(Adds shares in paragraph 2, details from the release and background in paragraphs 5 to 10)
June 22 (Reuters) - NRG Energy increased its share repurchase program by $1.7 billion on Thursday, as the U.S. utility firm faces pressure from activist investor Elliott Investment for a strategic overhaul.
Shares in NRG, which also announced a new plan to cut costs, rose 3.3% to $35 in premarket trading.
Elliott disclosed a more than 13% economic interest in NRG last month, and called for strategic changes at the company including a boardroom overhaul, its second such attempt in six years.
The investor had asked NRG to undertake cost cuts worth $500 million, and pushed for a strategic review to refocus the company on its core business of supplying power.
Elliott also called NRG's $2.8 billion acquisition of Vivint Smart Home "the single worst deal in the power and utilities sector in the past decade."
NRG, which boosted its stock buyback program to $2.7 billion, announced a further $150 million in cost cuts by 2025.
"These savings are in addition to $300 million in Direct Energy cost synergies that are expected to be completed by the end of 2023 and $100 million in cost synergies related to the Vivint acquisition that are expected to be completed by 2025," NRG said in a statement.
The company also added it would allocate 80% of its excess cash for shareholder returns, once it reduces its debt. The company expects 7% to 9% growth in long-term annual dividend per share.
Elliott has also pressured NRG to oust CEO Mauricio Gutierrez and was in talks with potential candidates to replace him, the Wall Street Journal reported on Wednesday.
In a statement to Reuters, an NRG spokesperson said that the company's board "fully supports" Gutierrez and the management team. (Reporting by Sourasis Bose and Tanay Dhumal in Bengaluru Editing by Vinay Dwivedi)
