By Tim McLaughlin
(Reuters) -Vistra CEO James Burke stands to receive about $340 million for helping lift the Texas-based utility from the ashes of bankruptcy nearly a decade ago to become the hottest power producer in the United States.
Vistra shares have returned about 450% since January 1, 2024, outpacing the S&P 500’s 42% gain tenfold.
During that time, the value of Burke’s vested stock-based pay has soared to about $340 million from $43 million, according to a Reuters analysis of stock option and restricted share grants since 2016.
This month, Burke has exercised some of those options, realizing more than $35 million in gross proceeds, company disclosures show.
Vistra did not return messages seeking comment.
Burke oversees a fleet of coal, gas and nuclear power plants occupying a dominant position in the U.S. markets most desperate for electricity during peak demand hours.
After two decades of stagnation, electricity demand is surging in Texas and the PJM Interconnection that covers the densely populated mid-Atlantic region, driven in part by a boom cycle of artificial intelligence-fueled data center construction.
U.S. President Donald Trump’s retreat from renewables boosts Vistra’s edge in the unregulated power market, according to Tim Winter, a portfolio manager of The Gabelli Utilities Fund.
The Trump administration on Thursday launched an effort to speed development of power plants and transmission lines, even as it orders fossil fuel plants set to shut for good to keep operating.
In May, Burke and Vistra bet more on fossil fuels, agreeing to buy seven gas-fired power plants from Lotus Infrastructure Partners for $1.9 billion, furthering its foothold in the PJM market, where the electric grid is straining to keep pace with AI-driven electricity demand.
Tanner James, a stock analyst at Jefferies, estimates Vistra will generate an operating profit of $7.4 billion next year, a 31% increase over the company’s results in 2024.
Turbocharging that profit forecast for Vistra is PJM’s July energy auction to cover electricity needs on peak demand days. Vistra and other power producers stand to collect $329 a megawatt day, a roughly 1,000% jump from two years ago.
In 2014, Vistra’s predecessor company, TCEH Corp, landed in Chapter 11 bankruptcy with about $42 billion in debt. The collapse was emblematic of the go-for-broke mentality of highly leveraged independent power producers chasing energy boom cycles.
But Vistra emerged from bankruptcy in 2016 with almost no debt. A veteran senior executive of the company, Burke worked alongside then-CEO Curt Morgan to make sure the company did not squander its fresh start.
Burke received stock options and restricted stock in 2016 with an estimated value of $4 million, according to disclosures with the U.S. Securities and Exchange Commission.
Today, that stock-based pay is alone worth about $108 million with Vistra shares trading around $210 each, according to the Reuters analysis.
Burke became Vistra’s CEO in 2022, taking the reins from Morgan, whom he helped transform Vistra from a single-state power company heavily reliant on coal, into a diversified national supplier with 40 gigawatts (GW) of generation. A gigawatt is enough power for about one million U.S. homes.
“They expanded into the eastern part of the United states, but it wasn’t clear there would be much growth there,” said Travis Miller, a utility stock analyst for Morningstar. “It’s definitely turned out to be a good move, though it didn’t look that way at the time.”
Last year, Vistra completed its acquisition of Energy Harbor Corp, a $6.8 billion deal that added 4 GW of nuclear capacity and about 1 million retail customers.
As Gabelli’s Winter explained in a July research note, most of the country’s nearly 100 nuclear reactors are owned by regulated utilities. That leaves unregulated Vistra in a prime spot to offer its nuclear generation from the Comanche Peak plant in Texas, for example, to data center hyperscalers.
“Google is viewed as the most likely partner due to its limited existing data center footprint in Texas,” Jefferies analyst Tanner James said in an August research note.
(Reporting by Tim McLaughlin in Boston; Editing by Marguerita Choy)
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