• Elliott Management set to intervene again in NRG Energy management after criticising strategy

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      Patrick Lavery

      Combustion Industry News Editor

The Financial Times has reported on the effort of investment group Elliott Management to unseat the CEO of NRG Energy, a company in which Elliott holds a 13% stake.

In 2017, when current CEO Mauricio Gutierrez had been in his role for just over a year, Elliott Management intervened to put two board members into NRG and persuade the company to cut the size of its generating fleet to focus on retail electricity. In terms of share price, this strategy was a success, with NRG becoming the best performing company on the S&P 500 index for the year. However, the two board members left, and the company’s strategy began to change again, such that in December of last year, NRG announced that it had bought Vivint Smart Home, which develops and sells internet connected devices such as thermostats.

Mr Gutierrez said of the deal that NRG had positioned itself “to capitalise on the convergence of electricity and smart technologies inside the home”. Elliot Management, however, described the deal (in May this year) as the “single worst deal in the power and utilities sector in the past decade”, and that the company strategy was deeply flawed and “overseen by a leadership team unfit to execute”.

It appears as though Elliott will intervene in company management again before the end of the year, according to sources informing the FT.