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Changes in Capital Structure
 9 Months Ended
Sep. 30, 2023
Equity [Abstract]  
Changes in Capital Structure Changes in Capital Structure
As of September 30, 2023 and December 31, 2022, the Company had 10,000,000 shares of preferred stock authorized and 500,000,000 shares of common stock authorized. The following table reflects the changes in NRG's preferred and common stock issued and outstanding:
PreferredCommon
Issued and OutstandingIssuedTreasuryOutstanding
Balance as of December 31, 2022— 423,897,001 (194,335,971)229,561,030 
Shares issued under LTIPs— 1,011,448 — 1,011,448 
Shares issued under ESPP— — 86,516 86,516 
Issuance of Series A Preferred Stock 650,000 — — — 
Shares repurchased — — (1,322,141)(1,322,141)
Balance as of September 30, 2023650,000 424,908,449 (195,571,596)229,336,853 
Shares issued under LTIPs— 55,507 — 55,507 
Shares issued under ESPP— — 104,733 104,733 
Shares repurchased— — (3,732,657)(3,732,657)
Balance as of October 31, 2023
650,000 424,963,956 (199,199,520)225,764,436 
Common Stock
Share Repurchases
In June 2023, NRG revised its long-term capital allocation policy to target allocating approximately 80% of cash available for allocation, after debt reduction, to be returned to shareholders. As part of the revised capital allocation framework, the Company announced an increase to its share repurchase authorization to $2.7 billion, to be executed through 2025. During the three months ended September 30, 2023, the Company completed $50 million of share repurchases at an average price of $37.82 under the $2.7 billion authorization. Through October 31, 2023, an additional $150 million of share repurchases were executed at an average price of $40.17 per share.
Employee Stock Purchase Plan
The Company offers participation in the ESPP which allows eligible employees to elect to withhold between 1% and 10% of their eligible compensation to purchase shares of NRG common stock at the lesser of 90% of its market value on the offering date or 90% of the fair market value on the exercise date. An offering date occurs each April 1 and October 1. An exercise date occurs each September 30 and March 31. On April 27, 2023, NRG stockholders approved the adoption of the Amended and Restated Employee Stock Purchase Plan, effective April 1, 2023, which included a reduction in the price at which eligible employees may purchase shares of NRG common stock from 95% to 90% of the fair market value of the shares on the applicable date. NRG stockholders also approved an increase of 4,400,000 shares available for the issuance under the ESPP.
NRG Common Stock Dividends
During the first quarter of 2023, NRG increased the annual dividend to $1.51 from $1.40 per share and expects to target an annual dividend growth rate of 7%-9% per share in subsequent years. A quarterly dividend of $0.3775 per share was paid on the Company's common stock during the three months ended September 30, 2023. On October 19, 2023, NRG declared a quarterly dividend on the Company's common stock of $0.3775 per share, payable on November 15, 2023 to stockholders of record as of November 1, 2023. Beginning in the first quarter of 2024, NRG will increase the annual dividend by 8% to $1.63 per share.
The Company's common stock dividends are subject to available capital, market conditions, and compliance with associated laws, regulations and other contractual obligations.
Preferred Stock
Series A Preferred Stock
On March 9, 2023 ("Series A Issuance Date"), the Company issued 650,000 shares of 10.25% Series A Fixed-Rate Reset Cumulative Redeemable Perpetual Preferred Stock ("Series A Preferred Stock"). The net proceeds of $635 million, net of issuance costs, were used to partially fund the Vivint Smart Home acquisition.
The Series A Preferred Stock is not convertible into or exchangeable for any other securities or property and has limited voting rights. The Series A Preferred Stock may be redeemed, in whole or in part, on one or more occasions, at the option of the
Company at any time after March 15, 2028 ("Series A First Reset Date") and in certain other circumstances prior to the Series A First Reset Date. The Series A Preferred Stock has a liquidation preference of $1,000 per share, plus accumulated but unpaid dividends.
Series A Preferred Stock Dividends
The annual dividend rate on each share of Series A Preferred Stock is 10.25% from the Series A Issuance Date to, but excluding the Series A First Reset Date. On and after the Series A First Reset Date, the dividend rate on each share of Series A Preferred Stock shall equal the five-year U.S. Treasury rate as of the most recent reset dividend determination date (subject to a floor of 1.00%), plus a spread of 5.92% per annum. Cumulative cash dividends on the Series A Preferred Stock are payable semiannually, in arrears, on each March 15 and September 15, when, as and if declared by the board of directors. In September 2023, the Company paid a semi-annual dividend of $52.96 per share on its outstanding Series A Preferred Stock, totaling $34 million.