Form 4: Clearway Energy Executive Kevin P. Malcarney Reports Changes in Beneficial Ownership

Kevin P. Malcarney, EVP, General Counsel, and Corporate Secretary of Clearway Energy, Inc., reports transactions involving Class C Common Stock and derivative securities, including vesting of Restricted Stock Units (RSUs) and Relative Performance Stock Units (RPSUs), and shares surrendered to cover tax obligations.

Summary

• On April 17, 2025, Kevin P. Malcarney, an executive at Clearway Energy, Inc., filed a Form 4 detailing changes in his beneficial ownership of the company's Class C Common Stock.
• The reported transactions include the vesting of Restricted Stock Units (RSUs) and Relative Performance Stock Units (RPSUs) granted under Clearway Energy Inc.'s Amended and Restated 2013 Equity Incentive Plan.
• Malcarney surrendered shares of Class C Common Stock to satisfy tax obligations related to the vesting of RSUs and RPSUs.
• He was issued 6,234 Relative Performance Stock Units (RPSUs) and 6,233 CAFD (Cash Available For Distribution) Performance Stock Units (CPSUs) on April 15, 2025.
• The vesting of RPSUs is contingent upon Clearway Energy's total shareholder return (TSR) relative to a peer group over a three-year performance period, with potential payouts ranging from 1,558 to 9,351 shares depending on TSR performance.
• The vesting of CPSUs is contingent upon Clearway Energy's average CAFD per share over a three-year performance period, with potential payouts ranging from 1,558 to 9,349 shares depending on CAFD per share performance.
• Following the reported transactions, Malcarney beneficially owns 84,000 shares of Class C Common Stock and 6,234 Relative Performance Stock Units and 6,233 CAFD Performance Stock Units.

Sentiment

Score: 7

Explanation: The sentiment is neutral to slightly positive. The vesting of equity awards suggests confidence in the company's future performance, while the surrender of shares for taxes is a normal part of the compensation process.

Positives

• The vesting of RSUs and RPSUs indicates that Mr. Malcarney is being compensated with equity, aligning his interests with those of shareholders.
• The potential for a significant number of shares to vest based on TSR and CAFD performance incentivizes strong company performance.

Negatives

• The surrender of shares to cover tax obligations reduces Mr. Malcarney's direct ownership of Clearway Energy stock.

Risks

• The value of the RPSUs and CPSUs is contingent on Clearway Energy's future performance, specifically its TSR relative to a peer group and its CAFD per share.
• If the company does not meet the performance thresholds, Mr. Malcarney will receive fewer shares, potentially impacting his compensation and alignment with shareholder interests.

Future Outlook

The number of shares ultimately received from the RPSUs and CPSUs will depend on the company's TSR relative to its peer group and its CAFD per share performance over the next three years, respectively.

Industry Context

This filing is a routine disclosure related to executive compensation and equity ownership, common in publicly traded companies. The use of TSR and CAFD metrics aligns executive incentives with shareholder value creation and operational performance, which is a common practice in the energy sector.

Comparison to Industry Standards

• Equity-based compensation is a standard practice among publicly traded companies, particularly in the energy sector, to align executive interests with those of shareholders.
• Using TSR as a performance metric is common, as it directly reflects shareholder returns.
• CAFD (Cash Available for Distribution) is a key metric for yield-oriented companies like Clearway Energy, as it indicates the company's ability to generate cash for dividends.
• Peer groups for TSR comparisons typically include companies with similar business models, market capitalization, and risk profiles.

Stakeholder Impact

• Shareholders: The vesting of equity awards aligns executive interests with shareholder value creation.
• Employees: The equity incentive plan provides a mechanism for employee compensation and motivation.
• Creditors: The company's financial performance, as reflected in CAFD, impacts its ability to meet debt obligations.

Next Steps

• The RPSUs and CPSUs will vest on April 15, 2028, contingent on the company's TSR and CAFD performance over the next three years.
• Mr. Malcarney will continue to hold and potentially trade Clearway Energy stock, subject to insider trading regulations.

Key Dates

Keywords

Clearway Energy, Kevin P. Malcarney, Form 4, Beneficial Ownership, Class C Common Stock, Restricted Stock Units, Relative Performance Stock Units, CAFD Performance Stock Units, Equity Incentive Plan, TSR, CAFD, Vesting, Tax Withholding