DEF 14A: NuScale Power Corporation Sets Date for 2024 Annual Stockholders Meeting

NuScale Power Corporation will hold its 2024 Annual Meeting of Stockholders virtually on May 24, 2024, to elect directors and ratify the appointment of Ernst & Young LLP as its independent accounting firm.

Summary

• NuScale Power Corporation will hold its 2024 Annual Meeting of Stockholders virtually on May 24, 2024, at 2:00 p.m. Pacific Time.
• Stockholders of record as of March 27, 2024, are eligible to vote.
• The meeting will address the election of nine directors and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2024.
• The Board of Directors recommends voting for the election of the director nominees and for the ratification of Ernst & Young LLP.
• In 2023, NuScale LLC made payments totaling $36,475,762.85 to Fluor Enterprises, Inc. for EPC and other services.
• Fluor Enterprises, Inc. made payments totaling $15,451,670.13 to NuScale LLC for engineering, design, and other services.
• NuScale LLC received payments totaling $164,010.00 from Samsung C&T Corporation for software licensing and related services.
• NuScale LLC made payments totaling $34,364,018.24 to Doosan for services provided pursuant to the Master Services Agreement.
• As of December 31, 2023, there have been 23,919,679 Class B units exchanged for shares of Class A common stock.
• Associated with these exchanged units, NuScale has calculated an implied Tax Receivable Agreement (TRA) obligation of $60,347,000 as of December 31, 2023, but no liability has been recorded due to the company's current tax situation.
• Non-employee directors receive an annual $80,000 cash retainer (or stock equivalent) and additional retainers for committee service.
• Non-employee directors also receive annual time-based Restricted Stock Unit (RSU) awards with a grant value equal to $110,000, that vest quarterly over one year, and one-time RSU awards when they joined the Board with a grant value equal to $110,000, that vest quarterly over three years.
• The Board approved a payout at 94.6 percent of target for the 2023 NuScale Professional Incentive Plan goals, which was paid to bonus-eligible employees, including the NEOs, in March 2024.
• Audit fees paid to Ernst & Young LLP were $1,222,500 in 2023 and $1,350,000 in 2022.

Sentiment

Score: 7

Explanation: The document is primarily informational, outlining the agenda and procedures for the annual meeting. The tone is professional and forward-looking, with a focus on corporate governance and compliance. The inclusion of risk factors tempers the overall sentiment.

Positives

• The Board of Directors is actively engaged in risk oversight through the Audit Committee and other standing committees.
• NuScale has a written related person transaction policy to minimize potential conflicts of interest.
• The company has a Stock Ownership and Anti-Hedging/Pledging Policy for non-employee directors and executive officers.
• NuScale has entered into indemnification agreements with its executive officers and directors.
• The company has a clawback policy that allows for the recoupment of compensation in the event of a restatement of incorrect financial results.

Negatives

• NuScale is a controlled company, which means it is exempt from certain NYSE requirements regarding board independence.
• The Tax Receivable Agreement could have a substantial negative impact on NuScale's liquidity.
• NuScale's ability to make payments under the Tax Receivable Agreement depends on the ability of NuScale LLC to make distributions to it.
• The company has incurred significant related party transactions with Fluor Enterprises, Inc., Samsung C&T Corporation, and Doosan Enerbility Co. Ltd.

Risks

• Deterioration in domestic and global economic conditions could affect NuScale's business.
• Adverse weather conditions or natural disasters could impact operations.
• Legal or regulatory changes could affect commercial nuclear and energy businesses.
• The Internal Revenue Service may challenge all or part of the tax basis increase, other tax benefits, and associated increased deductions related to the Tax Receivable Agreement.
• NuScale could be required to make payments under the Tax Receivable Agreement that exceed actual cash tax savings.
• The company's obligations under the Tax Receivable Agreement could have a substantial negative impact on its liquidity.

Future Outlook

The proxy statement contains forward-looking statements regarding mandates, expectations, beliefs, and business plans, which are subject to risks and uncertainties.

Management Comments

• On behalf of the Board of Directors and our leadership team, I would like to express our appreciation for your continued interest in NuScales business, said John L. Hopkins, Chief Executive Officer of NuScale Power Corporation.

Industry Context

NuScale is operating in the competitive and growing nuclear energy industry, requiring strong leadership and strategic execution.

Comparison to Industry Standards

• The compensation consultant, FW Cook, recommended that the Company adopt a compensation program targeted at the median of industry peers, for both cash compensation (salary plus target bonus) and equity.
• FW Cook performed an analysis of 17 comparable peer companies when recommending the total cash and equity compensation adopted by the Board, which targeted total director compensation at about the 50th percentile.
• In February 2023, FW Cook provided an updated review of total compensation for directors, referencing 18 comparable peer companies.

Management Changes

Related Party Transactions

• NuScale LLC made payments totaling $36,475,762.85 to Fluor Enterprises, Inc. for EPC and other services.
• Fluor Enterprises, Inc. made payments totaling $15,451,670.13 to NuScale LLC for engineering, design, and other services.
• NuScale LLC received payments totaling $164,010.00 from Samsung C&T Corporation for software licensing and related services.
• NuScale LLC made payments totaling $34,364,018.24 to Doosan for services provided pursuant to the Master Services Agreement.

Stakeholder Impact

• Stockholders are asked to vote on key proposals that will shape the company's direction.
• Executive compensation policies are designed to align management's interests with those of equity owners.
• The Tax Receivable Agreement could impact the company's liquidity and ability to make payments to stakeholders.

Next Steps

• Stockholders are encouraged to vote by telephone, mail, or over the Internet as soon as possible.
• The Board will consider stockholder proposals received by December 13, 2024, for inclusion in the 2025 proxy statement.
• The company will file a Current Report on Form 8-K with the SEC within four business days after the Annual Meeting to disclose the voting results.

Key Dates

Keywords

NuScale Power, Annual Meeting, Proxy Statement, Board of Directors, Ernst & Young, Stockholders, Director Election, Tax Receivable Agreement, Executive Compensation, Related Party Transactions