By Tim McLaughlin

May 28 (Reuters) - Talen Energy has awarded CEO Mark "Mac" McFarland more than $300 million in stock-based pay three years after the Houston company emerged from bankruptcy and generated a total return of 620% for investors.

Talen TLN.O shares have soared as its gas-fired power plants have capitalized on the surging demand for electricity from AI-driven data centers in the PJM Interconnection, the largest U.S. regional electric grid. In the first quarter, Talen's operations generated $461 million in cash flow, compared to $119 million in the year-earlier period.

Talen disclosed this week that McFarland received 887,163 shares of restricted and performance stock. The award is worth about $334 million, based on Talen's Thursday morning stock price of $382.78 per share.

McFarland's stock award is tied to Talen's emergence from Chapter 11 bankruptcy protection in June 2023. Since then, Talen's total return has topped 600%, triggering a payout of extra performance shares for McFarland, according to disclosures with the U.S. Securities and Exchange Commission.

By comparison, Talen's stock has easily outperformed the 62% total return of the S&P 500 Energy Sector Index .SPNY over the past three years.

Meanwhile, tight conditions in the PJM power market are expected to drive higher gross margins at Talen power plants, according to a presentation by company executives this month. Talen noted how more frequent scarcity events tied to peak load conditions and constrained system capacity will further benefit the economics of running gas-fired generation.