DEF: NuScale Power Sets Date for 2025 Annual Stockholders Meeting, Outlines Key Proposals

NuScale Power Corporation announces its 2025 Annual Meeting of Stockholders to be held virtually on May 23, 2025, featuring proposals ranging from director elections to executive compensation and corporate governance amendments.

Summary

• NuScale Power Corporation will hold its 2025 Annual Meeting of Stockholders virtually on May 23, 2025, at 2:00 p.m. Pacific Time.
• Stockholders of record as of March 24, 2025, are eligible to vote on several key proposals.
• The proposals include the election of eight directors, an advisory vote on executive compensation, and a vote on the frequency of future executive compensation votes.
• Additionally, stockholders will consider amending the company's Certificate of Incorporation regarding the waiver of corporate opportunities and ratifying the appointment of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The proxy statement and annual report are available electronically at www.nuscalepower.com and www.sec.gov, with paper copies available upon request.
• The Board of Directors recommends voting 'FOR' all director nominees, the executive compensation proposal, amending the Certificate of Incorporation, and ratifying the appointment of Ernst & Young LLP.
• The Board recommends a vote 'FOR' the option of every one year as the preferred frequency for Advisory Votes to Approve Executive Compensation.
• The company's corporate governance structure includes independent director representation, regular executive sessions, and a code of business conduct.
• The Board has determined that all directors, except Messrs. Boeckmann, Breuer, Collins, and Hopkins, are independent.
• The Board is actively involved in risk oversight, including cybersecurity risks, and receives periodic reports from management.
• Executive compensation includes base salaries, annual incentives, and long-term equity incentives, with a focus on aligning executive interests with those of stockholders.
• The Compensation Committee engaged FW Cook as an independent compensation consultant.
• The company has a clawback policy, anti-hedging/pledging policy, and stock ownership requirements for executives and directors.
• The company's related person transaction policy requires Audit Committee review of transactions exceeding $120,000.
• The company has a Tax Receivable Agreement (TRA) with certain securityholders, potentially requiring significant payments based on future tax savings.
• As of December 31, 2024, there have been 24,142,048 Class B units exchanged (together with the cancellation for no consideration of an equal number of shares of Class B common stock) for shares of Class A common stock.
• Associated with these exchanged units we have calculated an implied Tax Receivable Agreement obligation of $63,360,000 as of December 31, 2024.
• However, given the Company's current tax situation, we conclude the liability is not probable, and thus no liability related to projected obligations under the Tax Receivable Agreement has been recorded.

Sentiment

Score: 7

Explanation: The document is primarily informational and procedural, with a neutral to slightly positive tone. The company highlights its focus on customer acquisition and financial discipline, suggesting a degree of optimism.

Positives

• The company maintains a robust corporate governance structure with independent directors and active risk oversight.
• Executive compensation is aligned with company performance and stockholder value through a mix of base salary, incentives, and equity awards.
• The company has implemented policies to prevent excessive risk-taking, including a clawback policy and anti-hedging/pledging restrictions.
• The Board is committed to considering stockholder feedback on executive compensation and corporate governance matters.
• The company provides detailed disclosures on related person transactions and has policies in place to manage potential conflicts of interest.

Negatives

• The Tax Receivable Agreement (TRA) could create a significant financial obligation for the company in the future.
• Certain directors are not considered independent due to prior or current relationships with Fluor Corporation, although this is expected to change for Mr. Boeckmann by May 5, 2025.
• The company's success is dependent on achieving certain milestones and securing new customers, as reflected in the incentive compensation plan.

Risks

• The company's future financial performance is subject to various risks, including economic conditions, competition, regulatory changes, and technological developments.
• The Tax Receivable Agreement (TRA) could have a substantial negative impact on the company's liquidity and financial flexibility.
• Challenges to the tax basis increase could result in the IRS challenging all or part of the tax basis increase, other tax benefits, and associated increased deductions, and any such challenge may be sustained by a court.
• The company's ability to make payments under the Tax Receivable Agreement depends on the ability of NuScale LLC to make distributions to it.
• The company's success is dependent on achieving certain milestones and securing new customers, as reflected in the incentive compensation plan.

Future Outlook

The company is focused on customer acquisition, operational excellence, safety, and financial discipline to create sustainable stakeholder value. They believe they will acquire a new Class 1 commercial customer in 2025.

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.
• We continue to progress towards our goal of acquiring a new Class 1 commercial customer, and while we did not achieve this goal in 2024, we believe that we will in 2025.
• Our operational cash flows remain strong, and we believe our cash balance at the end of 2024 positions us to be able to implement the actions needed as we continue our commercialization efforts within the Company.

Industry Context

NuScale Power operates in the nuclear energy sector, which is subject to significant regulatory oversight and technological advancements. The company competes with other energy providers and must adapt to changing market conditions and consumer preferences.

Comparison to Industry Standards

• The peer group used for calculating peer group TSR consists of publicly traded companies in the nuclear or energy transition industries comprised of Ballard Power Systems Inc., Bloom Energy Corporation, BWX Technologies, Inc., Enphase Energy, Inc., Enovix Corporation, FuelCell Energy, Inc., Plug Power Inc., Oklo Inc. and SolarEdge Technologies, Inc.
• The Compensation Committee reviews benchmarking comparisons prepared by its compensation consultant for each NEO against similar positions within the peer group.
• For 2024, the Compensation Committee determined that the peer group selection criteria should remain unchanged, and companies comprising our peer group for purposes of establishing 2024 compensation were: Peer Group Archer Aviation Ballard Power Blink Charging* Bloom Energy Centrus Energy ChargePoint Energy Fuels** Enovix Eos Energy ESS Tech EVgo FuelCell Energy* Hyliion Joby Aviation Montauk Renewables** Plug Power** Shoals Tech. Stem Sunnova Energy**

Corporate Governance

Legal Proceedings

• The proposed amendment would also allow the Company to moot the claims brought in a putative class action against the Company, its current directors, and one former director in the Court of Chancery of the State of Delaware in December of 2024, captioned Tucker v. NuScale Power Corporation, et al. , C.A. No. 2024-1272 (Del. Ch.) (the Tucker Action).

Related Party Transactions

• NuScale Power, LLC made payments totaling $2,436,639 to Fluor Enterprises, Inc. for various EPC and other services in support of NuScale LLCs business activities.
• Fluor Enterprises, Inc. made payments totaling $2,642,412 to NuScale LLC for engineering, design and other services.
• Fluor Transworld Services, Inc. made payments totaling $570,045.17 to NuScale LLC for engineering, design and other services.

Stakeholder Impact

• Stockholders will have the opportunity to vote on key proposals that affect the company's governance, executive compensation, and strategic direction.
• The outcome of the votes could impact the company's stock price and overall financial performance.
• The company's commitment to safety and operational excellence benefits employees and the communities in which it operates.
• The company's relationships with Fluor and other related parties could impact its ability to secure contracts and deliver projects.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the proxy statement.
• The company will hold its Annual Meeting on May 23, 2025, to conduct the business described in the proxy statement.
• The Board and management will consider the voting results when making future decisions regarding executive compensation and corporate governance.

Key Dates

Keywords

proxy statement, annual meeting, executive compensation, directors, corporate governance, Tax Receivable Agreement, related person transactions, Ernst & Young, stockholders, NuScale Power