role at GIP, provide strong financial and transactional experience to our Board.
 
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[MISSING IMAGE: ph_ferrellmcclean-bwlr.jpg]
Ferrell P. McClean
Age: 74
Corporate Governance, Conflicts and Nominating Committee (Chair)
Compensation Committee (Chair)
Audit Committee
Ms. McClean has served as a director since July 2013. Ms. McClean was a Managing Director and the Senior Advisor to the head of the Global Oil & Gas Group in Investment Banking at J.P. Morgan Chase & Co. from 2000 through the end of 2001. She joined J.P. Morgan & Co. Incorporated in 1969 and founded the Leveraged Buyout and Restructuring Group within the Mergers & Acquisitions Group in 1986. From 1991 until 2000, Ms. McClean was a Managing Director and co-headed the Global Energy Group within the Investment Banking Group at J.P. Morgan & Co. She retired as a director of GrafTech International in 2014, El Paso Corporation in 2012 and Unocal Corporation in 2005. Ms. McClean’s experience in investment banking for industrial companies as well as her experience and understanding of financial accounting, finance and disclosure matters enables her to provide essential guidance to our Board and management team.
[MISSING IMAGE: ph_danielbmore-bw.jpg]
Daniel B. More
Age: 64
Corporate Governance, Conflicts and Nominating Committee
Compensation Committee
Audit Committee
Mr. More has served as a director since February 2019. Mr. More has been a Senior Advisor with Guggenheim Securities since October 2015. Mr. More retired as a Managing Director and Global Head of Utility Mergers & Acquisitions of the Investment Banking Division of Morgan Stanley in 2014. He held such position since 1996. Mr. More has been an investment banker since 1978 and has specialized in the utility sector since 1986. Mr. More has served as a director of SJW Group since April 2015. He served as a director of Saeta Yield from February 2015 to June 2018 and served as a director of the New York Independent System Operator from April 2014 until February 2016. Mr. More’s extensive experience in investment banking, including capital raising and strategic initiatives, combined with experience as a director of energy industry companies, provides significant value to our Board.
 
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[MISSING IMAGE: ph_stanleyoneal-bw.jpg]
E. Stanley O’Neal
Age: 69
Compensation Committee
Audit Committee
Mr. O’Neal has served as a director since August 2018. Mr. O’Neal served as Chairman of the Board and Chief Executive Officer of Merrill Lynch & Co., Inc. until October 2007. He became Chief Executive Officer of Merrill Lynch in 2002 and was elected Chairman of the Board in 2003. Mr. O’Neal was employed with Merrill Lynch for 21 years, serving as President and Chief Operating Officer from July 2001 to December 2002; President of U.S. Private Client from February 2000 to July 2001; Chief Financial Officer from 1998 to 2000 and Executive Vice President and Co-head of Global Markets and Investment Banking from 1997 to 1998. Before joining Merrill Lynch, Mr. O’Neal was employed at General Motors Corporation where he held a number of financial positions of increasing responsibility. Currently, Mr. O’Neal is the chairman of the nominating and governance committee and a member of the compensation committee of Arconic Corp., an aluminum manufacturing company and the former parent company of Alcoa Inc. Mr. O’Neal is also a director and member of the nominating and governance committee of Element Solutions Inc. (formerly Platform Specialty Products Corporation), a global, diversified producer of high technology specialty chemical products and provider of technical services. Mr. O’Neal was a director of General Motors Corporation from 2001 to 2006, chairman of the board of Merrill Lynch & Co., Inc. from 2003 to 2007, and a director of American Beacon Advisors, Inc. (investment advisor registered with the Securities and Exchange Commission) from 2009 to September 2012. Mr. O’Neal was selected to serve as a director due to, among other factors, his extensive executive experience, financial expertise and leadership skills, which enable him to provide unique guidance to our Board and management team.
[MISSING IMAGE: ph_christophersotos-bw.jpg]
Christopher S. Sotos
Age: 49
President, CEO and Director
Mr. Sotos has served as President and CEO since May 2016, and as a director since May 2013. Mr. Sotos had also served in various positions at NRG Energy, Inc. (“NRG”), including most recently as Executive Vice President — Strategy and Mergers and Acquisitions from February 2016 through May 2016 and Senior Vice President — Strategy and Mergers and Acquisitions from November 2012 through February 2016. In this role, he led NRG’s corporate strategy, mergers and acquisitions, strategic alliances and other special projects for NRG. Previously, he served as NRG’s Senior Vice President and Treasurer from March 2008 to September 2012, where he was responsible for all treasury functions, including raising capital, valuation, debt administration and cash management. Mr. Sotos also previously served as a director of FuelCell Energy, Inc. from September 2014 to April 2019. As President and CEO of the Company, Mr. Sotos provides our Board with management’s perspective regarding the Company’s day to day operations and overall strategic plan. Mr. Sotos also brings strong financial and accounting skills to our Board.
 
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[MISSING IMAGE: ph_scottstanley-bw.jpg]
Scott Stanley
Age: 64
Mr. Stanley has served as a director since August 2018. Mr. Stanley has been employed by GIP as an Operating Principal since April 2007, and in August 2018 was appointed as an Operating Partner. Mr. Stanley holds a B.S. in Ceramic Engineering from The Ohio State University and has 39 years of experience in operational roles, including prior assignments with General Electric, Honeywell, and United Technologies Corporation. Working predominantly in the transport sector with GIP, Mr. Stanley has held roles as Chief Operating Officer with London City Airport, Gatwick Airport, and Pacific National and was also on the Board of Directors at Edinburgh Airport. Mr. Stanley is also a member of the Board of Directors of Clearway Energy Group LLC and Italo S.p.A. and previously served on the Board of Directors of Naturgy Energy Group, S.A. Mr. Stanley adds significant operational expertise to our Board.
The Board recommends a vote “FOR” the election to the Board of each of the foregoing nominees. Proxies received by the Board will be voted “FOR” each of the nominees unless a contrary vote is specified.
 
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DIRECTOR COMPENSATION
The chart below describes the compensation program established for our directors for their service as Board members, chairs of the Committees and Lead Independent Director, as applicable, in 2020. Only our independent, non-employee directors receive compensation for their services as directors, which is set by our Board based on recommendations by the Compensation Committee. Our CEO, Mr. Sotos, does not receive compensation for his service as a director, and none of the directors who are officers or employees of GIP receive compensation for their services as directors.
Compensation Element
Compensation Amount
Annual Cash Retainer
$80,000
Annual Deferred Stock Unit Award
$110,000
Lead Independent Director Retainer
$20,000
Audit Committee Chair Retainer
$25,000
Compensation Committee Chair Retainer
$15,000
Corporate Governance, Conflicts and Nominating Committee Chair Retainer
$20,000
Employee or Directors Affiliated with GIP
No compensation
Our independent directors receive an annual retainer of cash and equity for their services as directors. The independent directors received $80,000 in the form of cash and $110,000 in the form of stock awards issued under our Amended and Restated 2013 Equity Incentive Plan (the “Equity Incentive Plan”). Each stock award may, pursuant to an independent director’s deferral election, be awarded as deferred stock units (the “DSUs”). In addition, directors may defer the cash component of their annual retainers into additional DSUs.
Each DSU issued in 2020 was equivalent in value to one share of Class C common stock and represents the right to receive one such share of Class C common stock payable at the time elected by the director, or in the event the director does not make an election with respect to payment in a particular year, in accordance with his or her prior deferral election. In the event that a director’s service with the Company is terminated for any reason, other than cause, DSU awards are payable in accordance with such director’s deferral election. If a director’s service with the Company is terminated for cause, the award is forfeited. In connection with the grants of the DSUs, each independent director also received dividend equivalent rights (“DERs”) which become vested proportionately with the DSUs to which they relate. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a DSU award (if such share were outstanding rather than being subject to the DSU award). Typically, accrued DERs are credited as additional shares that will be subject to the vesting and payment terms of the corresponding award of DSUs. Accordingly, DERs are intended to represent the economic value that our independent directors would otherwise receive if, as applicable, they did not elect to receive DSUs and they, instead, held the shares relating to the DSUs outright.
Similar to its competitive assessment of NEO compensation, Deloitte, the Compensation Committee’s compensation consultant, performed a review of director compensation in early 2020. Results of the review were shared with the Compensation Committee, which made a recommendation to the full Board for final approval. The Compensation Committee previously implemented a stock ownership guideline for directors requiring stock ownership equal to five times the annual cash retainer fee. Although directors are not required to make purchases of our common stock to meet their target ownership multiple, they are restricted from divesting any securities until such ownership multiple is attained, except to make a required tax payment, and must maintain their ownership multiple after any such transactions.
In addition, our independent directors are reimbursed for out-of-pocket expenses in connection with attending meetings of the Board or its Committees. As a general matter, we expect that in the future, any independent director will receive grants of equity-based awards upon appointment to our Board and from time to time thereafter for so long as he or she serves as a director.
Each member of our Board is indemnified for his or her actions associated with being a director to the fullest extent permitted under Delaware law. In addition, we have entered into indemnification agreements
 
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with each of our directors as well as our executive officers. The indemnification agreements provide the directors and executive officers with contractual rights to indemnification, expense advancement and reimbursement, to the fullest extent permitted under Delaware law.
Director Compensation
Fiscal Year Ended December 31, 2020
Name
Fees Earned
or
Paid in Cash
Stock
Awards(1)
Total
Brian R. Ford
$ 102,500 $ 184,435 $ 286,935
Ferrell P. McClean(2)
$ 294,698 $ 294,698
Daniel B. More(3)
$ 213,797 $ 213,797
E. Stanley O’Neal(4)
$ 210,235 $ 210,235
(1)
Reflects the grant date fair value of stock awards granted, whether as DSUs or otherwise, and any DERs received in 2020 determined in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation Stock Compensation, the full amount of which is recorded as a compensation expense in the income statement for the 2020 fiscal year. For all directors, the grant date fair value of the stock awards that are payable in Class C common stock was based on the closing price of our Class C common stock on the date of grant, or the last trading day prior if such day is not a trading day. For all directors, the grant date fair value of the stock awards granted on June 1, 2020 for their period of service beginning on June 1, 2020 through May 31, 2021 was based on the June 1, 2020 Class C common stock closing stock price of $22.06.
(2)
Ms. McClean elected to receive the cash portion of her director compensation, her $20,000 compensation for serving as the Corporate Governance, Conflicts and Nominating Committee Chair, and her $15,000 compensation for serving as the Compensation Committee Chair in the 2020 fiscal year in the form of DSUs that are payable in Class C common stock upon termination of service as a Board member.
(3)
Mr. More elected to receive the cash portion of his director compensation in the 2020 fiscal year in the form of DSUs that are payable in Class C common stock upon termination of service as a Board member.
(4)
Mr. O’Neal elected to receive the cash portion of his director compensation in the 2020 fiscal year in the form of DSUs that are payable in Class C common stock upon termination of service as a Board member.
The following table sets forth the aggregate number of stock awards (DSUs and any DERs thereon) held by each of the independent directors as of December 31, 2020. All DSUs held by the independent directors are payable upon termination of service as a Board member.
Name
Class A
Stock Awards
Class C
Stock Awards
Brian R. Ford
6,566 45,341
Ferrell P. McClean
13,131 56,978
Daniel B. More
24,972
E. Stanley O’Neal
21,495
 
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PROPOSAL NO. 2
APPROVAL, ON AN ADVISORY BASIS, OF THE COMPANY’S EXECUTIVE COMPENSATION
Under Section 14A of the Exchange Act, the stockholders of the Company are entitled to vote at this year’s Annual Meeting to approve the compensation of the NEOs, as disclosed in this Proxy Statement pursuant to Item 402 of Regulation S-K (“Regulation S-K”) of the rules and regulations under the Securities Act of 1933, as amended (the “Securities Act”). Currently, this vote is conducted every year. The next vote will occur at the 2022 Annual Meeting.
As described more fully in the CD&A beginning on page 55, the Company’s executive compensation program is designed to attract, retain and reward top executive talent. The intent of the Company’s compensation program is to reward the achievement of the Company’s annual goals and objectives while supporting the Company’s long-term business strategy.
This proposal, commonly known as a “say on pay” proposal, gives stockholders the opportunity to express their views on the NEOs’ compensation. This vote is not intended to address any specific item of compensation, but rather the overall compensation of the NEOs as described in this Proxy Statement. Accordingly, the Board recommends that stockholders vote in favor of the following resolution:
“RESOLVED, that the compensation paid to the NEOs, as disclosed pursuant to Item 402 of Regulation S-K, including the CD&A, compensation tables and narrative discussion, is hereby APPROVED.”
The say on pay vote is advisory and therefore not binding on the Company, the Board or the Compensation Committee. However, the Board and the Compensation Committee value the opinions of the stockholders and to the extent there is a significant number of votes against the NEO compensation as disclosed in this Proxy Statement, stockholders’ concerns will be considered and the Board and the Compensation Committee will evaluate actions necessary to address those concerns.
The Board recommends a vote “FOR” the approval of the Company’s executive compensation as disclosed in this Proxy Statement. Proxies received by the Board will be voted “FOR” the approval of the Company’s executive compensation unless a contrary vote is specified.
 
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PROPOSAL NO. 3
APPROVAL OF THE AMENDMENT AND RESTATEMENT OF THE EQUITY INCENTIVE PLAN TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AVAILABLE FOR ISSUANCE UNDER THE PLAN AND TO MAKE CERTAIN ADDITIONAL CHANGES
This Proposal No. 3 relates to an amendment to the Equity Incentive Plan (referred to throughout this Proposal No. 3 as, the “LTIP”), as reflected in an amended and restated version of the LTIP (the LTIP, as amended and restated, is referred to as the “Restated LTIP” for purposes of this Proposal No. 3). In 2013, the LTIP was originally approved to promote the long-term growth and profitability of the Company by providing certain directors, officers, employees and consultants of the Company incentives to maximize stockholder value and to enable the Company to attract, retain, and reward the best available persons for positions of responsibility. On February 19, 2021, the Board unanimously approved, subject to stockholder approval, the Restated LTIP to replace the version of the LTIP that was in effect immediately prior to such Board approval (the “Prior LTIP”). The following description of the Restated LTIP in this Proxy Statement is qualified in its entirety by reference to, and should be read in conjunction with, the full text of the Restated LTIP, which is attached to this Proxy Statement as Appendix A.
Currently, 2,000,000 shares of common stock of the Company are reserved for issuance under the Prior LTIP. Of the 2,000,000 shares reserved, 967,052 shares of common stock remain available for future issuance under the Prior LTIP as of March 4, 2021. In order to continue to attract and retain highly qualified directors, officers, employees and consultants, the Board believes it is in the best interests of the Company to amend the LTIP to increase the total number of shares available for awards thereunder from 2,000,000 shares to 4,500,000 shares.
Other Changes Proposed to be made to the LTIP
In addition to increasing the number of available shares for awards, the Restated LTIP also amends the Prior LTIP, subject to stockholder approval, as follows:

Extends the term of the LTIP until February 19, 2031;

Removes obsolete references to Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Code”) (and makes related adjustments) which no longer apply to awards under the LTIP as a result of the enactment of the Tax Cuts and Jobs Act of 2017 (the “TCJA”), which eliminated the performance-based compensation exception under Section 162(m) of the Code for tax years beginning on or after January 1, 2018; and

Adjusts the limitations under the LTIP with respect to the aggregate number of shares subject to awards and/or value of awards that may be granted to a participant during a fiscal year, including by applying such limitations by type of award.
Purpose of Amendment
The Company considers the Restated LTIP an essential element of total compensation and believes the Restated LTIP promotes its interests and the interests of its stockholders by (i) providing certain directors, officers, employees and consultants of the Company incentives to maximize stockholder value and (ii) enabling the Company to attract, retain and reward the best available persons for positions of responsibility. For these reasons, the Company believes it is prudent to maintain a sufficient number of available shares under the Restated LTIP to allow the Company to make equity awards to LTIP participants. Therefore, the Company is seeking approval of the Restated LTIP to reserve an additional 2,500,000 shares for awards thereunder. The Company believes that such additional shares will be sufficient to provide awards for at least eight (8) years.
The other proposed changes in the Restated LTIP extend the term of the LTIP, update the LTIP to reflect the TCJA’s elimination of the performance-based compensation exception under Section 162(m) of the Code, adjust the LTIP’s annual limitations on participant awards, and make certain other clarifying changes.
 
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Why You Should Vote to Approve the Restated LTIP

The Restated LTIP allows us to continue providing equity-based compensation to certain of our directors, officers, employees and consultants, which directly aligns the interests of such individuals with those of our stockholders.

We rely on programs like the Restated LTIP to attract, retain and reward qualified individuals. Without this ability, we may lose our competitive standing in the market and risk losing the best available persons for positions of responsibility.

Our ability to continue granting performance awards under the Restated LTIP reinforces our pay-for-performance culture which is a key component of creating long-term stockholder value. The large majority of the awards we granted under the LTIP in 2020 to our named executive officers were performance-based awards.

The Restated LTIP incorporates state-of-the-art governance best practices for incentive plans including by:

subjecting awards to certain minimum vesting periods unless and until a vesting acceleration event applies with respect to such awards (except with respect to 5% of the total number of shares available for issuance or with respect to awards granted to non-employee directors);

prohibiting the direct or indirect repricing of stock options or stock appreciation rights without stockholder approval;

not allowing shares withheld or delivered to satisfy an exercise price or tax withholding requirements to be available (i.e., recycled) for future grants;

requiring that dividend equivalent rights granted on account of performance awards may only be paid if the underlying performance conditions of the award are satisfied; and

requiring that all options and stock appreciation rights must have an exercise price or base price equal to or greater than the fair market value of the underlying shares on the date of grant.
Equity Overview and Equity Grant History
The tables below provide additional information on our common stock outstanding (as of December 31, 2020 and March 4, 2021), outstanding equity awards (as of March 4, 2021) and equity grant details with respect to each of the past three fiscal years.
Equity Overview
As of December 31, 2020
As of March 4, 2021
Common Shares Outstanding (Basic – All Share Classes)
201,713,187
Weighted Average Common Shares Outstanding (Basic – All Share Classes)
200,363,101
Time-Based Full-Value Equity Awards Outstanding
339,766
Performance-Based Full-Value Equity Awards Outstanding
269,006
Option Awards Outstanding
0
Equity Grant History
FY 2018
FY 2019
FY 2020
Time-Based Equity Granted
237,501 171,840 167,695
Performance-Based Equity (Target)
50,687 82,410 84,343
Stock Options Granted
0 0 0
Performance-Based Equity (Actual Earned)
0 0 79,123
 
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Securities Authorized for Issuance under the LTIP as of March 4, 2021
Plan Category
(a)
Number of Securities
to be Issued Upon
Exercise of
Outstanding Options,
Warrants and Rights
(b)
Weighted-Average Exercise
Price of Outstanding
Options, Warrants and
Rights
(c)
Number of Securities
Remaining Available
for Future Issuance
Under Equity Compensation
Plans (Excluding
Securities Reflected
in Column (a))(1)
Equity compensation plans approved by security holders – Class A common stock
19,935 $
Equity compensation plans approved by security holders – Class C common stock
588,837 967,052
Equity compensation plans not approved by security holders
N/A
Total
608,772 967,052
(1)
Beginning in May 2015, awards to be granted and associated dividend equivalent rights to be issued under the LTIP convert to Class C common stock upon vesting.
Description of the Plan
The following is a summary of the material features of the Restated LTIP, which is qualified in its entirety by reference to the complete text of the Restated LTIP, attached to this Proxy Statement as Appendix A.
Eligibility
Awards are generally granted to those directors, officers, employees and consultants of the Company who are selected by the Compensation Committee for participation in the Restated LTIP. As of January 1, 2021, the number of such directors, officers, employees and consultants of the Company eligible to be selected for participation in the Restated LTIP was approximately 305.
Types of Awards
The Restated LTIP provides for the grant of options, stock appreciation rights, restricted stock, restricted stock units, performance awards, deferred stock units, other stock-based awards and other cash-based awards (collectively, “Awards”). The material features of these types of Awards are described below. Subject to the terms of the Restated LTIP, the specific terms and conditions of any Award are established in the discretion of the Compensation Committee at the time of grant and set forth in an award agreement issued to the participant.
Options.   Options under the Restated LTIP may consist of either incentive stock options qualified under Section 422 of the Code or nonqualified stock options as designated by the Compensation Committee in the award agreement for the options. Options are rights to purchase a specified number of shares of common stock at a specified price. Subject to the terms of the Restated LTIP, the option price, the number of shares subject to an option, and the conditions on exercisability will be determined by the Compensation Committee at the date of grant.
Under the Restated LTIP, the exercise price per share of an option may not be less than the fair market value of a share of common stock of the Company as of the date of grant, except for certain awards that are granted in assumption of or in substitution for awards of a company that the Company acquired and
 
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subject to adjustment that may occur pursuant to the terms of the Restated LTIP in connection with certain recapitalization transactions. Under the Restated LTIP, the “fair market value” of a share is equal to the closing selling price (or bid price) of the common stock on the NYSE (or other stock exchange on which the stock is listed) on the date the value is being determined, or if such market is not open on that day, the last preceding day on which the market was open. If an option granted to an employee that owns more than 10% of the total combined voting power of all classes of Company stock on the date of grant (a “10% Stockholder”) is intended to qualify as an incentive stock option, the exercise price may not be less than 110% of the fair market value of the common stock on the date of grant.
Under the Restated LTIP, no option may be exercisable more than 10 years after the date the option is granted; provided that if an option expires on a day that the participant cannot exercise the option because such exercise would violate any applicable securities laws, the expiration may be tolled at the discretion of the Compensation Committee until a date not later than 30 days following the lapse of any such restriction, subject to certain tax restrictions. However, an option granted to a 10% Stockholder that is intended to qualify as an incentive stock option may not be exercisable more than 5 years from the grant date. Unless otherwise determined by the Compensation Committee, participants may exercise any vested options by paying the exercise price either in cash, unrestricted shares of common stock, any cashless exercise procedures approved by the Compensation Committee, by withholding shares of common stock otherwise deliverable upon exercise of the option, or any combination of the foregoing. In general, prior to exercise, participants will not have any rights as stockholders with respect to any shares of common stock covered by an option.
Stock Appreciation Rights (“SARs”).   Under a SAR, a participant is awarded a right to receive an amount equal to the excess of the fair market value of one share on the date of exercise over the grant price of the SAR. In no event may the base amount under a SAR be less than the fair market value of the shares underlying the SAR as of the date of grant, except for certain awards that are granted in assumption of or in substitution for awards of a company that the Company acquired and subject to adjustment that may occur pursuant to the terms of the Restated LTIP in connection with certain recapitalization transactions. The appreciated value of the stock subject to a SAR will be exercisable by, and payable, to a participant at the time and under the terms and conditions of the SAR established by the Compensation Committee at the time of grant. SARs may be granted either alone or in tandem with options. The amount payable under a SAR will be paid in cash or shares of common stock, or any combination of cash or common stock as the Compensation Committee may decide. In general, prior to payment of a SAR in common stock, a participant will not have any rights as a stockholder with respect to the shares of common stock underlying a SAR.
Restricted Stock.   Under a restricted stock award, a participant is issued shares of common stock of the Company that are subject to certain forfeiture or vesting provisions and restrictions on transferability as determined by the Compensation Committee at the time of the Award and consistent with the Restated LTIP. Unless otherwise provided under the terms of the Award, a participant has voting and dividend rights with respect to awards of restricted stock, except that any dividends on shares of restricted stock that vest based upon the satisfaction of any performance conditions will only be paid if the underlying performance conditions are satisfied. Any stock or other securities received as a distribution with respect to restricted stock are subject to the same restrictions that apply to the shares of restricted stock.
Restricted Stock Units (“RSUs”).   Each RSU represents the right of a participant to be paid one share of common stock of the Company, or the equivalent fair market value thereto, subject to the vesting provisions, restrictions and other terms and conditions of the Award and consistent with the Restated LTIP. Prior to the issuance of common stock following the vesting of RSUs, the participant will not have any rights as a Company stockholder. Pursuant to the tax rules applicable to nonqualified deferred compensation plans under Section 409A, an Award of RSUs may permit the participant to elect to defer the receipt of shares of common stock that would otherwise be payable when the units vest.
Performance Awards.   Performance awards entitle a participant to receive an amount based on the satisfaction of certain performance criteria or goals established in the discretion of the Compensation Committee for a performance measurement period of at least 12 months, but otherwise determined by the Compensation Committee in its discretion. Performance awards may include specific dollar-value target awards or the grant of performance units or shares, the value of which will be determined by the Compensation Committee at the time of grant and may be based on the fair market value of common stock of the Company. In general, a participant is required to remain employed or engaged by the Company at
 
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the end of the performance measurement period in order to receive payment of a performance award. Performance awards earned or vested may be paid in shares of common stock of the Company, cash or other property or securities of the Company as the Compensation Committee may determine.
Deferred Stock Units (“DSUs”).   Each DSU represents the right of a participant to be paid one share of common stock of the Company at the end of a deferral period established under the Award by the Compensation Committee or elected by the participant under the terms of an Award and the tax rules applicable to nonqualified deferred compensation plans under Section 409A of the Code. Unless otherwise provided under an Award, during the applicable deferral period, a participant will not have any rights as a stockholder of the Company. However, unless otherwise provided, once the deferral period ends, the participant will be entitled to receive accumulated dividends and distributions with respect to the corresponding number of shares of common stock underlying each DSU. Except in the case of death, disability or retirement, a participant is required to remain employed or engaged by the Company as of the end of the deferral period in order to receive payment of a DSU.
Participants who are non-employee directors may elect to defer payment of a portion of the annual fee paid to such director under the Company’s director compensation policy, subject to restrictions and limitations established by the Compensation Committee from time to time. Such deferred amounts are converted to DSUs and subject to the terms of the Restated LTIP.
Other Cash-Based Awards.   The Compensation Committee may from time to time grant other cash-based Awards to participants in such amounts and on such terms and conditions as it determines in its sole discretion.
Dividend Equivalent Rights (“DERs”)
The Restated LTIP provides that an Award may include a DER entitling the grantee to receive amounts equal to all or any portion of the dividends that would be paid on the shares of common stock covered by such Award as if the common stock had been delivered pursuant to such Award. In the event such a provision is included in an award agreement, the Compensation Committee will determine whether the payments will be made in cash, in shares of common stock or in another form, the time or times at which they are made, and such other terms and conditions as the Compensation Committee deems appropriate. DERs granted on account of performance awards may only be paid if the underlying performance conditions of the Award are satisfied.
Shares Subject to the Restated LTIP
If this proposal is approved by the stockholders, an additional 2,500,000 shares of our common stock will be reserved for issuance under the Restated LTIP so that the total shares reserved for issuance under the Restated LTIP will be 4,500,000. This stock may be either authorized and unissued shares or treasury shares held by the Company. The shares of common stock subject to Awards that expire, terminate or are forfeited, will be available for future grants under the Restated LTIP. Generally, certain Awards that are granted in assumption of or in substitution for awards of a company that the Company acquired will not count against this share reserve under the Restated LTIP and in some circumstances available shares of certain stockholder approved plans of a company that the Company acquires may be used for Awards under the Restated LTIP.
In the event that a change affecting the capital structure of the Company is implemented, such as a stock dividend, stock split or merger, the Compensation Committee will equitably adjust the number and kind of shares or other property available for issuance under the Restated LTIP, and the number, kind and exercise price of outstanding Awards. In the event of a merger, consolidation, or other reorganization where the Company is not the surviving or continuing entity, all outstanding Awards will be either assumed by the surviving or continuing entity or canceled in exchange for cash or other property.
The market value of a share of Class A and Class C common stock based on the closing prices on the NYSE on March 4, 2021, was $25.86 and $27.38, respectively.
 
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Administration
The Restated LTIP is administered by the Compensation Committee. Each member of the Compensation Committee, with the exception of Mr. Bram, is an independent, non-employee member of the Board. Subject to the provisions of the Restated LTIP and Board approval, when applicable, the Compensation Committee has the discretionary power and authority to select persons to participate in the Restated LTIP and to determine the type, amount, timing and terms and conditions of Awards granted under the Restated LTIP. The Compensation Committee also has the power and authority to interpret the terms of the Restated LTIP and Awards issued thereunder.
The Committee may establish such rules and regulations and take such actions as it deems necessary or advisable for the proper administration of the Restated LTIP. All decisions and interpretations by the Compensation Committee regarding the Restated LTIP are final and binding on all participants and beneficiaries, unless an arbitration or other dispute resolution procedure is expressly provided in the applicable Award grant agreement. In addition, members of the Compensation Committee and the Company’s officers will not be liable for any acts or omissions in connection with the performance of their duties under the Restated LTIP, except in the case of the person’s own willful misconduct or as expressly provided by statute.
Vesting of Awards
Awards are generally subject to a minimum restriction period, or performance period, as applicable, of 1 year, and in the case of time-based awards (other than stock options and SARs), 3 years; provided, however, that earlier vesting may be triggered upon a participant’s termination of employment or service by reason of death, disability, or in connection with a change in control. Notwithstanding the foregoing, 5% of the total number of shares available for issuance and awards granted to non-employee directors under the Restated LTIP will not be subject to the minimum restriction or performance periods.
Termination of Employment
Unless the Compensation Committee determines otherwise or as may otherwise be provided in a grant agreement, and except as provided above for DSUs, if a participant’s employment or performance of service with the Company ceases, the following terms and conditions apply to the participant’s outstanding Awards:

Death.   All outstanding Awards will become fully vested, to the extent not already vested, and they will be exercisable, if applicable, for 1 year from the date of death, or until the Award expires if earlier.

Disability.   All outstanding Awards will become fully vested, to the extent not already vested, and they will be exercisable, if applicable, for 1 year from the date of disability, or until the Award expires if earlier.

Retirement.   All Awards that are not fully vested or exercisable on the retirement date will remain eligible for vesting pursuant to the grant agreement as though the participant was continuously employed by the Company throughout the relevant period; provided that retirement occurs more than 1 year following the applicable Award’s grant date; otherwise, such Awards that are not fully vested or exercisable on the retirement date will be forfeited. Notwithstanding the foregoing, if a director retires, all of his or her unvested Awards will immediately vest and be exercisable, if applicable, for 1 year after the retirement date, or until the Awards expire if earlier. In general, a director qualifies for retirement under the Restated LTIP if his or her service on the Board terminates after 5 years of service. Other participants in the Restated LTIP qualify for retirement upon termination from employment or service after attaining age 55 with 10 or more years of service.

Termination for Cause.   If a participant’s employment or service with the Company is terminated for cause, all Awards granted under the Restated LTIP will be immediately forfeited regardless of whether or not they are vested and/or exercisable. For purposes of the Restated LTIP, the term “cause” means any one or more of the following events unless otherwise provided in a participant’s grant agreement or employment agreement: conviction of, or agreement to a plea of nolo contendere to, a felony, or any crime or offense lesser than a felony involving the property of the Company or a
 
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subsidiary; conduct that has caused demonstrable and serious injury to the Company or a subsidiary, monetary or otherwise; willful refusal to perform or substantial disregard of duties properly assigned, as determined by the Company; breach of duty of loyalty to the Company or a subsidiary or other act of fraud or dishonesty with respect to the Company or a subsidiary; or violation of the Company’s code of conduct.

All Other Terminations.   All of the participant’s Awards that are vested and exercisable will remain exercisable, if applicable, for 90 days from the date of termination, or until the Award expires if earlier. All Awards that are not fully vested or exercisable on the date of termination will be forfeited.
Change in Control
All outstanding Awards, other than performance awards, will become vested and exercisable if (i) the Company undergoes a change in control and (ii) a participant is terminated pursuant to a qualifying termination. The Compensation Committee will determine the level at which performance awards will become vested under such circumstances. For purposes of the Restated LTIP, a change in control is deemed to occur in any one of the following events unless otherwise provided in a participant’s grant agreement: (1) any person or entity becoming the direct or indirect beneficial owner of 50% or more of the Company’s voting stock, (2) directors serving on the Board as of the Restated LTIP’s effective date cease to constitute at least a majority of the Board unless such directors are approved by a vote of at least two-thirds (2/3) of the incumbent directors, provided that a person whose assumption of office is in connection with an actual or threatened election contest or actual or threatened solicitation of proxies including by reason of agreement intended to avoid or settle such contest shall not be considered to be an incumbent director, (3) any reorganization, merger, consolidation, sale of all or substantially all of the assets of the Company or other transaction is consummated and the previous stockholders of the Company fail to own at least 50% of the combined voting power of the resulting entity (a “Business Combination”) or (4) the stockholders approve a plan or proposal to liquidate or dissolve the Company. For purposes of the Restated LTIP, a qualifying termination is an involuntary termination of a participant’s employment within the 6 months prior to, or 12 months following, a change in control, but excluding terminations for cause, death or disability.
If a change in control occurs as a result of a Business Combination described above, then the Compensation Committee may cancel any or all outstanding options under the Restated LTIP by paying the option holders an amount equal to the portion of the consideration, if any, that would have been payable to them pursuant to the transaction if their options had been fully exercised immediately prior to the transaction, less the aggregate exercise price of their options; or, if the options are underwater, cancel the options for no consideration or payment of any kind. Payments in exchange for options may be made in cash, securities, or other Company property as determined by the Compensation Committee in its sole discretion.
Annual Award / Compensation Limits
The following limitations apply under the Restated LTIP (such limitations are subject to adjustment in accordance with the terms of the Restated LTIP, as applicable):

The aggregate number of shares of common stock granted as Awards, other than performance awards, during any fiscal year to an employee or consultant may not exceed 500,000 shares;

The aggregate number of shares of common stock granted as performance awards during any fiscal year to an employee or consultant may not exceed 500,000 shares;

The total amount of cash payments made under performance awards during any fiscal year to an employee or consultant may not exceed $5,000,000 in the aggregate;

The aggregate grant value of shares of common stock granted as Awards during any fiscal year to a non-employee director may not exceed $500,000; and

The total amount of annual compensation (i.e., grant value equity and cash) paid to a non-employee director under the Restated LTIP may not exceed $750,000.
Transferability
Unless determined otherwise by the Compensation Committee, no Award granted under the Restated LTIP will be transferable by a participant, other than by will or the laws of descent and distribution, except
 
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to a participant’s family member by gift or pursuant to a qualified domestic relations order as defined by the Code or to a charitable organization, in each case only with Compensation Committee approval or as may be provided in an Award.
Clawback
If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirements under the securities laws, then any participant who has been paid an Award under the Restated LTIP based upon the affected report will be required to repay such Award at the discretion of the Board.
Duration and Amendment of the Restated LTIP
No Awards will be granted pursuant to the Restated LTIP after February 19, 2031. The Board or the Compensation Committee may amend or terminate the Restated LTIP at any time, except that no amendment shall become effective without prior approval of the stockholders of the Company if such approval is required by applicable law, regulations or the rules of any exchange or market on which the Company’s common stock is traded or listed or the amendment would increase the number of shares reserved for issuance under the Restated LTIP.
The Compensation Committee may amend the terms of any outstanding Award under the Restated LTIP, except that no amendment may materially adversely affect any right of a participant under an Award without his or her written consent. Furthermore, no amendment may reduce the exercise price of any options or SARs awarded under the Restated LTIP, exchange an option or a SAR which has an exercise price greater than the fair market value of a share of common stock for cash or shares of common stock, cancel an option or SAR in exchange for a replacement option or another Award with a lower exercise price, or reprice any outstanding Award, in each case without approval of the stockholders of the Company.
U.S. Federal Income Tax Consequences
The following is a summary of the current U.S. federal income tax consequences of awards made under the Restated LTIP. The summary is general in nature and does not purport to be a complete description of all applicable rules, and those rules (including those summarized here) are subject to change. The summary does not attempt to describe (i) any tax consequences arising in the context of a participant’s death or disability or (ii) any state or local or non-U.S. tax laws that may be applicable. The following information is provided for stockholders considering how to vote on this proposal and is not tax guidance to participants.
Nonqualified Stock Options
In general, no taxable income is realized by a participant upon the grant of a nonqualified stock option (an option that is not an incentive stock option). Rather, at the time of exercise of the option, the participant will recognize ordinary income for income tax purposes in an amount equal to the excess, if any, of the fair market value of the shares purchased over the exercise price. The Company generally will be entitled to a tax deduction at such time and in the same amount, if any, that the participant recognizes as ordinary income.
Incentive Stock Options (“ISOs”)
The Code provides for tax treatment of options qualifying as ISOs that may be more favorable to participants than the tax treatment accorded to nonqualified stock options. ISOs are not taxable to the participant at the time of grant. However, upon the exercise of an ISO, then, generally the participant will not recognize ordinary income and the Company will not be entitled to a deduction, although the difference between shares purchased over the exercise price of the ISO at the date of exercise is an addition to income in determining alternative minimum taxable income and such amount may be sufficient in amount to subject the participant to the alternative minimum tax. Upon the sale of the underlying shares acquired upon the exercise of an ISO (assuming that the sale does not constitute a “disqualifying disposition” as described below), any amount realized in excess of the exercise price paid for the shares will be taxed to the participant as capital gain and the Company will not be entitled to a deduction. However, if the participant
 
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disposes of the shares acquired on exercise before the later of the second anniversary of the date of grant or 1 year after the receipt of the shares by the participant (a “disqualifying disposition”), the participant generally would include in ordinary income in the year of the disqualifying disposition an amount equal to the excess of the fair market value of the shares at the time of exercise (or, if less, the amount realized on the disposition of the shares) over the exercise price paid for the shares. If ordinary income is recognized due to a disqualifying disposition, the Company would generally be entitled to a deduction in the same amount. Subject to certain exceptions, an ISO generally will not be treated as an ISO if it is exercised more than three months following termination of employment. If an ISO is exercised at a time when it no longer qualifies as an ISO, it will be treated for tax purposes as a nonqualified stock option as discussed above.
Stock Appreciation Rights
Like nonqualified stock options, SARs generally are not taxable to the participant at grant, but will result in taxable ordinary income on the date of exercise equal to the amount paid to the participant (i.e., the excess of the value of the shares on the date of exercise over the base price of the SARs). Similarly, the Company generally will be entitled to a deduction in that same amount when the SARs are exercised.
Restricted Shares
A participant recognizes no taxable income at the time he or she is granted restricted stock, whether as a performance award or otherwise. However, if a participant makes an election under Section 83(b) of the Code to be taxed at grant, (i) the grant will be taxable as ordinary income (and deductible by the Company at that time), and (ii) any future appreciation or depreciation in the value of the shares of stock granted would be taxed as capital gain or loss on a subsequent sale of the shares. If the participant does not make a Section 83(b) election, the grant will be taxable as ordinary income when the restrictions under the grant lapse and the Company generally will be entitled to a deduction at that time. The amount subject to taxation (and deductible by the Company) is the fair market value of the shares reduced by any amount paid for the shares. To the extent a participant realizes capital gains, as described above, the Company will not be entitled to any deduction for federal income tax purposes.
Restricted Stock Units
In general, no taxable income is realized by a participant upon the grant of RSUs, whether as a performance award or otherwise. The fair market value of any stock paid and/or the cash amount paid under RSUs is taxable to the participant as ordinary income when such stock and/or cash is paid to the participant, even if the RSUs became non-forfeitable (i.e., the restrictions under the RSUs lapse) at an earlier date. Except to the extent a grant agreement provides that dividend equivalents are paid to a participant prior to the time the underlying RSUs are payable (in which case such dividend equivalents are taxable at the time of such payment), any dividend equivalents that accumulate before the RSUs are payable will be paid and taxable when such RSUs become payable. The Company is not entitled to a deduction until the stock or cash is payable and then generally is entitled to a deduction in the same amount, if any, that is taxable to the participant as ordinary income.
Other Awards
With respect to other awards granted under the Restated LTIP, including, DSUs, other share-based awards and other cash-based awards, generally when the participant receives payment with respect to an award the amount of cash and/or the fair market value of any shares or other property received will be taxable ordinary income to the participant, and the Company generally will be entitled to a tax deduction at the same time and in the same amount.
Section 162(m) of the Code
In general, a U.S. federal income tax deduction is allowed to the Company in an amount equal to the ordinary taxable income recognized by a participant with respect to awards granted under the Restated LTIP; provided that such amount constitutes an ordinary and necessary business expense of the Company, that such amount is reasonable and that the Company satisfies any withholding obligations with respect to the participant’s ordinary taxable income. Following the enactment of the TCJA, beginning with the 2018
 
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calendar year, the $1 million annual deduction limitation under Section 162(m) of the Code applies to compensation paid to any individual who serves as a covered employee (generally, the Company’s Chief Executive Officer, Chief Financial Officer or other officer who qualifies as one of its other three most highly compensated executive officers in 2017 or any later calendar year). As a result, compensation paid to such covered employees, whether under the Restated LTIP or otherwise, in excess of $1 million per year will not be deductible by the Company to the extent Section 162(m) of the Code applies to the payment.
Change in Control
The acceleration of the exercisability or the vesting of an award upon the occurrence of a change in control may result in an “excess parachute payment” within the meaning of Section 280G of the Code. A “parachute payment” occurs when an employee receives payments contingent upon a change in control that exceed an amount equal to three times his or her “base amount.” The term “base amount” generally means the average annual compensation paid to such employee during the 5 calendar years preceding calendar year in which the change in control occurs. An “excess parachute payment” is the excess of all parachute payments made to the employee on account of a change in control over the employee’s base amount. If any amount received by an employee is characterized as an excess parachute payment, the employee is subject to a 20% excise tax on the amount of the excess, and the Company is denied a tax deduction with respect to such excess.
Section 409A of the Code
Section 409A of the Code generally provides that any deferred compensation arrangement must satisfy specific requirements, both in operation and in form, regarding (i) the timing of payment, (ii) the advance election of deferrals, and (iii) restrictions on the acceleration of payment. Failure to comply with Section 409A of the Code may result in the early taxation (e.g., taxation at the later of the granting or vesting of an Award) plus interest and the imposition of an additional 20% penalty tax on the participant based on the deferred amounts included in the participant’s taxable income. The Company intends to structure awards under the Restated LTIP in a manner that is designed to be exempt from or comply with Section 409A of the Code.
Registration with the SEC
If this proposal is approved, we intend to file a Registration Statement on Form S-8 relating to the issuance of common shares under the Restated LTIP with the SEC pursuant to the Securities Act of 1933, as amended, as soon as practicable after approval of the Restated LTIP by the stockholders.
The Board recommends a vote “FOR” the approval of the amendment and restatement of the Equity Incentive Plan to increase the number of shares of common stock available for issuance under the plan and to make certain additional changes. Proxies received by the Board will be voted “FOR” ratification unless a contrary vote is specified.
 
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PROPOSAL NO. 4
RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
FOR THE 2021 FISCAL YEAR
The Audit Committee is directly responsible for the appointment, compensation, retention and oversight of the independent registered public accounting firm retained to audit the Company’s consolidated financial statements. To execute this responsibility, the Audit Committee engages in a thorough annual evaluation of (i) the independent registered public accounting firm’s qualifications, performance and independence, (ii) whether the independent registered public accounting firm should be rotated, and (iii) the advisability and potential impact of selecting a different independent registered public accounting firm.
On March 9, 2021, the Audit Committee dismissed KPMG LLP as the Company’s independent registered public accounting firm. On March 11, 2021, the Audit Committee appointed Ernst & Young LLP, an independent registered public accounting firm, to audit the consolidated financial statements of the Company and its subsidiaries for the fiscal year ending December 31, 2021.
KPMG LLP’s audit reports on the consolidated financial statements of the Company and its subsidiaries as of and for the fiscal years ended December 31, 2019 and 2020 did not contain an adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles, except that KPMG LLP’s report on the consolidated financial statements of the Company and its subsidiaries as of and for the fiscal years ended December 31, 2019 and 2020, contained the below separate paragraphs:

“As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for Revenue from Contracts with Customers as of January 1, 2018 due to the adoption of Topic 606.”

“As discussed in Note 2 to the consolidated financial statements, the Company has changed its method of accounting for Leases as of January 1, 2019 due to the adoption of Topic 842.”
During the fiscal years ended December 31, 2019 and 2020, and through March 9, 2021, there were no (i) disagreements (as defined in Item 304(a)(1)(iv) of Regulation S-K) between the Company and KPMG LLP on any matter of accounting principle or practice, financial statement disclosure, or auditing scope or procedure which, if not resolved to KPMG LLP’s satisfaction, would have caused it to make reference to the matter in conjunction with its report on the Company’s consolidated financial statements for the relevant year, or (ii) reportable events as defined in Item 304(a)(1)(v) of Regulation S-K.
During the fiscal years ended December 31, 2019 and 2020, and through March 11, 2021, neither the Company, nor anyone on behalf of the Company, consulted with Ernst & Young LLP with respect to either (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the consolidated financial statements of the Company and its subsidiaries, and no written report or oral advice was provided by Ernst & Young LLP to the Company that Ernst & Young LLP concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue or (ii) any matter that was the subject of either a disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K) or a reportable event (as described in Item 304(a)(1)(v) of Regulation S-K).
In accordance with SEC rules and Ernst & Young LLP policies, audit partners are subject to rotation requirements to limit the number of consecutive years an individual partner may provide audit services to the Company. For lead and concurring review audit partners, the maximum number of consecutive years of service in that capacity is five years. The Audit Committee is involved in the selection of Ernst & Young LLP’s lead audit partner.
The Audit Committee and the Board believe that the appointment of Ernst & Young LLP to serve as the Company’s independent registered public accounting firm for the 2021 fiscal year is in the best interests of the Company and its stockholders. If the stockholders do not ratify the appointment of Ernst & Young LLP, the Audit Committee will reconsider its selection. Representatives of KPMG LLP and Ernst &
 
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Young LLP are expected to attend the Annual Meeting where they will be available to respond to questions and, if they desire, to make a statement.
The Board recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP as the Company’s lead independent registered public accounting firm for the 2021 fiscal year. Proxies received by the Board will be voted “FOR” ratification unless a contrary vote is specified.
 
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EXECUTIVE OFFICERS
Our executive officers are elected by the Board annually to hold office until their successors are elected and qualified. The biographical information for each of the executive officers is provided below.
Christopher S. Sotos
Age 49
President and Chief Executive Officer
For biographical information for Christopher S. Sotos, see “Proposal No. 1 — Nominees for Director.”
Chad Plotkin
Age 45
Senior Vice President and Chief Financial Officer
Mr. Plotkin has served as our Senior Vice President and Chief Financial Officer since November 2016. From January 2016 until his appointment as Senior Vice President and Chief Financial Officer, Mr. Plotkin served as Senior Vice President, Finance and Strategy. Prior to this, he served in varying capacities at NRG, including as Vice President of Investor Relations of both the Company and NRG from September 2015 to January 2016 and from January 2012 to February 2015 and Vice President of Finance of NRG from February 2015 to September 2015. From October 2007 to January 2012, Mr. Plotkin served in various capacities in the Strategy and Mergers and Acquisitions group of NRG, including as Vice President, beginning in December 2010.
Kevin P. Malcarney
Age 54
Senior Vice President, General Counsel and Corporate Secretary
Mr. Malcarney has served as Senior Vice President, General Counsel and Corporate Secretary since May 11, 2018. He served as Interim General Counsel of the Company from March 16, 2018. Mr. Malcarney was previously Vice President and Deputy General Counsel and served in various other roles at NRG since September 2008. Prior to that, Mr. Malcarney worked at two major law firms in Princeton, New Jersey and Philadelphia, Pennsylvania, and handled mergers and acquisitions, project financing and general corporate matters.
 
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STOCK OWNERSHIP OF DIRECTORS, NAMED EXECUTIVE OFFICERS AND
CERTAIN BENEFICIAL OWNERS
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information concerning beneficial ownership of the Company’s Class A and Class C common stock and combined voting power of Class A, Class B, Class C and Class D common stock for: (a) each director and the nominees for director; (b) each NEO; and (c) the directors and all executive officers as a group. The percentage of beneficial ownership is based on 34,599,645 shares of Class A common stock outstanding as of March 4, 2021 and 81,636,042 shares of Class C common stock outstanding as of March 4, 2021, and percentage of combined voting power is based on 78,582,143 votes represented by our outstanding Class A, Class B, Class C and Class D common stock in the aggregate as of March 4, 2021. The percentage of beneficial ownership and the percentage of combined voting power also include any shares that such person has the right to acquire within 60 days of March 4, 2021. Unless otherwise indicated, each person has sole voting and dispositive power with respect to the shares set forth in the following table. See “Securities Authorized for Issuance under the LTIP as of March 4, 2021” under Proposal No. 3 for more detailed information regarding the outstanding equity awards and shares available for future awards under the LTIP as of March 4, 2021.
The address of the beneficial owners is Clearway Energy, Inc., 300 Carnegie Center, Suite 300, Princeton, New Jersey 08540.
Class A Common Stock
Class C Common Stock
Common Stock
Directors and Executive Officers
Number(1)
% of Class A
Common Stock
Number(1)
% of Class C
Common Stock
% of
Combined
Voting Power(2)
Jonathan Bram
Christopher S. Sotos
25,100(3) * 176,535(3) * *
Chad Plotkin
6,697(4) * 43,845(4) * *
Kevin P. Malcarney
600(5) * 33,246(5) * *
Mary-Lee Stillwell
7,882 * *
Nathaniel Anschuetz
Brian R. Ford
7,644(6) * 46,850(6) * *
Bruce MacLennan
Ferrell P. McClean
16,288(7) * 86,570(7) * *
Daniel B. More
25,252(8) *
E. Stanley O’Neal
24,014(9) * *
Scott Stanley
All directors and executive officers
as agroup (12 people)
56,329(10) * 444,194(10) * *
*
Less than one percent of outstanding Class A common stock, Class C common stock or combined voting power, as applicable.
(1)
The number of shares beneficially owned by each person or entity is determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, each person or entity is considered the beneficial owner of any: (a) shares to which such person or entity has sole or shared voting power or dispositive power and (b) shares that such person or entity has the right to acquire within 60 days.
(2)
Represents the voting power of all of the classes of our common stock together as a single class. Each holder of Class A or Class B common stock is entitled to one vote for each share held. Each holder of Class C or Class D common stock is entitled to 1/100th of one vote for each share held. Holders of
 
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shares of our Class A, Class B, Class C and Class D common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise provided by applicable law.
(3)
Includes 10,686 dividend equivalent rights (DERs) to be paid in Class C common stock. Excludes 37,805 restricted stock units (RSUs) and 111,463 relative performance stock units (RPSUs). Each RSU represents the right to receive one share of Class C common stock upon vesting. Each RPSU represents the potential to receive Class C common stock based upon the Company achieving a certain level of total shareholder return relative to the Company’s peer group over a three-year performance period. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a RSU or RPSU award (if such share were outstanding rather than being subject to the applicable award).
(4)
Includes 3,260 DERs to be paid in Class C common stock. Excludes 11,295 RSUs and 33,725 RPSUs. Each RSU represents the right to receive one share of Class C common stock upon vesting. Each RPSU represents the potential to receive Class C common stock based upon the Company achieving a certain level of total shareholder return relative to the Company’s peer group over a three-year performance period. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a RSU or RPSU award (if such share were outstanding rather than being subject to the applicable award).
(5)
Includes 2,077 DERs to be paid in Class C common stock. Excludes 7,264 RSUs and 21,565 RPSUs. Each RSU represents the right to receive one share of Class C common stock upon vesting. Each RPSU represents the potential to receive Class C common stock based upon the Company achieving a certain level of total shareholder return relative to the Company’s peer group over a three-year performance period. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a RSU or RPSU award (if such share were outstanding rather than being subject to the applicable award).
(6)
Includes 4,547 DSUs and 2,097 outstanding DERs to be paid in Class A common stock and 37,703 DSUs and 8,147 DERs to be paid in Class C common stock, each payable in the event the director ceases to be a member of the Board. Each DSU represents the right of a participant to be paid one share of Class A common stock or Class C common stock, as applicable, at the end of a deferral period established under the award elected by the participant under the terms of an award and the tax rules applicable to nonqualified deferred compensation plans under Section 409A of the Code. DERs become vested proportionately with the DSUs to which they relate. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a DSU award (if such share were outstanding rather than being subject to the DSU award).
(7)
Includes 9,093 DSUs and 4,195 outstanding DERs to be paid in Class A common stock and 48,868 DSUs and 8,750 DERs to be paid in Class C common stock, each payable in the event the director ceases to be a member of the Board. Each DSU represents the right of a participant to be paid one share of Class A common stock or Class C common stock, as applicable, at the end of a deferral period established under the award elected by the participant under the terms of an award and the tax rules applicable to nonqualified deferred compensation plans under Section 409A of the Code. DERs become vested proportionately with the DSUs to which they relate. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a DSU award (if such share were outstanding rather than being subject to the DSU award).
(8)
Includes 23,500 DSUs and 1,752 DERs to be paid in Class C common stock, payable in the event the director ceases to be a member of the Board. Each DSU represents the right of a participant to be paid one share of Class C common stock, as applicable, at the end of a deferral period established under the award elected by the participant under the terms of an award and the tax rules applicable to nonqualified deferred compensation plans under Section 409A of the Code. DERs become vested proportionately with the DSUs to which they relate. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a DSU award (if such share were outstanding rather than being subject to the DSU award).
(9)
Includes 20,280 DSUs and 1,456 DERs to be paid in Class C common stock, payable in the event the director ceases to be a member of the Board. Each DSU represents the right of a participant to be paid one share of Class C common stock, as applicable, at the end of a deferral period established under
 
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the award elected by the participant under the terms of an award and the tax rules applicable to nonqualified deferred compensation plans under Section 409A of the Code. DERs become vested proportionately with the DSUs to which they relate. Each DER represents the right to receive the dividends and distributions that would have otherwise been paid with respect to a share subject to a DSU award (if such share were outstanding rather than being subject to the DSU award).
(10)
Consists of the total holdings of directors and all executive officers as a group.
STOCK OWNERSHIP OF PRINCIPAL STOCKHOLDERS
The following table sets forth information for each person known to the Company to own more than five percent of any class of the Company’s common stock. The information provided is as of the date of their most recent Schedule 13G or Schedule 13D filing with the SEC. For our stockholders other than the GIP Entities (as defined below), percentage of beneficial ownership is based on 34,599,645 shares of Class A common stock outstanding as of March 4, 2021 and 81,636,042 shares of Class C common stock outstanding as of March 4, 2021, and percentage of combined voting power is based on 78,582,143 votes represented by our outstanding Class A, Class B, Class C and Class D common stock in the aggregate as of March 4, 2021. For the GIP Entities (as defined below), who are the sole beneficial owners of our Class B and Class D common stock, percentage of beneficial ownership is based on 34,599,645 shares of Class A common stock outstanding as of March 4, 2021 and 81,636,042 shares of Class C common stock outstanding as of March 4, 2021, plus any shares exchangeable into Class A or Class C common stock within 60 days of March 4, 2021, and percentage of combined voting power is based on 78,582,143 votes represented by our outstanding Class A, Class B, Class C and Class D common stock in the aggregate as of March 4, 2021. Unless otherwise indicated, each person has sole voting and dispositive power with respect the shares set forth in the following table. For further information regarding material transactions between us and other related persons, see “Certain Relationships and Related Person Transactions.”
 
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Class A Common Stock
Class C Common Stock
Common Stock
Name of Beneficial Owner
Number(1)
% of Class A
Common Stock
Number(1)
% of Class C
Common Stock
% of Combined
Voting Power(2)
GIP Entities
42,738,750(3) 55.3% 42,738,750(3) 36.8% 54.93%(4)
1345 Avenue of the Americas,
30th Floor New York,
New York 10105
The Bank of New York Mellon Corporation
6,267,448(5) 7.68% *
240 Greenwich Street
New York, New York 10286
The Vanguard Group
3,593,074(6) 10.38% 7,701,903(6) 9.44% 4.67%
100 Vanguard Boulevard
Malvern, Pennsylvania, 19355
BlackRock, Inc.
2,548,818(7) 7.4% 5,776,656(7) 7.1% 3.32%
55 East 52nd Street
New York, New York 10055
FMR LLC
7,999,079(8) 9.8% *
245 Summer Street
Boston, Massachusetts 02210
Franklin Resources, Inc.
4,455,205(9) 5.5% *
Level 13, 35 Clarence Street
Sydney, C3 2000
Morgan Stanley
1,828,361 (10) 5.3% 2.33%
1585 Broadway
New York, New York 10036
Apollo Management Holdings GP,
LLC.
2,320,721 (11) 6.7% 1,372,435 (11) 1.7% 2.97%
9 W. 57th Street, 43rd Floor
New York, New York 10019
Renaissance Technologies Holdings Corporation
1,876,229 (12) 5.42% 2.39%
800 Third Avenue
New York, New York 10022
*
Less than one percent of outstanding Class A common stock, Class C common stock or combined voting power, as applicable.
(1)
The number of shares beneficially owned by each person or entity is determined under the rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, each person or entity is considered the beneficial owner of any: (a) shares to which such person or entity has sole or shared voting power or dispositive power and (b) shares that such person or entity has the right to acquire within 60 days.
(2)
Represents the voting power of all of the classes of our common stock voting together as a single class. Each holder of Class A or Class B common stock is entitled to one vote for each share held. Each holder of Class C or Class D common stock is entitled to 1/100th of one vote for each share held. Holders of shares of our Class A, Class B, Class C and Class D common stock vote together as a single class on all matters presented to our stockholders for their vote or approval, except as otherwise provided by applicable law.
 
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(3)
Based upon information set forth in the Schedule 13D filed on September 10, 2018 by Global Infrastructure Investors III, LLC, Global Infrastructure GP III, L.P., GIP III Zephyr Acquisition Partners, L.P., and Clearway Energy Group LLC (collectively, the “GIP Entities”). The GIP Entities have shared voting power and shared dispositive power over 42,738,750 Class A shares and 42,738,750 Class C shares. Consists entirely of Class B units and Class D units of Clearway Energy LLC. The Class B units of Clearway Energy LLC are exchangeable for shares of our Class A common stock at any time and the Class D units are exchangeable for shares of our Class C common stock at any time. As a result, the GIP Entities may be deemed to beneficially own the shares of Class A common stock or Class C common stock for which such Class B units or Class D units of Clearway Energy LLC, as applicable, are exchangeable. GIP Entities may exchange Class B units of Clearway Energy LLC for shares of our Class A common stock and Class D units of Clearway Energy LLC for shares of our Class C common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications in accordance with the terms of the Amended and Restated Exchange Agreement, dated May 14, 2015, between us and NRG, for which the rights and obligations thereunder were assigned to GIP on August 31, 2018 in connection with the closing of the GIP Transaction; provided, however, upon any exchange of Class B units of Clearway Energy LLC for shares of our Class A common stock or Class D units of Clearway Energy LLC for shares of our Class C common stock, a corresponding number of shares of Class B common stock or Class D common stock, as applicable, are extinguished. For additional information, see “Certain Relationships and Related Person Transactions — Fourth Amended and Restated Limited Liability Company Agreement of Clearway Energy LLC” and “Certain Relationships and Related Person Transactions — Exchange Agreement.”
(4)
GIP Entities hold 42,738,750 shares of our Class B common stock and 42,738,750 shares of our Class D common stock. Each holder of Class B common stock is entitled to one vote per share of Class B common stock. Each holder of our Class D common stock is entitled 1/100th of one vote per share of Class D common stock.
(5)
Based upon information set forth in the Schedule 13G/A filed on February 1, 2021 by The Bank of New York Mellon Corporation, BNY Mellon IHC, LLC, MBC Investments Corporation and Mellon Investments Corporation. The Bank of New York Mellon Corporation has sole voting power over 6,028,241 Class C shares, shared voting power over 2,760 Class C shares, sole dispositive power over 6,124,483 Class C shares and shared dispositive power over 142,889 Class C shares. BNY Mellon IHC, LLC has sole voting power over 5,435,432 Class C shares, sole dispositive power over 5,535,285 Class C shares and shared dispositive power over 135,394 Class C shares. MBC Investments Corporation has sole voting power over 5,435,432 Class C shares, sole dispositive power over 5,535,285 Class C shares and shared dispositive power over 135,394 Class C shares. Mellon Investments Corporation has sole voting power over 4,316,347 Class C shares, sole dispositive power over 4,416,200 Class C shares and shared dispositive power over 135,394 Class C shares.
(6)
Based upon information set forth in the Schedules 13G/A filed on February 10, 2021 by The Vanguard Group (“Vanguard”). With respect to the Class A shares, Vanguard has shared voting power over 53,477 Class A Shares, sole dispositive power over 3,514,501 Class A shares, and shared dispositive power over 78,573 Class A shares. With respect to the Class C shares, Vanguard has shared voting power over 89,383 Class C shares, sole dispositive power over 7,545,386 Class C shares and shared dispositive power over 156,517 Class C shares.
(7)
Based upon information set forth in the Schedules 13G/A filed on January 29, 2021 by BlackRock, Inc. (“BlackRock”). With respect to the Class A shares, BlackRock has sole voting power over 2,466,690 Class A shares and sole dispositive power over 2,548,818 Class A shares. With respect to the Class C shares, BlackRock has sole voting power over 5,636,685 Class C shares and sole dispositive power over 5,776,656 Class C shares.
(8)
Based upon information set forth in the Schedule 13G/A filed on February 8, 2021 by FMR LLC (“FMR”). FMR has sole voting power over 1,327,535 Class C shares and sole dispositive power over 7,999,079 Class C shares. Abigail P. Johnson is a Director, the Chairman and the Chief Executive Officer of FMR. Members of the Johnson family, including Abigail P. Johnson, are the predominant owners, directly or through trusts, of Series B voting common shares of FMR, representing 49% of the voting power of FMR. The Johnson family group and all other Series B shareholders have entered into a shareholders’ voting agreement under which all Series B voting common shares will be voted in
 
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accordance with the majority vote of Series B voting common shares. Accordingly, through their ownership of voting common shares and the execution of the shareholders’ voting agreement, members of the Johnson family may be deemed, under the Investment Company Act of 1940, to form a controlling group with respect to FMR. Neither FMR nor Abigail P. Johnson has the sole power to vote or direct the voting of the shares owned directly by the various investment companies registered under the Investment Company Act of 1940 (“Fidelity Funds”) advised by Fidelity Management & Research Company, a wholly owned subsidiary of FMR, which power resides with the Fidelity Funds’ Boards of Trustees. Fidelity Management & Research Company carries out the voting of the shares under written guidelines established by the Fidelity Funds’ Boards of Trustees.
(9)
Based upon information set forth in the Schedule 13G filed on February 11, 2021 by Franklin Resources, Inc. Franklin Resources, Inc. has sole voting power over 4,455,205 Class C shares and sole dispositive power over 4,455,205 Class C shares.
(10)
Based upon information set forth in the Schedule 13G filed on February 17, 2015 by Morgan Stanley. Morgan Stanley has sole voting power over 1,492,155 Class A shares. Morgan Stanley has shared voting power over 231,384 Class A shares and shared dispositive power over 1,596,978 Class A shares. The shares being reported on by Morgan Stanley as a parent holding company are owned, or may be deemed to be beneficially owned, by Morgan Stanley Smith Barney LLC, a wholly-owned subsidiary of Morgan Stanley and a broker dealer registered under Section 15 of the Exchange Act.
(11)
Based upon information set forth in the Schedule 13G/A filed on February 12, 2021 by Apollo Management Holdings GP, LLC. Apollo Management Holdings GP, LLC has shared voting power over 2,320,721 Class A shares and shared dispositive power over 2,320,721 Class A shares. With respect to Class C shares, Apollo Management Holdings GP, LLC has shared voting power over 1,372,435 Class C shares and shared dispositive power over 1,372,435 Class C shares.
(12)
Based upon information set forth in the Schedule 13G filed on February 11, 2021 by Renaissance Technologies LLC and Renaissance Technologies Holdings Corporation (collectively, “Renaissance”). Renaissance has sole voting power over 1,829,729 Class A shares and sole dispositive power over 1,876,229 Class A shares.
 
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CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS
RELATIONSHIP WITH GIP
GIP, through its ownership of CEG, indirectly owns all of our outstanding Class B common stock and our Class D common stock, which represents, in the aggregate, 54.93% of the voting interest in our stock and receives distributions from Clearway Energy LLC through its ownership of Class B and Class D units of Clearway Energy LLC. Holders of our Class A common stock and Class C common stock hold, in the aggregate, the remaining 45.06% of the voting interest in our stock. Each holder of Class A or Class B common stock is entitled to one vote for each share held. Each holder of Class C or Class D common stock is entitled to 1/100th of one vote for each share held. The holders of our outstanding shares of Class A and Class C common stock are entitled to dividends as declared.
 
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The diagram below depicts our organizational structure as of March 4, 2021. Clearway Energy LLC indirectly holds the equity interests in our project companies.
[MISSING IMAGE: tm212528d1-fc_diagrambw.jpg]
 
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STRATEGIC SPONSORSHIP WITH GIP AND CEG
CEG Master Services Agreements
The Company, along with Clearway Energy LLC and Clearway Energy Operating LLC, entered into Master Services Agreements with CEG (the “CEG Master Services Agreements”), pursuant to which CEG and certain of its affiliates or third-party service providers provide certain services, including operational and administrative services, which include human resources, information systems, external affairs, accounting, procurement, and risk management services, to the Company and certain of its subsidiaries, and the Company and certain of its subsidiaries provide certain services, including accounting, internal audit, tax and treasury services, to CEG, in exchange for the payment of fees in respect of such services. For the year ended December 31, 2020, the Company paid approximately $2,493,000 under the CEG Master Services Agreements. In addition, certain Thermal and Conventional segments projects reimbursed CEG approximately $2,753,000 during the year ended December 31, 2020 for costs incurred by CEG on behalf of such entities.
RIGHT OF FIRST OFFER AGREEMENTS
CEG ROFO Agreement
On August 31, 2018, we entered into a ROFO Agreement with CEG (the “CEG ROFO Agreement”) and, solely for certain purposes thereof, GIP, pursuant to which CEG granted us and our subsidiaries a right of first offer on any proposed sale or transfer of certain assets owned by CEG. On August 1, 2019, the CEG ROFO Agreement was amended to grant us and our affiliates a right of first offer on any proposed sale, transfer or other disposition of certain assets of CEG (the “CEG ROFO Assets”) until August 31, 2023, as listed in the table below. CEG is not obligated to sell the remaining CEG ROFO Assets to us and, if offered by CEG, we cannot be sure whether these assets will be offered on acceptable terms or that we will choose to consummate such acquisitions.
The assets listed below represent our currently committed investments in projects with CEG, as well as the assets subject to our ROFO Agreement with CEG:
Committed Investments and CEG ROFO Assets
Asset
Technology
Gross Capacity
(MW)
State
COD
Status
Pinnacle Repowering
Wind 55 WV 2021
Committed
Mesquite Sky(a)
Wind 345 TX 2021
Committed
Black Rock(a)
Wind 110 WV 2021
Committed
Mililani I(a)
Solar 39 HI 2022
Committed
Waiawa(a) Solar 36 HI 2022
Committed
Daggett(a) Solar 482 CA 2022
Committed
Wildflower
Solar 100 MS 2022
ROFO
(a)
Projects included in a co-investment partnership with Hannon Armstrong Sustainable Infrastructure Capital, Inc.
Prior to engaging in any negotiation regarding any disposition, sale or other transfer of any of the remaining CEG ROFO Assets, CEG will deliver a written notice to us setting forth the material terms and conditions of the proposed transaction. During the 30-day period after the delivery of such notice, we will negotiate with CEG in good faith to reach an agreement on the transaction. If we do not reach an agreement within such 30-day period, CEG will be able within the next 180 calendar days to sell, transfer, dispose or recontract such CEG ROFO Asset to a third party (or to agree in writing to undertake such transaction with a third party) on terms generally no less favorable to CEG than those offered pursuant to the written notice.
 
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Under the CEG ROFO Agreement, CEG is not obligated to sell the remaining CEG ROFO Assets. In addition, any offer to sell under the CEG ROFO Agreement will be subject to an inherent conflict of interest because the same professionals within CEG’s organization that are involved in acquisitions that are suitable for us have responsibilities within CEG’s broader asset management business. Notwithstanding the significance of the services to be rendered by CEG or their designated affiliates on our behalf or of the assets which we may elect to acquire from CEG in accordance with the terms of the CEG ROFO Agreement or otherwise, CEG does not owe fiduciary duties to us or our stockholders. Any material transaction with CEG (including the proposed acquisition of any CEG ROFO Asset) will be subject to our related person transaction policy, which will require prior approval of such transaction by our Corporate Governance, Conflicts and Nominating Committee.
The Company and CEG work collaboratively in considering new assets to be added under the CEG ROFO Agreement or to be acquired by the Company outside of the CEG ROFO Agreement.
Drop Drown Transactions
On January 12, 2021, we acquired 100% of CEG’s equity interest and a third party investor’s minority interest in Rattlesnake Flat, LLC, which owns the Rattlesnake Wind Project, a 144 MW wind facility located in Adams County, WA for $132 million in cash consideration.
On December 21, 2020, subsidiaries of the Company entered into the Lighthouse Partnership Agreements providing for the Company’s co-investment in a 1,204 MW portfolio of renewable energy projects developed by CEG. In addition, the agreements included an amendment of the partnership that owns the 419 MW Mesquite Star wind project, providing the Company with additional project cash flows after the first half of 2021. As described below, the Company had previously acquired an interest in Mesquite Star Pledgor LLC, which was subsequently renamed Lighthouse Renewable Holdco LLC. The 1,204 MW portfolio of renewable energy projects includes:

five geographically diversified wind, solar and solar plus storage assets under development totaling 1,012 MW, and

the 192 MW Rosamond Central solar project, located in Kern County, California. The Company acquired 100% of the Class A membership interests of Rosie TargetCo LLC, which consolidates its interest in a tax equity fund that owns the project, for approximately $24 million in cash consideration. Rosie TargetCo LLC is a partnership, whose Class B membership interests are owned by a third party investor. The Company is entitled to a 50% cash equity interest in Rosamond Central through its Class A membership interests.
For the above-mentioned transactions, we expect to invest an estimated $214 million in corporate capital by the end of 2022, inclusive of the $24 million invested in Rosamond Central, subject to closing adjustments and the projects achieving certain milestones.
On November 20, 2020, we acquired from Clearway Renew LLC, a subsidiary of CEG, and a third party investor, 100% of the cash equity interests in Langford Holding LLC, which owns the Langford wind project, for total cash consideration of approximately $64 million. The Langford wind project is a 160 MW wind project located in West Texas which was repowered and achieved commercial operations in November 2020.
On November 2, 2020, we acquired from CEG (i) the Class B membership interests in the DGPV Holdco Entities and (ii) an SREC Contract for an aggregate of $44 million in cash consideration.
On November 2, 2020, the CEG ROFO Agreement was amended to (i) add the assets comprising the cash equity partnership offer from CEG to the pipeline under the CEG ROFO Agreement, (ii) memorialize as a CEG ROFO Asset the contract related to the monetization of renewable energy credits associated with assets within the DGPV Holdco Entities, which was acquired at the same time; and (iii) extend the third-party negotiation periods for CEG’s residual interest in Kawailoa and Oahu assets as well as the assets comprising the cash equity partnership offer from CEG to November 2, 2021.
On September 1, 2020, we, through our indirect subsidiary Mesquite Star HoldCo LLC, acquired the Class A membership interests in Mesquite Star Pledgor LLC from Clearway Renew LLC, a subsidiary of
 
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CEG, for $74 million in cash consideration. Mesquite Star Pledgor LLC is the primary beneficiary and consolidates its interest in a tax equity fund that owns the Mesquite Star wind project, a 419 MW utility scale wind project located in Fisher County, Texas. A majority of the project’s output is backed by contracts with investment grade counterparties with a 12 year weighted average contract life. Mesquite Star Pledgor LLC was renamed Lighthouse Renewable Holdco LLC and the Class B membership interests were sold to a third party investor.
On April 17, 2020, we entered into binding agreements related to the previously announced drop down offer from CEG to enable us to acquire and invest in a portfolio of renewable energy projects. The following projects are included in the drop down:

CEG’s interest in Repowering Partnership II LLC (Repowering 1.0), which we acquired on May 11, 2020 for cash consideration of $70 million,

100% of the equity interests in Rattlesnake Flat, LLC, which owns the Rattlesnake Wind Project, a 160 net MW wind facility located in Adams County, WA, which we acquired on January 12, 2021 as mentioned above, and

On February 26, 2021, we, through an indirect subsidiary, entered into an amended partnership agreement with CEG to repower the Pinnacle Wind Project, a 55 net MW wind facility located in Mineral County, WV. The amended agreement commits us to invest an estimated $67 million in net corporate capital, subject to closing adjustments, and no longer requires an additional payment in 2031. The existing Pinnacle Wind power purchase agreements will continue to run through 2031. Commercial operations and corporate capital funding for the Pinnacle Wind Repowering Partnership are expected to occur in the second half of 2021.
For the above mentioned transactions, the agreements commit us to invest an estimated $256 million in net corporate capital, subject to closing adjustments.
PARTNERSHIPS WITH CEG
DGPV Holdco Consolidation
On November 2, 2020, the Company acquired the Class B membership interests in DGPV Holdco 1, DGPV Holdco 2 and DGPV Holdco 3 (the “DGPV Holdco Entities”) from Renew DG Holdings LLC, a subsidiary of CEG, and a Solar Renewable Energy Credit (“SREC”) contract for $44 million in cash consideration. Subsequent to the acquisition of the remaining interests in the DGPV Holdco Entities, the Company transferred its interests to DG-CS Master Borrower LLC, and issued debt that was utilized to repay existing project-level debt outstanding and unwind interest rate swaps for certain of the tax equity arrangements related to the underlying project funds. Effective with the acquisition of the Class B membership interests of the DGPV Holdco Entities, the Company consolidates all of the DGPV Holdco Entities, including DG-CS Master Borrower LLC, and its subsidiaries, which consist of seven tax equity funds that collectively own approximately 172 distributed solar projects with a combined 286 MW of capacity.
RPV Holdco 1 LLC
On May 14, 2020, the Company sold its interests in RPV Holdco 1 LLC to a third party for net proceeds of approximately $75 million.
Repowering Partnership
On August 30, 2018, Wind TE Holdco, an indirect subsidiary of the Company, formed a partnership with Clearway Renew LLC, an indirect subsidiary of CEG, in order to facilitate the repowering of wind facilities of two of its indirect subsidiaries, Elbow Creek Wind Project LLC, or Elbow Creek, and Wildorado Wind LLC, or Wildorado Wind. Wind TE Holdco contributed its interests in the two facilities and Clearway Renew LLC contributed a turbine supply agreement, including title to certain components that qualify for production tax credits.
On June 14, 2019, Repowering Partnership LLC was replaced with Repowering Partnership II LLC as the owner of the Elbow Creek and Wildorado Wind projects, as well as Repowering Partnership Holdco
 
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LLC. We invested $101.6 million in net corporate capital to fund the repowering of the wind facilities during the fourth quarter of 2019 and the first quarter of 2020. These assets have reached Repowering COD.
Kawailoa Solar Partnership
On May 1, 2019, the Company entered into a partnership with Clearway Renew LLC, a subsidiary of CEG, to own, finance, operate and maintain the Kawailoa Solar Partnership, which consists of the Kawailoa Solar Project, a 49 MW utility-scale solar generation project located in Oahu, Hawaii. The Company contributed $9 million into the partnership during the year ended December 31, 2019.
Oahu Solar Partnership
On March 8, 2019, the Company entered into a partnership with Clearway Renew LLC, a subsidiary of CEG, to own, finance, operate and maintain the Oahu Solar projects, which consist of Lanikuhana and Waipio, 15 MW and 46 MW utility-scale solar generation projects, respectively, located in Oahu, Hawaii, which both reached COD in September 2019 and began to sell power to HECO pursuant to the long-term power purchase agreements. The Company contributed $20 million into the partnership during the year ended December 31, 2019.
OPERATIONS AND MAINTENANCE AGREEMENTS
CEG provides operations and maintenance (“O&M”) and day-to-day operational support to our utility scale solar and wind facilities in accordance with O&M agreements with us. Each of the counterparties to the O&M agreements is an affiliate of CEG. The O&M agreements for which the amount paid to CEG exceeded $120,000 during fiscal year 2020 are described in the table below. Under these O&M agreements, we generally pay an annual or monthly fee, which may be subject to annual adjustment, plus any reimbursable expenses.
Project
Agreement Description
Approximate
Amount
Paid to
CEG
Solar
Avenal
O&M Agreement, dated January 31, 2011 $ 517,000
Borrego
O&M Agreement, dated August 1, 2012 $ 430,000
Buckthorn Solar
O&M Agreement, dated May 22, 2017 $ 2,964,000
Chestnut Fund LLC
O&M Agreement, dated February 9, 2018 $ 839,000
Clearway & EFS Distributed Solar LLC
O&M Agreement, dated October 28, 2016 $ 209,000
CVSR
O&M Agreement, dated September 30, 2011
$ 4,485,000
DGPV Fund 2 LLC
O&M Agreement dated, September 4, 2015
$ 247,000
DGPV Fund 4 LLC
O&M Agreement dated, June 16, 2017 $ 1,019,000
Golden Puma Fund LLC
O&M Agreement dated, March 30, 2017 $ 883,000
Kansas South
O&M Agreement, dated June 13, 2017 $ 967,000
Kawailoa Solar LLC
O&M Agreement, dated December 14, 2017
$ 147,000
Lanikuhana Solar LLC
O&M Agreement, dated December 28, 2017
$ 312,000
Solar Blythe
O&M Agreement, dated November 1, 2017
$ 368,000
Solar Community 1 LLC
O&M Agreement, dated February 9, 2018 $ 247,000
SPP Fund II
O&M Agreement, dated October 31, 2017 $ 515,000
SPP Fund III
O&M Agreement, dated October 31, 2017 $ 263,000
TA High Desert
O&M Agreement, dated June 9, 2017 $ 474,000
Waipio PV LLC
O&M Agreement, dated December 28, 2017
$ 591,000
 
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Project
Agreement Description
Approximate
Amount
Paid to
CEG
Wind
Alta Wind X
O&M Agreement, dated December 12, 2016
$ 1,955,000
Alta Wind XI
O&M Agreement, dated December 12, 2016
$ 1,625,000
Alta Wind I
O&M Agreement, dated December 12, 2016
$ 1,480,000
Alta Wind II
O&M Agreement, dated December 12, 2016
$ 378,000
Alta Wind III
O&M Agreement, dated December 12, 2016
$ 383,000
Alta Wind IV
O&M Agreement, dated December 12, 2016
$ 307,000
Alta Wind V
O&M Agreement, dated December 12, 2016
$ 453,000
Buffalo Bear
O&M Agreement, dated May 1, 2016 $ 277,000
Crosswinds
O&M Agreement, dated May 1, 2016 $ 639,000
Elbow Creek
O&M Agreement, dated October 31, 2018 $ 1,846,000
Elkhorn Ridge
O&M Agreement, dated May 9, 2008 $ 495,000
Forward
O&M Agreement, dated October 20, 2016 $ 493,000
Goat Wind
O&M Agreement, dated February 18, 2008
$ 2,192,000
Hardin
O&M Agreement, dated May 1, 2016 $ 373,000
Laredo Ridge
O&M Agreement, dated December 24, 2015
$ 1,883,000
Lookout
O&M Agreement, dated February 11, 2008
$ 824,000
Mesquite Star Special LLC
O&M Agreement, dated May 7, 2019 $ 978,000
Odin
O&M Agreement, dated September 16, 2016
$ 548,000
Pinnacle
O&M Agreement, dated December 1, 2016 $ 1,252,000
San Juan Mesa
O&M Agreement, dated December 27, 2005
$ 2,277,000
Sleeping Bear
O&M Agreement, dated May 1, 2016 $ 1,369,000
Spanish Fork
O&M Agreement, dated September 16, 2016
$ 414,000
South Trent
Management O&M Agreement, dated October 1, 2015
$ 1,303,000
Taloga
O&M Agreement, dated July 1, 2016 $ 2,749,000
Wildorado
O&M Agreement, dated February 11, 2008
$ 2,620,000
ASSET MANAGEMENT AND ADMINISTRATIVE SERVICES AGREEMENTS
CEG provides day-to-day administrative support to certain of our project-level entities in accordance with asset management and administrative services agreements (the “ASAs”). The ASAs for which the amount involved exceeded $120,000 during fiscal year 2020 are described in the table below. Under these agreements, we generally pay an annual or monthly fee, which may be subject to annual adjustment, plus any reimbursable expenses.
Project
Agreement Description
Approximate
Amount
Paid to
CEG
Solar
Alpine
Asset Management Agreement, dated March 15, 2012 $ 146,000
Buckthorn Solar
Asset Management Agreement, dated May 22, 2017 $ 240,000
Chestnut Fund LLC
Asset Management Agreement, dated July 31, 2017 $ 202,000
CS4 Fund LLC
Asset Management Agreement, dated November 29, 2018 $ 175,000
 
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Project
Agreement Description
Approximate
Amount
Paid to
CEG
CVSR Holdco
Asset Management Agreement, dated April 26, 2016 $ 217,000
Kawailoa Solar Holdings
Asset Management Agreement, dated December 14, 2017 $ 123,000
Oahu Solar
Asset Management Agreement, dated December 28, 2017 $ 192,000
Solar Community 1 LLC
Asset Management Agreement, dated March 29, 2013 $ 636,000
SPP Fund III
Asset Management Agreement, dated October 31, 2017 $ 128,000
SPP P-IV Master Lessee
Asset Management Agreement, dated July 12, 2012 $ 180,000
Utah Solar Holdings LLC
Master Management Agreement, dated March 27, 2017 $ 302,000
Wind
Buffalo Bear
Amended and Restated Services Agreement, dated September 15, 2011
$ 250,000
Elbow Creek
Project Administration Agreement, dated January 1, 2018 $ 255,000
Forward
Services Agreement, dated January 1, 2012 $ 193,000
Laredo Ridge
Support Services Agreement, dated May 27, 2010 $ 155,000
Lookout
Services Agreement, dated January 1, 2012 $ 193,000
Pinnacle
Amended and Restated Services Agreement, dated September 15, 2011
$ 166,000
Sleeping Bear
Services Agreement, dated January 1, 2012 $ 193,000
South Trent
Project Administration Agreement, dated October 1, 2015 $ 232,000
Spanish Fork
Services Agreement, dated January 1, 2012 $ 193,000
Taloga
Services Agreement, dated November 20, 2012 $ 154,000
Viento Funding II, Inc.
Management and Administration Agreement, dated July 1, 2013 $ 403,000
Wildorado
Project Administration Agreement, dated September 25, 2017 $ 246,000
Wind TE Holdco LLC
Services Agreement, dated November 3, 2014 $ 1,011,000
INSURANCE REIMBURSEMENTS
During 2020, we paid approximately $34,951,000 for insurance premium reimbursements to CEG.
FOURTH AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT OF CLEARWAY ENERGY LLC
The following is a description of the material terms of Clearway Energy LLC’s Fourth Amended and Restated Limited Liability Company Agreement (the “LLC Agreement”). For the year ended December 31, 2020, Clearway Energy LLC made approximately $120,992,000 in distributions to us and $89,794,000 to CEG (the holder of Class B and Class D units).
Governance
We serve as the sole managing member of Clearway Energy LLC. As such, we and effectively our Board, control the business and affairs of Clearway Energy LLC and are responsible for the management of its business.
Voting and Economic Rights of Members
Clearway Energy LLC has four classes of Units: Class A units, Class B units, Class C units and Class D units. Class A units and Class C units may be issued only to us as the sole managing member, and Class B units and Class D units may be issued only to CEG and held by CEG or its permitted transferees. Units of each of the four classes have equivalent economic and other rights, except that upon issuance, each holder of a Class B unit will also be issued a share of our Class B common stock, and each holder of a Class D unit will also be issued a share of our Class D common stock. Each Class B unit is exchangeable for a share of our Class A common stock and each Class D unit is exchangeable for a share of our Class D
 
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common stock, in each case subject to equitable adjustments for stock splits, dividends and reclassifications in accordance with the terms of the Exchange Agreement (as described below).
Net profits and net losses and distributions by Clearway Energy LLC are allocated and made to holders of units in accordance with the respective number of membership units of Clearway Energy LLC held. Generally, Clearway Energy LLC will make distributions to holders of units for the purpose of funding tax obligations in respect of income of Clearway Energy LLC that is allocated to the members of Clearway Energy LLC.
Coordination with Clearway Energy LLC
Any time we issue a share of Class A common stock or a share of our Class C common stock for cash, the net proceeds therefrom will promptly be transferred to Clearway Energy LLC, and Clearway Energy LLC will either:

transfer a newly issued Class A unit of Clearway Energy LLC to us in the case of the issuance of a share of Class A common stock, or a newly issued Class C unit of Clearway Energy LLC to us in the case of the issuance of a share of Class C common stock; or

use the net proceeds to purchase a Class B unit of Clearway Energy LLC from CEG in the case of the issuance of a share of Class A common stock, which Class B unit will automatically convert into a Class A unit of Clearway Energy LLC when transferred to us, or a Class D unit of Clearway Energy LLC from CEG in the case of the issuance of a share of Class C common stock, which Class D unit will automatically convert into a Class C unit of Clearway Energy LLC when transferred to us.
If we elect to redeem any shares of our Class A common stock or Class C common stock for cash, Clearway Energy LLC will, immediately prior to such redemption, redeem an equal number of Class A units or Class C units, as applicable, held by us upon the same terms and for the same price, as the shares of Class A common stock so redeemed.
EXCHANGE AGREEMENT
We entered into an Amended and Restated Exchange Agreement with NRG (the “Exchange Agreement”), which was assigned to CEG upon the GIP Transaction. Under the Exchange Agreement, CEG (and certain permitted assignees and permitted transferees who acquire Class B units or Class D units of Clearway Energy LLC) may from time to time cause Clearway Energy LLC to exchange their Class B units for shares of our Class A common stock on a one-for-one basis, subject to adjustments for stock splits, stock dividends and reclassifications, or exchange their Class D units for shares of our Class C common stock on a one-for-one basis, subject to equitable adjustments for stock splits, stock dividends and reclassifications.
When CEG or its permitted transferee exchanges a Class B unit of Clearway Energy LLC for a share of our Class A common stock, we will automatically redeem and cancel a corresponding share of our Class B common stock and the Class B unit will automatically convert into a Class A unit when issued to us; similarly, when CEG or its permitted transferee exchanges a Class D unit of Clearway Energy LLC for a share of our Class C common stock, we will automatically redeem and cancel a corresponding share of our Class D common stock and the Class D unit will automatically convert into a Class C unit when issued to us. As a result, when a holder exchanges its Class B units for shares of our Class A common stock, or its Class D units for shares of our Class C common stock, our interest in Clearway Energy LLC will be correspondingly increased.
REGISTRATION RIGHTS AGREEMENT
We entered into an Amended and Restated Registration Rights Agreement with NRG (the “Registration Rights Agreement”), which was assigned to CEG upon the GIP Transaction. Under the Registration Rights Agreement, CEG and its affiliates are entitled to demand registration rights, including the right to demand that a shelf registration statement be filed, and “piggyback” registration rights, for shares of our Class A common stock that are issuable upon exchange of Class B units of Clearway Energy LLC that CEG owns
 
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and shares of our Class C common stock that are issuable upon exchange of the Class D units of Clearway Energy LLC that CEG owns.
PROCEDURES FOR REVIEW, APPROVAL AND RATIFICATION OF RELATED PERSON TRANSACTIONS; CONFLICTS OF INTEREST
Our Board has adopted a written Related Person Transaction Policy (the “Related Person Policy”) that provides that the Corporate Governance, Conflicts and Nominating Committee will periodically review all related person transactions that are required to be disclosed under SEC rules and, when appropriate, initially authorize or ratify all such transactions. See “Governance of the Company — Corporate Governance, Conflicts and Nominating Committee.”
The Related Person Policy operates in conjunction with our Code of Conduct and is applicable to all “Related Person Transactions”, which are all transactions, arrangements or relationships in which:

the aggregate amount involved will or may be expected to exceed $50,000 in any calendar year;

the Company is a participant; and

any Related Person (as that term is defined below) has or will have a direct or indirect interest.
A “Related Person” is:

any person who is, or at any time during the applicable period was, a director of the Company or a nominee for director or an executive officer;

any person who is known to the Company to be the beneficial owner of more than 5% of any class of the Company’s voting stock;

any immediate family member of any of the persons referenced in the preceding two bullets, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the director, nominee for director, executive officer or more than 5% beneficial owner of any class of the Company’s voting stock, and any person (other than a tenant or employee) sharing the household of such director, nominee for director, executive officer or more than 5% beneficial owner of any class of the Company’s voting stock; and

any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a 10% or greater beneficial ownership interest.
In determining whether to recommend the initial approval or ratification of a Related Person Transaction, the Corporate Governance, Conflicts and Nominating Committee considers all of the relevant facts and circumstances available, including (if applicable) but not limited to: (a) whether there is an appropriate business justification for the transaction; (b) the benefits that accrue to us as a result of the transaction; (c) the terms available to unrelated third parties entering into similar transactions; (d) the impact of the transaction on director independence (in the event the related person is a director, an immediate family member of a director or an entity in which a director or an immediate family member of a director is a partner, stockholder, member or executive officer); (e) the availability of other sources for comparable products or services; (f) whether it is a single transaction or a series of ongoing, related transactions; and (g) whether entering into the transaction would be consistent with the Related Person Transaction Policy.
If the aggregate amount involved is expected to be less than $500,000, the transaction may be approved or ratified by the Chair of the Corporate Governance, Conflicts and Nominating Committee.
As part of its review of each Related Person Transaction, the Corporate Governance, Conflicts and Nominating Committee will take into account, among other factors it deems appropriate, whether the transaction is on terms no less favorable than the terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the Related Person’s interest in the transaction. This Related Person Policy also provides that certain transactions, based on their nature and/or monetary amount, are deemed to be pre-approved or ratified by the Corporate Governance, Conflicts and Nominating Committee and do not require separate approval or ratification.
 
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Transactions involving ongoing relationships with a Related Person will be reviewed and assessed at least annually by the Corporate Governance, Conflicts and Nominating Committee to ensure that such Related Person Transactions remain appropriate and in compliance with the Committee’s guidelines.
The Committee’s activities with respect to the review and approval or ratification of all Related Person Transactions are reported periodically to the Board. Any transaction between us and any Related Person, including CEG, will be subject to the prior review and approval of our Corporate Governance, Conflicts and Nominating Committee.
 
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EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION & ANALYSIS
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EXECUTIVE SUMMARY
EXECUTIVE COMPENSATION PROGRAM
Clearway is a publicly-traded energy infrastructure investor and owner of modern, sustainable and long-term contracted assets across North America. GIP, through its portfolio company, CEG, holds all of our Class B common stock and Class D common stock and thus has the majority voting interest in the Company. This Compensation Discussion and Analysis (this “CD&A”) describes the philosophy, elements, implementation and results of our 2020 executive compensation program as it applies to the executive team.
The Compensation Committee’s objectives are to design a simple yet competitive program, which is aligned with the interests of our stockholders. This program is designed to align short-term and long-term compensation with the Company’s annual performance and 3-year total stockholder return (“TSR”), respectively. Our annual incentive program (“AIP”) is based on objective criteria that support the achievement of our short-term objectives, which we believe create long-term shareholder value. Our long-term incentives are comprised of 67% Relative Performance Stock Units (“RPSUs”), which vest based on relative TSR measured over 3 years and 33% Restricted Stock Units (“RSUs”), which vest based on continued service over 3 years. The program incorporates many best practices in compensation design, while being tailored to our business needs and compensation objectives.
In 2020, the Compensation Committee reviewed and did not modify its compensation philosophy behind the compensation program. Thus, NEO compensation continued to be delivered through a mix of (i) base salary, (ii) an annual incentive bonus opportunity under the AIP and (iii) long-term incentive compensation under our LTIP in the form of RPSUs and RSUs.
At our 2020 Annual Meeting of Stockholders, we received 99% support for our say on pay proposal. We believe these results demonstrate our stockholders support our pay practices and that our compensation program is aligned with their interests.
KEY GOVERNANCE FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM
Our compensation program and practices incorporate several key governance features as highlighted in the table below.
What We Do:
What We Don’t Do:

Pay for performance by delivering a substantial majority of our CEO’s compensation through equity

No excise tax gross-ups on change-in-control payments and no tax gross-ups on perquisites or benefits

The large majority of our equity compensation for Senior Vice Presidents and above is performance-based

No pledging or hedging of the Company’s stock by NEOs or directors

Target our peer group median for total direct compensation

No employment agreements for executive officers with the exception of our CEO

Require a double trigger for the acceleration of equity vesting in connection with a change-in-control

No guaranteed bonus payments for our NEOs

Prevent undue risk taking in our compensation practices and engage in robust risk monitoring

No supplemental executive retirement plans

Include clawback policies in our compensation plans

No re-pricing of underwater stock options and no stock option grants with an exercise price below 100% of fair market value

Maintain robust stock ownership guidelines for our NEOs
 
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What We Do:
What We Don’t Do:

Provide market-level retirement benefits and limited perquisites

Engage an independent compensation consultant to provide advice to the Compensation Committee with respect to our compensation program

Conduct an annual say on pay vote
BUSINESS STRATEGY AND COMPANY PERFORMANCE
The Company’s primary business strategy is to focus on the acquisition and ownership of assets with predictable, long-term cash flows that allow the Company to increase the cash dividends paid to holders of the Company’s Class A and Class C common stock over time without compromising the ongoing stability of the business. The Company’s plan for executing this strategy includes the following key components: focusing on contracted renewable energy and conventional generation and thermal infrastructure assets; growing our business through acquisitions of contracted operating assets primarily in North America; and maintaining sound financial practices to grow our dividend.
The execution of the Company’s business strategy produced the following results in 2020:

Raised approximately $1.4 billion in new capital formation for growth investments and liability management, which included corporate level debt and equity financings, the optimization of non-recourse project level debt, and the recycling of non-strategic assets

Closed on the disposition of non-strategic assets providing for approximately $90 million in capital available for growth investments

Invested or committed approximately $642 million in new growth investments with CEG

Successfully managed the impacts from the PG&E bankruptcy through PG&E’s bankruptcy emergence

Entered into an agreement to acquire an additional 35% equity interest in the Agua Caliente solar project from NRG Energy, Inc., with the transaction closing in 2021
Such results were taken into account by the Compensation Committee in making determinations with respect to the compensation for our NEOs under the 2020 compensation program.
 
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EXECUTIVE COMPENSATION PROGRAM
2020 NAMED EXECUTIVE OFFICERS
This CD&A describes the material components of our compensation program for our NEOs in 2020. For the year ending December 31, 2020, our NEOs included the following individuals:
NEO
2020 Title
Christopher S. Sotos
President and Chief Executive Officer
Chad Plotkin
Senior Vice President and Chief Financial Officer
Kevin P. Malcarney
Senior Vice President, General Counsel and Corporate Secretary
Mary-Lee Stillwell
Vice President and Chief Accounting Officer(1)
(1)
Ms. Stillwell voluntarily resigned from her employment with the Company in August 2020.
GOALS AND OBJECTIVES OF THE PROGRAM
The Compensation Committee is responsible for the development and implementation of the Company’s executive compensation program, subject to Board approval for equity awards to certain officers, and references to Compensation Committee actions described below should be read in a manner that contemplates the requisite Board approval, as applicable, is in effect (see “Board Committees — Compensation Committee” above). The intent of the program is to reward the achievement of the Company’s annual goals and objectives while supporting the Company’s long-term business strategy. The Compensation Committee is committed to aligning executives’ compensation with performance. Our Compensation Committee has designed an executive compensation program that:

closely aligns our executive compensation with stockholder value creation, avoiding plans that encourage executives to take excessive risk, while driving long-term value to stockholders;

supports the Company’s long-term business strategy, while rewarding our executive team for their individual accomplishments with tailored individual executive compensation metrics and incentives; and

provides a competitive compensation opportunity while aligning with market standards for compensation.
The Compensation Committee’s objectives are achieved through the use of both short-term and long-term incentives. The Company currently targets pay at the median of our Compensation Peer Group (defined below), as described under “Elements of Compensation.”
 
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THE COMPENSATION PROCESS
COMPENSATION CONSULTANT
Pursuant to its charter, the Compensation Committee is authorized to engage, at the expense of the Company, a compensation consultant to provide independent advice, support and expertise to assist the Compensation Committee in overseeing and reviewing our overall executive compensation strategy, structure, policies and programs, and to assess whether our compensation structure establishes appropriate incentives for management and other key employees. As noted above, Deloitte served as the Compensation Committee’s independent compensation consultant for the first eight months of fiscal year 2020. Pay Governance became the Compensation Committee’s independent compensation consultant in August 2020 after a key relationship contact from Deloitte joined Pay Governance, and Pay Governance has continued to serve in that capacity to the present date. Deloitte worked with the Compensation Committee to formulate the design of the executive and director compensation programs for 2020. Each of Deloitte and Pay Governance provided reports to the Compensation Committee (during the respective periods they served as compensation consultant) containing research, market data, survey information and information regarding trends and developments in executive and director compensation. Each of Deloitte and Pay Governance reported directly to the Compensation Committee (during the respective periods they served as compensation consultant). The Company paid each of Deloitte and Pay Governance $138,192 and $50,051, respectively, for the work they performed for the Compensation Committee in 2020. CEG engaged Deloitte and its affiliate, Deloitte & Touche LLP, to provide additional services in 2020, for which CEG paid $188,375. These additional services primarily related to accounting and reporting support. Given that these services were provided to CEG, the decision to engage Deloitte and its affiliate for such services was not made, or recommended, by our management, or approved by the Compensation Committee or the Board. Neither Pay Governance, nor any of their affiliates provided services for any of our affiliates in 2020. In accordance with SEC rules and requirements, the Company has affirmatively determined that no conflicts of interest exist between the Company and Deloitte or Pay Governance (or any individuals working on the Company’s account on behalf of Deloitte or Pay Governance).
COMPENSATION PEER GROUP ANALYSIS
The Compensation Committee, with support from its independent compensation consultant, identifies the most appropriate comparator group within relevant industries for purposes of benchmarking compensation. The Compensation Committee aims to compare our compensation program to a consistent peer group year-to-year but given the dynamic nature of our industry and the companies that constitute it, the Compensation Committee annually examines the peer group for appropriateness in terms of size, complexity and industry. As a result of such annual review, the Compensation Committee identified a new peer group for compensation benchmarking purposes in 2020 (the “Compensation Peer Group”).
For these purposes, the Compensation Peer Group, comprised of similarly sized publicly owned energy and utility companies, is identified below.
Company
Ticker
Company
Ticker
Algonquin Power &
Utilities Corp.
NYSE: AQN
NorthWestern Corporation.
NYSE: NWE
Black Hills Corporation
NYSE: BKH
Ormat Technologies, Inc.
NYSE: ORA
El Paso Electric
Company(1)
NYSE: EE Pattern Energy Group
   Inc.(2)
NASDAQ: PEGI
Genesis Energy, L.P.
NYSE: GEL
South Jersey Industries, Inc.
NYSE: SJI
Innergex Renewable
Energy Inc.
TSX: INE Suburban Propane Partners,    L.P. NYSE: SPH
MGE Energy, Inc.
NASDAQ: MGEE
TransAltaCorporation.
NYSE: TAC
Northland Power Inc.
TSX: NPI
(1)
El Paso Electric Company was acquired by Sun Jupiter Holdings LLC in July 2020 and was delisted,
 
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but was included by Deloitte (when it was serving as compensation consultant) as part of its 2020 compensation benchmarking analysis, and for that reason, El Paso Electric Company is included in the Compensation Peer Group for 2020 but will not be part of the Compensation Peer Group for 2021 or going forward.
(2)
Pattern Energy Group Inc. was acquired by Canada Pension Plan Investment Board in March 2020 and was delisted, but was included by Deloitte (when it was serving as compensation consultant) as part of its 2020 compensation benchmarking analysis, and for that reason, Pattern Energy Group Inc. is included in the Compensation Peer Group for 2020 but will not be part of the Compensation Peer Group for 2021 or going forward.
For the purposes of determining appropriate NEO pay levels for 2020, the Compensation Committee reviewed NEO compensation from peers, where available and appropriate (e.g., based on an NEO’s position and duties). To supplement this analysis, the Compensation Committee also participated in meetings with its compensation consultant regarding the compensation consultant’s review of relevant third-party survey data and considered the recommendations of the CEO on NEO and employee compensation matters not involving the CEO. The Compensation Committee may accept or adjust such CEO recommendations at its discretion.
 
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ELEMENTS OF COMPENSATION
Our compensation program for our NEOs consists of fixed compensation (base salary), performance-based compensation (AIP bonus and RPSUs) and time-based compensation (RSUs). We use the median percentile of our Compensation Peer Group as a guidepost in establishing the targeted levels of total direct compensation (cash and equity) for our NEOs. We expect that, over time, targeted total direct compensation for our NEOs will continue to approximate the median of our Compensation Peer Group. Realized pay in a given year depends on the achievement of defined performance-based compensation metrics. While a portion of our NEOs’ compensation is fixed, a significant percentage is at-risk and payable and/or realizable only if certain performance objectives are met.
BASE SALARY
Base salary compensates NEOs for their level of experience and position responsibilities and for the continued expectation of superior performance. Recommendations on increases to base salary take into account, among other factors, the NEO’s individual performance, the general contributions of the NEO to overall corporate performance, the level of responsibility of the NEO with respect to his or her specific position, and the NEO’s current base salary level compared to the market median. Mr. Malcarney and Ms. Stillwell received base salary increases in 2020 based on their performance and peer group benchmarking. The base salary for each NEO for fiscal year 2020 is set forth below:
Named Executive Officer
2020 Annualized
Base Salary ($)(1)
Percentage Increase
Over 2019 (%)(2)
Christopher S. Sotos
611,000 0%
Chad Plotkin
380,000 0%
Kevin P. Malcarney
307,500 3%
Mary-Lee Stillwell(3)
303,850 3%
(1)
Actual 2020 base salary earnings are presented in the Summary Compensation Table.
(2)
As compared to the December 31, 2019 annualized base salary.
(3)
Ms. Stillwell voluntarily resigned from her employment with the Company in August 2020. Ms. Stillwell earned $196,969 prior to her departure.
ANNUAL INCENTIVE COMPENSATION
Overview
Annual incentive compensation awards (AIP bonuses) are made under our AIP. AIP bonuses represent short-term compensation designed to compensate NEOs for meeting annual Company goals and for their individual performance over the course of the year. The Compensation Committee establishes these annual Company goals after reviewing the Company’s business strategy and other matters. As further discussed below, the annual goals for 2020 relate to the following three areas: (a) CAFD, (b) key performance milestones, and (c) achievement of the Thermal Plan (as described below). In addition, each NEO’s individual performance may (negatively or positively) affect the bonus amount that he or she ultimately receives under our AIP. However, notwithstanding individual performance or the extent to which the Company goals are achieved, the Compensation Committee retains sole discretion under the AIP to reduce the amount of or eliminate any AIP bonuses that are otherwise payable under the AIP.
AIP bonus opportunities are expressed in terms of threshold, target and maximum bonus opportunities. Different percentages of each NEO’s annual base salary relate to these threshold, target and maximum AIP bonus opportunities. However, in the event threshold performance for 2020 was not achieved with respect to any of the AIP performance metrics, no AIP bonuses would have been payable for 2020.
The AIP provides NEOs (other than Mr. Sotos whose severance is governed by his employment agreement) eligibility for a pro-rated target bonus payment for the year of a qualifying severance termination, based on the portion of the performance period that the NEO was employed.
 
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2020 AIP Bonus Performance Criteria
The AIP bonus performance criteria applicable to all NEOs are based upon the three Company goals described above and individual performance. The table below sets forth the 2020 AIP performance criteria and weightings applicable to all NEOs, assuming the achievement of each goal at target.
Goal
Weight
CAFD(1)
35%
Key Performance Milestones
55%
Achievement of the Thermal Plan
10%
Overall Funding
100%
Individual Performance
+/- 20%
(1)
CAFD is adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) plus cash distributions/return of investment from unconsolidated affiliates, cash receipts from notes receivable, cash distributions from noncontrolling interests, less cash distributions to noncontrolling interests, maintenance capital expenditures, pro-rata Adjusted EBITDA from unconsolidated affiliates, cash interest paid, income taxes paid, principal amortization of indebtedness, Walnut Creek investment payments, and changes in prepaid and accrued capacity payments.

CAFD.   The Compensation Committee set the 2020 threshold, target and maximum CAFD performance metric at $248 million, $310 million and $372 million, respectively. For 2020, the CAFD goals and the achieved level are set forth in the chart below. The Company achieved CAFD of approximately $295 million, surpassing the CAFD threshold but less than the CAFD target. For purposes of determining AIP bonus performance, CAFD was adjusted in order to eliminate the distorting effect of certain extraordinary events.
CAFD
Threshold
CAFD
Target
CAFD
Maximum
CAFD
Actual
$248 million
$310 million
$372 million
$295 million

Key Performance Milestones.   “Key performance milestones” performance metrics are established as a defined annual incentive category. The Compensation Committee establishes threshold, target and maximum levels of performance for this category based on the number of milestones achieved. For 2020, a total of nine milestones were established relating to the Company’s credit rating, external M&A activity, adherence to budget, CAFD per share goals, ratio of administrative costs to CAFD, corporate process improvement, Thermal growth, and OSHA recordable incident rate. Additional CAFD and safety-related goals also applied with respect to the Company’s Thermal business. For 2020, threshold performance required the achievement of three out of the nine milestones, target performance required the achievement of five out of the nine milestones, and maximum performance required the achievement of all nine milestones. Ultimately, above target performance was attained with the achievement of six out of the nine milestones in 2020.

Achievement of the Thermal Plan.   Achievement of “Thermal Plan” performance metrics was added as an annual incentive category beginning in 2019 based on the view that all elements of the Company’s business should be reflected in the AIP bonus opportunity. The Compensation Committee established threshold, target and maximum levels for this category for each of the “Thermal Plan” performance metrics. For 2020, the Thermal Plan performance metrics relate to the Thermal business’s CAFD, growth and five key Thermal goals. Similar to the key performance milestones described above, threshold, target and maximum levels of performance were established for the key Thermal goals based on the number of goals achieved. These goals related to safety, environmental compliance, program accountability, project investment modeling and the successful integration of Thermal acquisitions, in each case, with respect to the Thermal business (threshold, target and maximum performance required the achievement of one, three and five goals, respectively, out of a total of five). Ultimately, below-target performance was attained (expressed as 55% of target) with respect to the Thermal Plan in 2020 (despite achieving four out of the five key Thermal goals).
 
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Individual Performance.   As indicated above, an NEO’s individual performance may (negatively or positively) affect his or her AIP bonus by up to 20%, although no AIP bonus payments can exceed 200% of the target award. Such individual performance is determined on a discretionary basis based on the Compensation Committee’s assessment of the NEO’s contributions in supporting adherence to budget, support towards the achievement of key milestones, and other contributions towards the successful execution of the Company’s business strategy. In 2020, the Compensation Committee considered the individual performance of the CEO and recommended to the full Board that his AIP bonus be increased by 7% to account for his individual performance. In a similar manner, the CEO recommended to the Compensation Committee that the AIP bonus be increased for the other NEOs by 15%. The full board approved the above recommendation of the Compensation Committee and the Compensation Committee approved the above recommendation of the CEO.
2020 Annual Incentive Bonus Opportunity
The threshold, target and maximum AIP bonus opportunities for NEOs for 2020, expressed as a percentage of base salary, were:
Named Executive Officer
Threshold
(%)(1)
Target
(%)(1)
Maximum
(%)(1)
Target
Amount ($)
Christopher S. Sotos
50 100 200 611,000
Chad Plotkin
30 60 120 228,000
Kevin Malcarney
20 40 80 123,000
Mary-Lee Stillwell(2)
20 40 80 121,540
(1)
This assumes that the CAFD performance metric and all other quantitative and qualitative goals, including the key milestones, are achieved at threshold, target and maximum levels, as applicable.
(2)
Ms. Stillwell did not receive a payment as a result of her voluntary resignation in August 2020.
2020 Annual Incentive Bonuses
As noted above, with respect to AIP bonuses for 2020, the CAFD target was $310 million, the key performance milestone target was achievement of five out of nine key performance milestones and target achievement of the “Thermal Plan” metrics was based on the achievement of various sub-categories, including the achievement of four out of five key Thermal goals.
For 2020, CAFD achievement, as adjusted, was between threshold and target at approximately $304 million and six out of nine key performance milestones were achieved. In addition, overall achievement for the Thermal Plan for 2020 was below target at 55%. Due to the achievement specified above, 2020 AIP bonuses were paid at levels above target. If performance falls between threshold and target or target and maximum, the bonus opportunity will be determined on an interpolated basis. As a result, the CAFD metric, the key performance milestone, and Thermal Plan metrics were respectively weighted at 95%, 125% and 55% of target. Individual performance, which is determined on a discretionary basis, resulted in positive adjustments to the AIP bonuses for the NEOs from 7% to 15%.
The annual incentive bonuses paid to NEOs for 2020 were:
Named Executive Officer
Percentage of
Annual Base
Salary (%)
Percent of
Target
Achieved (%)
Annual
Incentive
Payment ($)
Christopher S. Sotos
114 107 699,534
Chad Plotkin
74 107 281,551
Kevin P. Malcarney
49 107 151,889
Mary-Lee Stillwell(1)
N/A N/A N/A
(1)
Ms. Stillwell voluntarily resigned from her employment with the Company in August 2020. Accordingly, no annual incentive bonus was paid to Ms. Stillwell for 2020.
 
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LONG-TERM INCENTIVE COMPENSATION
We believe that equity awards directly align our NEOs’ interests with those of our stockholders. In 2020, the Compensation Committee granted our NEOs a combination of performance-based equity awards directly linked to long-term stockholder value creation and time-based equity awards which also represent a critical component of our long-term incentive compensation due to the retention aspects of the awards. To enhance our compensation program’s focus on Company performance, the large majority of these long-term incentive awards (67%) were performance-based (i.e., granted as RPSUs). The remainder of our long-term incentive awards (33%) were time-based (i.e., granted as RSUs which vest over 3 years). We believe that our AIP appropriately focuses our NEOs on shorter-term (one-year) financial metrics while our LTIP emphasizes long-term stockholder value creation (i.e., three-year TSR outperformance). For 2020, Mr. Plotkin’s target LTIP award was 125% of his base salary, Mr. Malcarney’s target LTIP award was 100% of his base salary, and Ms. Stillwell’s target LTIP award was 75% of her base salary. Mr. Sotos’ target LTIP award increased from 250% in 2019 to 264% in 2020. This change was intended to recognize his performance and better align his total direct compensation with the market median. The above mix of long-term incentive compensation applied to all NEOs for 2020, except Ms. Stillwell, who received 100% RSUs under the terms of her offer letter. Ms. Stillwell’s outstanding RSUs were forfeited as of the time of her resignation.
Relative Performance Stock Units
Each RPSU represents the potential to receive one share of Class C common stock, as adjusted, based on the Company’s TSR performance ranked against the TSR performance of a comparator group of similar companies (the “Performance Peer Group”) after the completion of a three-year performance period. Relative measures are designed to normalize for externalities, ensuring the program appropriately reflects management’s impact on the Company’s TSR by including peer companies that the Compensation Committee believes are similarly impacted by market conditions.
The payout of shares of Class C common stock at the end of the three-year performance period is based on the Company’s TSR performance percentile rank compared with the TSR performance of the Performance Peer Group. To ensure a rigorous program design, the target level payout (100% of shares granted) requires the Company to perform at the 50th percentile. To induce management to achieve greater than target level performance in a down market, in the event that the Company’s TSR performance declines by more than 20% over the performance period, the target level payout (100% of shares granted) will require an even greater achievement of a 60th percentile performance. The Compensation Committee believes that this increased performance