Whether or not you will be able to attend the 2019 Annual Meeting,

please vote your shares promptly so that you may be represented at the meeting.

Why did I only receive one set of materials when there is more than one stockholder at my address?

If two or more stockholders share one address, each such stockholder may not receive a separate copy of our Annual Report or Proxy Statement. Stockholders who do not receive a separate copy of our Annual Report or Proxy Statement and want to receive a separate copy may request to receive a separate copy of, or additional copies of, our Annual Report or Proxy Statement via the internet, email or telephone as outlined herein. Stockholders who share an address and receive multiple copies of our Annual Report or Proxy Statement may also request to receive a single copy by following the instructions above.

What is the quorum requirement for the 2019 Annual Meeting?

The presence in person or by proxy of the holders of a majority of the shares of the Company’s Common Stock entitled to vote shall constitute a quorum necessary to transact business at the 2019 Annual Meeting.

Where is the 2019 Annual Meeting?

The 2019 Annual Meeting will be held at the Company’s corporate offices, located at 6555 Sierra Drive, Irving, Texas 75039.

What is the record date?

The close of business on April 15, 2019 has been fixed as the time as of which stockholders entitled to notice of, and to vote with respect to, the 2019 Annual Meeting and any adjournments thereof shall be determined. At such date, there were outstanding and entitled to vote 483,310,080 shares of Company common stock, par value $0.01 per share (the “Common Stock”). Each share of Common Stock is entitled to one vote on all matters submitted to a vote of the stockholders at the 2019 Annual Meeting.

What is the difference between holding shares as a stockholder of record and as a beneficial owner of shares held in street name?

If I am a stockholder of record of Vistra Energy’s shares, how do I vote?

If you are a stockholder of record you may vote by proxy over the internet by following the instructions provided in this Proxy Statement, by telephone, or, if you received printed copies of the proxy materials, you may also vote by mail. You may also vote at the 2019 Annual Meeting through the link www.proxypush.com/VST or by telephone at 1-866-829-5001. The Control Number provided on your Notice or proxy card is necessary to access this site. Please vote as soon as possible.

If I am a beneficial owner of shares held in street name, how do I vote?

If you are a beneficial owner of shares held in street name, please refer to the proxy card, or voting information form forwarded to you by your broker or other nominee to see what voting options are available to you. Please vote as soon as possible.

What happens if I do not give specific voting instructions?

Stockholder of Record. If you are a stockholder of record and you:

Beneficial Owner of Shares Held in Street Name; “Broker Non-Votes.” If you are a beneficial owner of shares held in street name and do not provide the organization that holds your shares with specific voting instructions, under the rules of the New York Stock Exchange (“NYSE”), the organization that holds your shares may generally vote on routine matters but cannot vote on non-routine matters. If the organization that holds your shares does not receive instructions from you on how to vote your shares on a non-routine matter, the organization that holds your shares will inform our Inspector of Election that it does not have the authority to vote on this matter with respect to your shares. This is generally referred to as a “broker non-vote.” When our Inspector of Election tabulates the votes for any particular matter, broker non-votes will be counted for purposes of determining whether a quorum is present for that matter, but will not otherwise be counted.

For example, please note that brokers may not vote your shares on the election of directors, the proposal regarding named executive officer compensation or the proposal regarding proposed amendment to the 2016 Incentive Plan in the absence of your specific instructions as to how to vote. Please provide your broker with voting instructions as soon as possible so that your vote can be counted. We encourage you to provide voting instructions to the organization that holds your shares by carefully following the instructions provided in this Proxy Statement.

Which ballot measures are considered “routine” or “non-routine”?

Proposal 4 (Ratification of Appointment of Independent Registered Public Accountants) involves a matter that we believe will be considered routine.

Proposal 1 (Election of Directors), Proposal 2 (Approval of Compensation of the Named Executive Officers) and Proposal 3 (Approval of Amendment to Company’s 2016 Incentive Plan) involve matters that we believe will be considered non-routine.

How are abstentions and broker non-votes treated?

For the purpose of determining whether a quorum is present, abstentions and broker non-votes shall be counted in determining the number of outstanding shares represented in person (through internet access) or by proxy for each matter.

For each “non-routine” proposal, including whether the stockholders have elected the four director nominees, broker non-votes are not counted for any purpose. Please note that brokers may not vote your shares on the election of directors, the proposal regarding the proposed amendment to the 2016 Amendment Plan in the absence of your specific instructions as to how to vote. Please provide your broker with voting instructions as soon as possible so that your vote can be counted. You cannot abstain in the election of directors—you can only vote FOR the director nominees or WITHHOLD VOTES for such nominees.

For each proposal other than the election of directors and amendment of the Company’s 2016 Incentive Plan, an abstention will have the same effect as a vote AGAINST such proposal.

What is the voting requirement to approve each of the proposals?

The following table sets forth the voting requirement with respect to each of the proposals:

May I change my vote after I have voted?

You may revoke your proxy and change your vote at any time before the final vote at the 2019 Annual Meeting by:

In the absence of a revocation, shares represented by proxies will be voted at the 2019 Annual Meeting.

Is my vote confidential?

Proxy instructions, ballots and voting tabulations that identify individual stockholders are handled in a manner that protects your voting privacy. Your vote will not be disclosed either within Vistra Energy or to third parties, except:

Who will count votes at the 2019 Annual Meeting?

We have retained Mediant Communications, Inc. (“Mediant”), located at 400 Regency Forest Drive, Suite 200, Cary, North Carolina 27518, to assist as master tabulator and inspector of election for a fee of approximately $17,500, plus out-of-pocket expenses.

Who is paying the cost of this proxy solicitation?

We will bear the cost of soliciting proxies. Proxies may be solicited by mail or facsimile, or by our directors, officers or employees, without extra compensation, in person or by telephone. We have retained D.F. King & Co., Inc. to assist in the solicitation of proxies in connection with the 2019 Annual Meeting. The Company will pay such firm customary fees, expected to be no more than $9,000, plus reasonable out-of-pocket expenses. In addition, if requested, we will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding solicitation material to the beneficial owners of our Common Stock.

What if I have questions about the proposals?

Questions concerning the proposals to be acted upon at the 2019 Annual Meeting should be directed to:

Vistra Energy Corp.

Attention: Corporate Secretary

6555 Sierra Drive

Irving, Texas 75039

How can I find out if I am a stockholder of record entitled to vote?

For a period of at least ten days before the 2019 Annual Meeting, a complete list of stockholders of record entitled to vote at the 2019 Annual Meeting will be available during ordinary business hours at our principal executive office, 6555 Sierra Drive, Irving, Texas 75039, for inspection by stockholders of record for proper purposes. The list of stockholders will also be available at the 2019 Annual Meeting through the link www.proxypush.com/VST or by telephone at 1-866-829-5001. The Control Number provided on as part of these proxy materials is necessary to access this site.

Who will serve as inspector of election?

The inspector of election will be Mediant.

Where can I find the voting results of the 2019 Annual Meeting?

We will publish final voting results in our Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission (“SEC”) and made available on our website at www.sec.gov within four business days of the 2019 Annual Meeting.

REFERENCES TO VISTRA ENERGY AND COMMON STOCK

Unless otherwise indicated, references to “Vistra Energy,” the “Company,” “we,” “our,” and “us” in the biographical and compensation information for directors and executive officers below refers to Board membership, employment and compensation with respect to Vistra Energy Corp.

STOCKHOLDERS’ PROPOSALS FOR THE 2020 ANNUAL MEETING

If a stockholder wants us to include a proposal in our proxy statement and form of proxy for presentation at the 2020 annual meeting of stockholders (the “2020 Annual Meeting”), under the rules of the SEC, the proposal must be received by the Corporate Secretary of the Company at 6555 Sierra Drive, Irving, Texas 75039 on or before the close of business on December 27, 2019 (the 120^th day before the one-year anniversary date of the release of these proxy materials to stockholders).

The Company’s restated bylaws require advance notice for any business to be brought before a meeting of stockholders. For business, including director nominations, to be properly brought before the 2020 Annual Meeting by a stockholder, written notice of the stockholder proposal must be received by the Corporate Secretary of the Company at 6555 Sierra Drive, Irving, Texas 75039 between January 21, 2020 (not earlier than the 120^th day before the one-year anniversary date of the 2019 Annual Meeting) and February 20, 2020 (not later than the 90^th day before the one-year anniversary date of the 2019 Annual Meeting). The stockholder’s notice to the Corporate Secretary must contain a brief description of the business to be brought before the 2020 Annual Meeting and the reasons for conducting such business at the meeting, as well as certain other information. Additional information concerning the advance notice requirement may be obtained from the Corporate Secretary of the Company at the address provided above or on the Company’s website.

INCORPORATION BY REFERENCE

To the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act of 1933 (as amended, the “Securities Act”), or the Securities Exchange Act of 1934 (as amended, the “Exchange Act”), the sections of this proxy statement entitled “Compensation Committee Report” and “Audit Committee Report” will not be deemed incorporated unless specifically provided otherwise in such filing, to the extent permitted by the rules of the SEC. Information contained on or connected to our web site is not incorporated by reference into this Proxy Statement and should not be considered part of this Proxy Statement or any other filing that we make with the SEC.

This summary is included to provide an introduction and overview of the information contained in this Proxy Statement. This is a summary only and does not contain all of the information we have included in our 2019 Proxy Statement. You should refer to the full Proxy Statement for more information about us and the proposals you are being asked to consider.

CORPORATE GOVERNANCE HIGHLIGHTS

Our corporate governance policies and structures include the following practices:

DIRECTOR EXPERTISE

Our Directors collectively represent an extensive and diverse mix of skills, knowledge and experiences that are well-suited to our business.

PROPOSALS FOR STOCKHOLDER ACTION

ANNUAL MEETING INFORMATION

Executive Officers

The following table and biographies sets forth information regarding our current executive officers as of the date hereof, except for Mr. Morgan, whose information is listed above. Ages are as of April 25, 2019.

marketing, commodities, risk management, strategic planning, legal, corporate governance and board service, executive management, regulatory and policy development, accounting and finance, and operations. For information concerning each director’s various qualifications, attributes, skills and experience of our director nominees considered important by the Board in determining that such nominee should serve as a director as well as each nominee’s principal occupation, directorships and additional biographical information, please read the section entitled “Directors” beginning on page 10 above and “Proposal 1—Election of Directors—Information on Director Nominees” on page 20.

Director Selection Process

Our Certificate of Incorporation provides that the number of our directors shall be fixed from time to time exclusively by the Board. The Board has fixed the number of our directors currently at eleven, subject to adjustment by the Board in accordance with our Certificate of Incorporation. The Board has been divided into three classes. At each annual meeting of stockholders, one class of directors will be elected to serve a three-year term. Directors are elected by plurality of the votes cast at the meeting. This means that, at the 2019 Annual Meeting, the four individuals nominated for election to the Board who receive the most FOR votes among votes properly cast in person, through internet or phone access, or by proxy will be elected to serve on the Board for a term that will expire at the 2022 Annual Meeting. Each holder of our Common Stock is entitled to one vote for each share held and no such holder has cumulative voting rights.

The Nominating and Governance Committee of the Board is responsible for identifying individuals qualified to become Board members and recommending to the Board the nominees for election as directors of the Company. The Nominating and Governance Committee’s policy is to consider recommendations for such director nominees, including those submitted by current directors, members of management or by stockholders, on the bases described below. In this regard, stockholders may recommend director nominees by writing to the Nominating and Governance Committee c/o the Corporate Secretary of the Company, 6555 Sierra Drive, Irving, Texas 75039. Any such recommendations from stockholders received by the Corporate Secretary of the Company will be promptly provided to the Nominating and Governance Committee. Recommendations to be considered by the Nominating and Governance Committee for inclusion in the Company’s proxy for the 2020 Annual Meeting must be received by the Corporate Secretary of the Company not later than the close of business on December 27, 2019.

The Nominating and Governance Committee reviews annually the composition of the Board as a whole and recommends, if necessary, measures to be taken so that the Board reflects the appropriate balance of knowledge, experience, skills, expertise and diversity required for the Board as a whole and contains at least the minimum number of independent directors required by applicable laws and regulations.

The Nominating and Governance Committee identifies director nominees in various ways. In identifying and evaluating director nominees, the Nominating and Governance Committee may consult with members of the Board, Company management, consultants, and other individuals likely to possess an understanding of the Company’s business and knowledge of suitable candidates. The Nominating and Governance Committee considers the current directors who have expressed an interest in and who continue to satisfy the criteria for serving on the Board as set forth in our Corporate Governance Guidelines. In making its recommendations, the Nominating and Governance Committee assesses the requisite skills and qualifications of director nominees and the composition of the Board as a whole in the context of the Board’s criteria and needs, and, in furtherance of this goal, proposing the nomination of directors for purposes of obtaining the appropriate members and skills. Such assessments will be consistent with the Board’s criteria for membership, including: (i) not less than a majority of directors shall satisfy the NYSE independence requirements; (ii) all directors shall possess strong judgment, character, expertise, skills and knowledge useful to the oversight of the Company’s business; diversity of experience and viewpoints; business, governmental, civic or other relevant experience; and (iii) consideration will be given to the extent to which the interplay of the director nominee’s qualifications with those of other Board members will build a Board that is effective, in light of the Company’s business and structure.

Identification of Candidates and Diversity

In identifying and evaluating director nominees, the Nominating and Governance Committee may consult with members of the Board, Company management, consultants, and other individuals likely to possess an understanding of the

Company’s business and knowledge of suitable candidates. In making its recommendations, the Nominating and Governance Committee assesses the requisite skills and qualifications of director nominees and the composition of the Board as a whole in the context of the Board’s criteria and needs. Such assessments will be consistent with the Board’s criteria for membership, including: (i) not less than a majority of directors shall satisfy the NYSE independence requirements; (ii) all directors shall possess strong judgment, character, expertise, skills and knowledge useful to the oversight of the Company’s business; business, governmental, civic or other relevant experience; and (iii) consideration will be given to the extent to which the interplay of the director nominee’s qualifications and diversity of cultural background, gender, experience and viewpoints with those of other Board members will build a Board that is effective, in light of the Company’s business and structure. The Nominating and Governance Committee does not assign specific weights to particular criteria and no particular criterion is necessarily applicable to all Board members. While the Company does not have a formal diversity policy, the Nominating and Governance Committee will consider diversity criteria in the context of the perceived needs of the Board as a whole and seek to achieve a diversity of backgrounds and perspectives on the Board.

2018 Board Evaluation Process

The Board recognizes that a rigorous evaluation process is an essential component of strong corporate governance practices and promoting ongoing Board effectiveness. Consistent with best practice, the Company’s Corporate Governance Guidelines and each of the Committees’ Charters, the Nominating and Governance Committee oversees the annual evaluation of the performance of the Board and the Committees, with the Chairman maintaining a substantial role in facilitating discussion among the Board and the Committees.

As part of the Board evaluation process, the Board reviews the following:

Additionally, the Board reviews its meeting schedule, the quality and depth of information presented at each meeting, and the organization and operation of the Board and the Committees. The Committees are evaluated on their effectiveness in fulfilling delegated responsibilities, the appropriateness of Committee materials, and the sufficiency of time to deliberate and for robust discussion. The Board and Committee evaluation framework and process is conducted and reviewed annually.

As part of the two-part annual evaluation process involving the full Board evaluation and Committee evaluations, the Board responds to a comprehensive written questionnaire designed to provide a holistic evaluation of the performance of the Board and each Committee in light of the current needs of the Board and the Company. In 2018, 100% of directors participated in the evaluation process. To protect anonymity and the integrity of the evaluation process, an independent third party (the Company’s outside counsel) compiles responses to these evaluations into a report, which is initially provided to the Chairman. The Chairman is provided ample time to further discuss the results with the Company’s outside counsel. The report, including evaluation results and specific areas of focus for each Committee and the Board itself, is then presented to the full Board in executive session to encourage candid discussion and feedback, and specific areas are discussed where the Board would like to focus to enhance its effectiveness.

After receiving feedback from the Chairman on any action items resulting from the Board discussion, the Corporate Secretary utilizes the results of the evaluations and discussions when developing workplans, formulating succession plans, and preparing board candidate evaluations for the upcoming year and thereafter. In connection with its 2017 evaluation, the Board conducted an assessment of whether the Board had an appropriate committee structure and

appropriate delegation to fulfill responsibilities efficiently. As a direct result of the 2017 evaluations, the Board approved the formation of the Risk Committee in order to (i) better address enterprise risk assessment and management after the Dynegy merger and (ii) assess certain enterprise risks and market, commercial and risk management matters of the Company, and the Risk Committee had its first meeting as a committee in July 2018. Additionally, the 2018 evaluation process has further informed Board and committee composition, which includes evolution of the director skills and experience qualifications to meet the current and anticipated needs of the business.

CORPORATE GOVERNANCE OVERVIEW

CORPORATE GOVERNANCE GUIDELINES

Our Corporate Governance Guidelines govern the qualifications and conduct of the Board. The Corporate Governance Guidelines address, among other things:

CORPORATE GOVERNANCE PRACTICES

The Board proactively seeks to identify and implement leading governance practices. Furthermore, the Board follows a series of governance practices that it believes foster effective Board oversight and accountability to you, our stockholders. These practices include:

CORPORATE GOVERNANCE DOCUMENTS

The Company maintains certain corporate governance documents on our website at www.vistraenergy.com. The Company’s Corporate Governance Guidelines and charters of the standing committees of the Board, including the Audit Committee, the Nominating and Governance Committee, the Compensation Committee, and the Risk Committee, in each case as currently in effect, can be accessed by selecting the tab labeled “Corporate Governance” on the home page of the Company’s website.

The Company’s Code of Conduct that applies to the Company’s employees, officers, including the CEO and CFO, and directors, is also available on the Company’s website. In accordance with SEC regulations, any amendments to the Code of Conduct will be posted on the Company’s website.

The Board has adopted a written policy regarding transactions with related parties, which is included in the Corporate Governance Guidelines available on the Company’s website.

Printed copies of the corporate governance documents that are posted on the Company’s website are also available to any stockholder upon request to the Corporate Secretary of the Company, 6555 Sierra Drive, Irving, Texas 75039.

MEETINGS OF THE BOARD AND ITS COMMITTEES

The standing committees of the Board and the membership of each committee are shown below. The Board has adopted a written charter for each standing committee. These charters are maintained on the Company’s website at www.vistraenergy.com.

Meeting Attendance

In 2018, the directors collectively attended a total of 96% of the meetings of the Board and the Committees on which they serve. In 2018, the Board held a total of ten meetings and each director attended at least 80% of the meetings held. Non-management directors meet regularly in executive session and Mr. Helm presides over those executive sessions.

As detailed in our Corporate Governance Guidelines, Board members are expected to attend each annual meeting of stockholders absent unusual circumstances. Seven of ten directors were in attendance at the 2018 annual meeting of stockholders.

Committee Membership, Independence, and Qualifications

The current membership of the Committees of the Board is shown in the table below.

Board Committees

The Board has the following four standing Committees: Audit, Compensation, Nominating and Governance and Risk (each, a “Committee”). The membership and the functions of each Committee are described below. Each of the Committees has adopted a charter that describes each such Committee’s roles and responsibilities. The charters of all of the Committees are available on the “Corporate Governance” section of the Company’s website at www.vistraenergy.com/corporate-governance/.

Audit Committee

Members: Brian K. Ferraioli (Chair), John R. Sult, and Bruce E. Zimmerman

Audit Committee Financial Experts: All members

Independence: All members

Primary Responsibilities: Appoints, retains, oversees, evaluates and compensates the independent auditors; reviews the annual audited and quarterly consolidated financial statements; reviews significant matters regarding accounting principles and financial statement presentations; oversees the system, and annual audit, of internal controls over financial reporting, accounting, legal compliance and ethics.

The Audit Committee is a separately designated standing audit committee as required by SEC regulations and NYSE rules. The Board has determined that Messrs. Ferraioli, Sult and Zimmerman are independent as such term is defined

in the NYSE rules and as required by Rule 10A-3 of the Exchange Act. The Board has determined that each member of the Audit Committee possesses the necessary level of financial literacy required to enable him to serve effectively as an Audit Committee member. No Audit Committee member serves on more than three audit committees of public companies, including the Audit Committee. The Audit Committee oversees (i) the quality and integrity of the financial statements of the Company; (ii) the Company’s financial reporting processes and financial statement and internal control audits; (iii) the independent registered public accountant’s qualifications and independence; (iv) the performance of the Company’s internal audit function and independent registered public accountant; and (v) the Company’s system, and annual audit, of internal controls over financial reporting, accounting, legal compliance and ethics, including the effectiveness of disclosure controls and controls over processes that could have a significant impact on the Company’s financial statements.

Nominating and Governance Committee

Members: Paul M. Barbas (added as Committee member in February 2019), Cyrus Madon, and Geoffrey D. Strong

Independence: All members

Primary Responsibilities: Reviews and recommends director candidates to the Board for election at each annual meeting of stockholders, periodically reviews the Corporate Governance Guidelines and committee charters and recommends changes to the Board, reviews and recommends committee composition and chairpersons and recommends changes to the Board, and provides guidance to the Board with respect to governance related matters.

The Nominating and Governance Committee (i) identifies individuals qualified to become directors and recommends to the Board the nominees to stand for election as directors; (ii) oversees, and assumes a leadership role in, the governance of the Company including recommending periodic updates to the Corporate Governance Guidelines for the Board’s consideration; (iii) participates with the Chairman in the Board’s annual evaluation of its performance and of the Committees; and (iv) recommends to the Board the director nominees for each annual stockholder meeting and for each Committee.

Compensation Committee

Members: Gavin R. Baiera (Chair), Paul M. Barbas, and Jeff D. Hunter (added as Committee Member in February 2019)

Independence: All members

Primary Responsibilities: Reviews and oversees the Company’s overall compensation philosophy, and oversees the development and implementation of compensation programs, policies and programs aligned with the Company’s business strategy.

The Compensation Committee (i) reviews and approves corporate goals and objectives relevant to the compensation of the CEO, evaluates the CEO’s performance in light of those goals and objectives, and determines and recommends to the Board the CEO’s compensation based on this evaluation; (ii) oversees the evaluation of executive officers (and other senior officers and key employees) other than the CEO and reviews, determines and approves their compensation levels; (iii) oversees and makes recommendations to the Board with respect to the adoption, amendment or termination of incentive compensation, equity-based and other executive compensation and benefits plans, policies and practices; (iv) reviews and discusses with the Board executive management succession planning; (v) makes recommendations to the Board with respect to the compensation of the Company’s outside directors; and (vi) produces the Compensation Committee’s report on executive compensation as required by the SEC to be included in the Company’s annual proxy statement.

Risk Committee

Members: Hilary E. Ackermann (Chair), Jeff D. Hunter, and John R. Sult

Independence: All members

Primary Responsibilities: Assists the Board in fulfilling its responsibilities with respect to (i) the oversight of the enterprise risk management process, including coordination, where necessary, with other Committees, (ii) assess certain enterprise risks, and (iii) review and assess market, commercial and risk management matters of the Company.

In July 2018, the Board approved the formation of the Risk Committee. The Risk Committee’s oversight includes: (i) review and discussion with management the Company’s enterprise risk assessment and management’s process for the identification, evaluation and mitigation of enterprise risks; (ii) review of market conditions where the Company operates, including current and forward commodity prices as compared to management’s point of view; (iii) review of the Company’s commercial risk management objectives; (iv) review of the key commercial risk policies on establishment of risk limits, tolerances and assumptions; (v) review of reports on adherence to established limits and the steps management has taken to monitor and mitigate risk exposure; (vi) review of reports from management and provides feedback on credit, market and liquidity risks the Company faces, the exposure in each category, significant concentrations within those risk categories, the metrics used to monitor the exposures and management’s view on the acceptable and appropriate levels of those risk exposures; (vii) review and assessment of the company’s risk, market and liquidity risk management frameworks, including significant policies processes and systems that management uses to manage risk exposures and (vii)  review of the credit risk of the Company’s counterparties.

COMMUNICATIONS WITH DIRECTORS

Stockholders and other interested parties may communicate with the directors, including all non-management or independent directors, by writing to them c/o the Corporate Secretary of the Company, 6555 Sierra Drive, Irving, Texas 75039.

DIRECTOR INDEPENDENCE

In order for a director to be considered independent under NYSE regulations, the Board must determine that such director has no material relationship with the Company, either directly, or as a partner, stockholder or officer of an organization that has such a relationship. To assist it in its determinations regarding the independence of its members, the Board utilizes the following categorical standards, which reflect and give effect to the independence requirements of the NYSE:

For purposes of these standards, an “immediate family member” includes a person’s spouse, parents, children, siblings, mothers and fathers-in-law, sons and daughters-in-law, brothers and sisters-in-law, and anyone (other than domestic employees) who shares such person’s home. The term “immediate family member” does not include stepchildren who do not share a stepparent’s home or the in-laws of such stepchildren. When applying the three-year look back provisions provided for in items 2 through 6 above, the Board will not consider individuals who are no longer immediate family members as a result of legal separation or divorce, or those who have died or become incapacitated. In addition, references to the “Company” in this “Director Independence” section include any subsidiary of the Company.

In addition to satisfying the above independence requirements, a director who serves as a member of the Audit Committee of the Board (the “Audit Committee”) may not (i) accept directly or indirectly any consulting, advisory or compensatory fee from the Company, other than in that director’s capacity as a member of the Board or any of the Committees or (ii) be an affiliated person of the Company apart from the affiliation occasioned by the director’s service as a member of the Board or any of the Committees. Compensatory fees do not include the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company provided that such compensation is not contingent in any way on continued service. A director would be deemed an affiliated person of the Company if that director, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company. The beneficial ownership of 10% or less of the voting equity stock of the Company does not constitute control for this purpose.

Based on the application of the foregoing standards and pursuant to the requirements of the NYSE and the SEC, the Board has determined that:

CODE OF CONDUCT

Our Code of Conduct applies to all of our directors, officers and employees. The key principles of this code include acting legally and ethically, notifying appropriate persons upon becoming aware of issues, obtaining confidential advice and dealing fairly with our stakeholders. A copy of our Code of Conduct is available on the Company’s website at www.vistraenergy.com/code-of-conduct/.

COMPLAINT AND REPORTING PROCEDURES FOR ACCOUNTING AND AUDITING MATTERS

Our Accounting, Internal Accounting Control, Auditing and Financial Complaints Policy (the “Whistleblower Policy”) provides for (1) the receipt, retention and treatment of complaints, reports and concerns regarding accounting, internal accounting controls or auditing matters, and (2) the confidential, anonymous submission of complaints, reports and concerns by employees regarding questionable accounting or auditing matters, in each case relating to Vistra Energy. Complaints may be made through a “Compliance Helpline” telephone number, operated by an independent third party. Complaints received are logged by our Chief Compliance Officer, investigated and reviewed by Internal Audit, and, if applicable, our Chief Compliance Officer, and communicated to our Audit Committee. In accordance with applicable law, the Whistleblower Policy and other procedures we use to address complaints prohibit us from taking adverse action against any person submitting a good faith complaint, report or concern.

BUSINESS RELATIONSHIPS AND RELATED PERSON TRANSACTIONS POLICY

As set forth in the Corporate Governance Guidelines, the Board has adopted a written policy relating to the approval of transactions with related parties. In general, for purposes of our policy, a related party transaction is a transaction to which we are a party, or a material amendment to any such transaction, and with respect to which a related party is directly, or to our knowledge, indirectly, a party. As set forth in our policy, a “related party” is an executive officer, director or nominee for director of ours, a person known to us to be the beneficial owner of more than 5% of our voting securities, an immediate family member of an executive officer, director, nominee for director or 5% stockholder, and any entity owned or controlled by any of the foregoing individuals or in which any such individual serves as an executive officer or general partner or, together with any other such individuals, owns 10% or more of the equity interests of such an entity.

Our policy requires that a related person transaction will only continue if: (i) the Audit Committee approves or ratifies the transaction in accordance with the policy (which requires that the transaction be on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party), (ii) the disinterested members of the Board as a whole review and approve the transaction or (iii) the transaction involves compensation approved by the Compensation Committee. In reviewing and approving any related party transaction or material amendments to any such transaction, the Audit Committee must satisfy itself that it has been fully informed as to the related party’s relationship and interest and as to the material facts of the transaction and must determine that the related party transaction is fair to us.

In November 2018, the disinterested members of the Board approved a share repurchase transaction, whereby Apollo Management Holdings L.P. (“Apollo”) and the Company, in a privately negotiated transaction, agreed for the Company to directly repurchase 5 million shares from Apollo. This purchase was part of Apollo’s larger, 17 million share block trade, with the remaining 12 million shares being sold in a separate unregistered Rule 144 secondary block trade to a broker-dealer, who placed all 12 million shares with institutional investors. The Company repurchased the 5 million shares at the same discounted price that the participating broker paid for the 12 million shares it purchased, and the Company did not pay any additional fees to the participating broker for the 5 million shares it repurchased.

Since January 1, 2018, all related party transactions have been approved or ratified by the Audit Committee or disinterested members of the Board in accordance with our policy. A copy of our related party transactions policy is included in our Corporate Governance Guidelines and is available on the Company’s website at www.vistraenergy.com/corporate-governance/.

CHARITABLE CONTRIBUTIONS

During 2018, we did not make any contributions to any charitable organization in which an independent director served as an executive officer in 2018.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires the Company’s directors, certain of the Company’s officers, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file with the SEC and the NYSE reports of ownership of Company securities and changes in reported ownership. Directors, affected officers, and greater than ten percent stockholders are required by SEC rules to furnish the Company with copies of all Section 16(a) reports they file. Based solely on a review of the reports furnished to the Company, or written representations from reporting persons that all reportable transaction were reported, the Company believes that during 2018 the Company’s directors, affected officers, and greater than ten percent owners timely filed all reports they were required to file under Section 16(a), except for one report for one transaction for Mr. James A. Burke which was late due to an administrative error.

BOARD RISK OVERSIGHT

In the normal course of business, the Company is exposed to a variety of risks. For a complete description of the risk factors associated with our business, see Part I, Item 1A “Risk Factors” of our 2018 Annual Report on Form 10-K, which is included in our Annual Report.

The Board has ultimate responsibility for protecting stockholder value. Among other things, the Board is ultimately responsible for understanding the risks to which we are exposed, approving management’s strategy to manage these risks, establishing policies and procedures that monitor and manage defined risks and measuring management’s performance against the strategy. The Committees, especially the Audit Committee and Risk Committee that was constituted in July 2018, play an important role in support of the Board’s oversight function. Risk oversight includes understanding the material risks to the business and what steps management is taking or should be taking to manage those risks, as well as understanding and determining the appropriate risk appetite for the Company. To define the Company’s risk appetite, the Board reviews and approves the annual business plan, budget and long-term plan, strategic initiatives, acquisitions and divestitures, capital markets transactions, financings, capital allocation and capital structure.

The Board conducts its risk oversight function in several ways. The Board monitors, reviews and responds to strategic, commercial, market, financial, strategic and corporate risks facing the Company by receiving periodic reports from the management team, and through the Committees. While the Committees each have their delegated responsibilities for identifying and addressing risks, the Board primarily conducts this oversight function through the Risk Committee, which oversees the enterprise risk management process and assesses certain enterprise risks and market, commercial and risk management matters, and the Audit Committee, which oversees risks relating to accounting, internal audit and controls. On a quarterly basis, the Risk Committee reviews an enterprise risk assessment and provides a report thereof to the Board. Additionally, on an annual basis, the Risk Committee provides, and the Board reviews, a detailed enterprise risk report. Further, the Board conducts periodic reviews of risks on an ongoing and as-needed basis and receives updates from management during the year on any particular matters relating to risk management or risk controls that management believes need to be brought to the attention of the Board.

The Board recognizes the importance of maintaining the trust and confidence of our customers and employees. To more effectively prevent, detect and respond to information security threats, the Company has a dedicated Chief Information Officer whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture and processes. The Board receives reports on, among other things, the Company’s cybersecurity risks and threats, the status of projects to strengthen the Company’s information security systems,

assessments of the Company’s security program and the emerging threat landscape. Additionally, the Board and Risk Committee monitor the ways in which the Company attempts to prudently minimize risks, to the extent reasonably practicable and consistent with the Company’s long-term strategies.

The table below summarizes the significant role the various Board Committees or similar bodies play in carrying out the risk oversight function.

The Chairs of each of the Committees regularly report to the Board on matters reviewed by their respective Committees, thereby providing the Board with the opportunity to identify and discuss any risk-related issues or request additional information from management or the Committees that may assist the Board in its risk oversight role. To this end, risk-related issues presented to the Committees are routinely presented to the full Board to ensure proper oversight.

Additionally, the Company has established a Nuclear Oversight Advisory Board (“NOAB”), which oversees and provides reports to the Board on an as-needed basis, but no less than annually, regarding various risks and strategic considerations related to our ownership and operation, directly or indirectly, of interests in our Comanche Peak nuclear power plant. Mr. Morgan serves as a member of the NOAB.

Furthermore, the Company has a Risk Management Policy, which is overseen by the Chief Risk Officer, who oversees various risk management efforts and regularly reports to the Risk Committee regarding enterprise risk management and assessment matters. As part of the Risk Management Policy, the Company maintains a Risk Management Committee whose role is to measure and monitor compliance with the Risk Management Policy, and its membership is comprised of various executives from key management positions, namely the CEO, CFO, Chief Compliance Officer, Chief Operating Officer, Chief Commercial Officer, Chief Risk Officer, President of Retail, Controller, Treasurer, Senior Vice President of Corporate Development and Strategy and Vice President of Regulatory Trading and Generation. The Risk Management Policy establish guidelines necessary for the Company to effectively manage the market, credit, operative and regulatory risk of its Portfolio.

As outlined in our Risk Management Policy, the Board has established relevant delegation of authority thresholds, which together with our Code of Conduct, and other support relationships with members of the External Affairs, Internal Audit, Legal, Human Resources, Technology Services, and Compliance teams, are complementary and critical to the risk management process. In particular, the Board has delegated certain authority, subject to various term/tenor and dollar value thresholds as set forth in the Company’s Commitment Policy, to the Company’s Commitments Committee to review, and where appropriate, approve certain transactions that were not otherwise approved by the Board, including its approval of the Company’s annual plan and budget. The Commitments Committee is comprised of the Company’s CEO, CFO, Chief Operating Officer, Senior Vice President of Corporate Development and Strategy, Chief

Administrative Officer, and General Counsel. The Board periodically reviews and revises the delegation of authority thresholds to appropriately balance business needs and its oversight function.

Executive Compensation and Oversight of Risks Related to Compensation Policies

During 2018, the Compensation Committee of the Board (the “Compensation Committee”) consisted of two directors: Messrs. Gavin R. Baiera and Paul M. Barbas. In February 2019, the Board appointed Mr. Jeff D. Hunter as a third member of the Compensation Committee. The primary responsibilities of the Compensation Committee are to:

As described above, the Compensation Committee is responsible for overseeing risks related to our compensation policies and practices. To assist the Compensation Committee with determining whether the Company’s compensation policies and practices subject the Company to unnecessary risk or could potentially motivate employees to take excessive risk, the Compensation Committee periodically evaluates, including seeking input from management and our independent compensation consultant, our compensation strategy in order to ensure:

Compensation of Directors

On May 1, 2018, the Compensation Committee recommended, and the Board approved, certain increases to director compensation to reflect the additional scale of the combined company after the Dynegy merger and the accompanying increase in the complexity of responsibilities of Board members, chairpersons and committee members. As of May 1, 2018, except for each chairperson (whose cash compensation is described below), each non-employee member of the Board receives an annual board retainer of $100,000 (increased from $80,000) and an annual committee retainer (per Committee) of $10,000 (decreased from $15,000, regardless of number of Committees served). The Chairman receives an annual board retainer of $190,000 (increased from $150,000). The Chair of the Audit Committee receives an annual board retainer of $100,000 (increased from $90,000) and an annual committee retainer of $20,000 (decreased from $25,000). The Chairs of other Committees (besides Audit Committee) receive an annual committee retainer of $15,000.

Except for the Chairman (whose equity compensation is described below), each non-employee members of the Board receive an annual equity award in the amount of $150,000 (increased from $100,000). The Chairman receives an annual equity award in the amount of $230,000 (increased from $150,000). Certain members of the Board elected to be paid in cash in lieu of receiving their equity awards. For Messrs. Madon and Strong, director fees are paid directly to entities affiliated with the employer of such director for firm use and are not redirected to the individual directors. All directors are reimbursed for reasonable expenses incurred in connection with their services as directors. Please see “Compensation Discussion and Analysis—2018 Director Compensation” beginning on page 69 for more information.

Board Leadership Structure; Lead Director; Separation of the Chairman and CEO Positions

As set forth in our Corporate Governance Guidelines, the Board does not have a formal policy with respect to the separation of the Chairman and CEO positions. The Board believes that this issue is part of the CEO succession planning process and that it is in the best interests of the Company for the Board to make a determination regarding this issue any time it elects a new CEO and thereafter as deemed appropriate.

During 2018, the Company maintained separate CEO and Chairman roles. If a different determination is made in the future regarding the separation of the Chairman and CEO positions, such that the CEO is the Chairman, a Lead Director shall be elected by the Board to serve as a liaison between the Chairman and the independent directors, lead executive sessions of the Board, have authority to call meetings of the independent directors, lead the Board in discussions concerning the CEO’s employment and performance and CEO succession, and perform such other duties and responsibilities as requested by the Board.

BENEFICIAL OWNERSHIP OF COMMON STOCK OF THE COMPANY

The following table sets forth information, as of March 31, 2019 (unless noted otherwise), regarding the beneficial ownership of our Common Stock by: (1) each of our current directors and nominees for director; (2) each of our current named executive officers; (3) all of our directors and executive officers as a group; and (4) each person or entity we know that beneficially owns more than 5% of our outstanding shares of Common Stock.

Beneficial ownership for the purposes of this table is determined in accordance with the rules and regulations of the SEC. Under such rules, beneficial ownership includes any shares as to which a person has sole or shared voting power or investment power and any shares that the stockholder has the right to dispose of or acquire within 60 days of March 31, 2019. Common stock subject to options, regardless of whether such arrangement is currently in the money, that are currently exercisable within 60 days of March 31, 2019, are deemed to be outstanding and beneficially owned by the holder of the options, and Common Stock issuable upon vesting of restricted stock units (“RSUs”) that are vested, or will vest within 60 days of March 31, 2019, is deemed to be outstanding and beneficially owned by the holder of such RSUs. The shares underlying any outstanding options or RSUs, however, are not deemed outstanding for the purposes of computing the percentage ownership of any other stockholder.

Percentages of beneficial ownership are based on 484,235,663 shares of Common Stock outstanding as of March 31, 2019. Except as disclosed in the footnotes to this table, we believe that each stockholder identified in the table possesses sole voting and investment power over all shares of Common Stock shown as beneficially owned by the stockholder. All percentages and share amounts are approximate based on current information available to us. The information available to us may be incomplete.

The following Brookfield entities, which do not themselves hold any shares of Common Stock but which are controlling entities of certain of the investment vehicles, may be deemed to constitute a “group” with the investment vehicles within the meaning of Section 13(d)(3) under the Exchange Act and Rule 13d-5(b)(1) thereunder and each member of the “group” may be deemed to beneficially own all shares of Common Stock held by all members of the “group” set forth in the table above: Brookfield Asset Management Inc., Partners Limited, Brookfield Private Equity Inc., Brookfield US Corporation, Brookfield Private Equity Holdings LLC, Brookfield Private Equity Direct Investments Holdings LP, Titan Co-Investment GP, LLC, Brookfield Private Equity Group Holdings LP, Brookfield Capital Partners Ltd., Brookfield Holdings Canada Inc., Brookfield Private Funds Holdings Inc., Brookfield Canada Adviser and Brookfield Asset Management Private Institutional Capital Adviser (Canada), L.P. (“BAMPIC”).

The total number of reported shares includes the shares beneficially owned by Seismic Holding LLC. By virtue of various agreements and arrangements with Seismic Holding LLC, Brookfield Asset Management Inc. and certain of the investment vehicles share beneficial ownership of shares beneficially owned by Seismic Holding LLC.

Each of the investment vehicles expressly disclaims, to the extent permitted by applicable law, beneficial ownership of any shares of Common Stock held by each of the other investment vehicles and the existence of a “group” involving the other investment vehicles or other Brookfield affiliates set forth in this footnote.

The address of each Brookfield-managed entity (other than Seismic Holding LLC) is c/o BAMPIC, 250 Vesey Street, 15th Floor, New York, New York 10281.

Seismic Holding LLC directly holds 15,900,800 shares of the Issuer. In addition, Seismic Holding may be deemed to have beneficial ownership of all the shares held by entities affiliated with Brookfield Asset Management Inc. set forth in footnote (1) to this table, by virtue of various agreements and arrangements that may be deemed to grant Seismic Holding LLC voting power and/or investment power with respect to the shares held by such entities, including the shares held by Longhorn Capital GS LP, of which Seismic Holding LLC is a limited partner with powers that may be deemed to constitute voting power and/or investment power with respect to the shares held by the limited partnership.

The total number of reported shares is included in the total described in footnote (1) to this table. Each of Seismic Holding LLC and its controlling persons expressly disclaims, to the extent permitted by applicable law, the existence of a “group” (within the meaning of Section 13(d)(3) under the Exchange Act and Rule 13d-5(b)(1) thereunder) involving such Brookfield entities and beneficial ownership of any shares of common stock held by any of the Brookfield entities (including Longhorn Capital GS LP), with the exception of the 6,980,301 shares held by Longhorn Capital GS LP in which Seismic Holding LLC has an interest. Seismic Holding LLC is 100% indirectly owned by Qatar Investment Authority. The address of Seismic Holding LLC is Q-Tel Tower, 8th Floor, Diplomatic Area Street, West Bay, P.O. Box 23224, Doha, State of Qatar.

2018 Named Executive Officers

These five employees represent Vistra Energy’s Named Executive Officers for 2018—while this Proxy Statement specifically discusses the compensation relating to Vistra Energy’s Named Executive Officers, the practices and programs described herein generally extend more broadly across Vistra Energy’s executive leadership team.

PERFORMANCE OVERVIEW

In this section, Vistra Energy provides highlights of our performance in 2018, reflecting factors considered by the Compensation Committee in assessing variable pay outcomes for the Named Executive Officers.

SUMMARY OF THE KEY FEATURES OF OUR EXECUTIVE COMPENSATION PROGRAM

Emphasis on “At Risk”/Performance-Based Pay

The Compensation Committee is committed to rigorous, market-based compensation and corporate governance practices. It further believes the decisions regarding 2018 compensation were made to ensure continued alignment of executive compensation with the Company’s results, and the Compensation Committee designed the majority of Vistra Energy’s Named Executive Officers’ compensation to be linked directly to individual, corporate, business unit (or area of responsibility) and company stock price performance. For example, each Named Executive Officer’s annual performance-based cash bonus is based primarily on the achievement of certain corporate and business unit financial and operational targets, and the annual equity grants made in the fourth quarter of 2017 to the Named Executive Officers were awarded in the form of stock options, RSUs and PSUs. In April 2018, in connection with the Dynegy merger closing, the Board awarded various executives, including the Named Executive Officers, a special, performance-contingent stock option award (the “Merger Equity Awards”), with 50% vesting on the fourth anniversary of the grant, and the remaining 50% vesting on the fifth anniversary of the grant, in each case subject to achievement of merger-related performance hurdles. The size of the Merger Equity Awards in 2018 were determined based on an evaluation of each executive’s roles and responsibilities within the combined company and were tailored to provide additional incentives to achieve various synergy and merger value lever targets that will improve Vistra Energy’s financial performance and enhance stockholder value.

For 2018, 92% of our CEO’s compensation and 84% of our other Named Executive Officers’ compensation (i.e., base salary, annual short-term incentives and long-term incentives) was “at risk” compensation directly contingent on performance. Actual annual bonuses and long-term incentive awards are subject to the achievement of pre-established performance targets and designed to link directly to enhanced shareholder value. Base salary and other fixed elements of compensation are essential to any compensation program and relevant to the recruitment and retention of top talent. However, we believe that “at risk” compensation for our most senior executives should be a significant portion of their pay mix. Our 2018 compensation reflects this philosophy. The following charts illustrate the 2018 pay mix for our CEO and the average of the other Named Executive Officers.

2018 Named Executive Officer Compensation Overview *

Chief Executive Officer Annualized 2018 Targeted Pay Mix		Average Other Named Executive Officers – Annualized 2018 Targeted Pay Mix

Performance Highlights

Vistra Energy’s Executive Annual Incentive Plan places the greatest weighting on a combination of (i) adjusted Earnings Before Interest, Taxes, Depreciation and Amortization, which reflects EBITDA as adjusted for unrealized gains or losses from hedging activities, tax receivable agreement obligations, reorganization items, and certain other items deemed appropriate by the Company from time to time (“Adjusted EBITDA”), (ii) total costs and (iii) adjusted free cash flow, which reflects cash from operating activities excluding changes in margin deposits and working capital and adjusted for capital expenditures, including capital expenditures for growth investments, other net investment activities, preferred stock dividends, and other items deemed appropriate by the Company from time to time (“Adjusted Free Cash Flow”). Together, these metrics demonstrate the results of the organization’s focus on achieving business results while exercising discipline in cost decisions. As seen below, Adjusted EBITDA exceeded its target for 2018, which was set at the midpoint of the revised guidance set following the close of the Dynegy merger, while cost management significantly outperformed its target, and Adjusted Free Cash Flow exceeded its target as well, collectively contributing to strong incentive plan payouts.

CORPORATE GOVERNANCE PRACTICES

In this section, Vistra Energy provides details of its corporate governance framework, procedures and practices as they relate to Named Executive Officer compensation.

Advisors to the Compensation Committee

Independent Advisors

During 2018, Willis Towers Watson provided ongoing advisory services to Vistra Energy and the Compensation Committee on various aspects of Vistra Energy’s executive compensation and benefits practices, including, but not limited to, the development of the compensation structure.

In accordance with its charter, the Compensation Committee determined that Willis Towers Watson is sufficiently independent to appropriately advise the Compensation Committee on compensation matters and that its relationship with Willis Towers Watson does not give rise to any conflict of interest. Going forward, the Compensation Committee expects that it will continue to engage compensation consultants when and as appropriate, and will conduct an assessment of consultants’ independence prior to any such engagement.

COMPENSATION PHILOSOPHY

In this section, Vistra Energy provides details of the Named Executive Officer compensation framework, practices and outcomes for 2018.

Compensation Philosophy

Vistra Energy’s compensation program is intended to attract and motivate top-talent executive officers as leaders and compensate executive officers appropriately for their contribution to the attainment of our financial, operational and strategic objectives. In addition, Vistra Energy believes it is important to retain our top-tier talent and strongly align their interests with our stockholders’ interests by emphasizing incentive-based compensation. Vistra Energy utilizes the following elements of compensation to achieve these objectives:

Compensation Determination Process

Use of Market Data

Vistra Energy establishes target compensation levels that are consistent with market practice and internal equity considerations (including position, responsibility and contribution) relative to base salaries, annual incentives and long-term incentives, as well as with the Compensation Committee’s assessment of the appropriate pay mix for a particular position. In order to gauge the competitiveness of our compensation programs, Vistra Energy reviews compensation practices and pay opportunities from the energy services industry and general industry survey data, as well as from a selection of publicly-traded peer companies. Vistra Energy attempts to position itself to attract and retain qualified senior executives in the face of competitive pressures in our relevant labor markets.

Specifically during 2018, Vistra Energy used information regarding the pay practices of the energy services industry and general industry companies provided by our compensation consultant, regressed to Vistra Energy’s revenue size. Vistra Energy believes that revenue is an appropriate indicator of the size and complexity of an organization, which should be considered in determining compensation levels. The compensation data resulting from this analysis was a significant factor considered by the Compensation Committee with respect to its executive compensation decisions for the Named Executive Officers.

During 2018, Vistra Energy also utilized a compensation peer group as an additional reference point when determining executive compensation. This peer group consisted of a select group of companies that the Compensation Committee believes are representative of the talent market in which Vistra Energy competes. Vistra Energy’s compensation peer group consisted of the following companies for 2018:

The Compensation Committee does not target any particular level of total compensation or individual component of compensation against the peer group; rather, the Compensation Committee considers the range of total compensation provided by Vistra Energy’s peers, together with information from published surveys, in determining the appropriate mix and level of total compensation for our executives.

Compensation of the CEO

In determining the compensation of the CEO, the Compensation Committee annually follows a thorough and detailed process. At the end of each year, the Compensation Committee reviews an assessment of the CEO, prepared by the Chief Administrative Officer with input from the CEO, regarding the CEO’s performance and the performance of Vistra Energy’s businesses, and meets (with and without the CEO) to evaluate and discuss his performance and the performance of Vistra Energy’s businesses.

While the Compensation Committee tries to ensure that a substantial portion of the CEO’s compensation is directly linked to his performance and the performance of Vistra Energy’s businesses, the Compensation Committee also seeks to set his compensation in a manner that is competitive with compensation for similarly performing executive officers with similar responsibilities in companies Vistra Energy considers to be our peers.

Compensation of Other Named Executive Officers

In determining the compensation of each of Vistra Energy’s Named Executive Officers (other than the CEO), the Compensation Committee seeks the input of the CEO. At the end of each year, the CEO reviews a self-assessment prepared by each Named Executive Officer and assesses the Named Executive Officer’s performance against business unit (or area of responsibility) and individual goals and objectives. The Compensation Committee and the CEO then review the CEO’s assessments of such Named Executive Officers and, in that context, the Compensation Committee decides and approves the compensation for each Named Executive Officer.

Role of the Compensation Consultant

To add rigor in the review process and to inform the Compensation Committee of market trends, the Compensation Committee engages the services of Willis Towers Watson, an independent executive compensation consultant, to analyze Vistra Energy’s executive compensation structure and plan designs and to assess whether the compensation program is competitive and supports the Compensation Committee’s goal to align the interests of executive officers with those of stockholders. Willis Towers Watson may also directly provide the Compensation Committee with market data, which the Compensation Committee references when determining compensation for executive officers. The Compensation Committee has authorized Willis Towers Watson to interact with Vistra Energy’s management, as needed, on behalf of the Compensation Committee. Willis Towers Watson does not provide any other services to Vistra Energy outside of matters pertaining to executive and director compensation and related corporate governance matters.

The Compensation Committee has the sole authority to approve the independent compensation consultant’s fees and terms of the engagement. Thus, the Compensation Committee annually reviews its relationship with, and assesses the independence of, Willis Towers Watson to ensure executive compensation consulting independence.

Base Salary

Vistra Energy believes that base salary should consider the scope and complexity of an executive officer’s position and the level of responsibility required to perform his or her job. It also believes that a competitive level of base salary is required to attract, motivate and retain qualified talent. Vistra Energy wants to ensure our cash compensation is competitive and sufficient to incent executive officers to remain with Vistra Energy, recognizing our high-performance expectations across a broad set of operational, financial, customer service and community-oriented goals and objectives.

The Compensation Committee regularly reviews base salaries and periodically engages Willis Towers Watson, our independent compensation consultant, to conduct compensation surveys to ensure the base salaries are market-competitive, while also serving as an effective retention tool. The Compensation Committee may also review an executive officer’s base salary from time to time during a year, including if the executive officer is given a promotion or if his or her responsibilities are significantly modified.

Base salaries for each of Messrs. Morgan, Burke and Holden were initially set by their respective employment agreements, and base salaries for each of Messrs. Hudson and Muscato were determined based on market data, role and responsibilities. Subject to the employment agreements with Messrs. Morgan, Burke and Holden, which are described under “Employment Arrangements and Severance Benefits” beginning on page 50, the Compensation Committee may change the base salaries for all of the Named Executive Officers at any time based on updated market data, updated roles and responsibilities and the CEO’s recommendation. Board approval is required to change the base salary for Mr. Morgan.

As a result of the Dynegy merger and the corresponding increase in the size, geography and complexity of the combined company, together with the increased responsibilities for each of the Named Executive Officers, in May 2018, the Compensation Committee reassessed the compensation mix of our Named Executive Officers and engaged Willis Towers Watson to conduct a compensation survey of our peer companies. Based on a review of the enhanced roles and responsibilities of each Named Executive Officer resulting from and the market assessment conducted following the close of the Dynegy merger, the Compensation Committee and the Board approved salary increases for each of the Named Executive Officers in May 2018. The resulting base salaries are reflected the table below.

Annual Incentive Plan

Summary

The EAIP provides an annual performance-based cash bonus for the successful attainment of certain financial and operational performance targets that are established annually by the Compensation Committee. Under the terms of the EAIP, performance against these targets, which are set at challenging levels to incentivize exceptional performance (while at the same time balancing the needs for safety and investment in Vistra Energy’s business), drives bonus funding.

Performance Framework

As a general matter, target-level performance is based on Vistra Energy’s board-approved financial and operational plan (the Financial Plan) for each upcoming year. The Compensation Committee sets high expectations for Vistra Energy’s executive officers and therefore annually selects a target performance level that constitutes above average

performance for the business, which the Compensation Committee expects the business to achieve during the upcoming year. Threshold and superior levels are for performance levels that are below or above Financial Plan-based expectations, respectively. Based on the level of attainment of these performance targets, an aggregate EAIP funding percentage amount for all participants is determined.

Target Opportunity (as a % of Salary)

Target cash bonus awards are set for each executive officer as a percentage of their base salary. Performance payouts on financial metrics are equal to, for any particular metric, 100% if the target amount is achieved, 50% if the threshold amount is achieved and 200% if the superior amount is achieved. Actual performance payouts are interpolated on a linear basis, as applicable, with a maximum performance payout for any particular metric being equal to 200%. These results are then adjusted by an individual performance modifier as described below.

Similar to base salary, following the close of the Dynegy merger, the Compensation Committee utilized the market-based compensation survey provided by Willis Towers Watson to review and adjust the target bonus percentages for the Named Executive Officers to ensure such targets were competitive with those of our peers, as reflected on the table below. The bonus calculations for 2018 are based on a prorated formula with the former and new base salaries and bonus targets.