GameStop CEO Poised for Major Payday, But There’s a Significant Catch

GameStop revealed this week that it is working on a proposed compensation package for its CEO, Ryan Cohen, valued at around $35 billion. This pay structure is entirely performance-based and hinges on a significant turnaround for the company. To unlock this compensation, Cohen must boost GameStop’s market value by over tenfold and substantially increase profits. Achieving these targets will necessitate a major transformation for GameStop, which has faced challenges in recent years. The company’s stock price has also plummeted from the record highs of 2021, a time when GameStop became a favorite among retail investors during the meme-stock phenomenon. Even at the onset of the pandemic in 2020, GameStop was already strategizing to match the number of store closures from the previous year. Under the new plan, Cohen is tasked with elevating GameStop’s market value to $100 billion and generating $10 billion in cumulative performance EBITDA—earnings before interest, taxes, depreciation, and amortization, a standard metric for operating profit. Currently, GameStop’s market value stands at approximately $9.26 billion, having peaked at around $34 billion during the 2021 surge. Notably, Cohen will not receive a salary, cash bonuses, or traditional stock awards; instead, his compensation will come from stock options allowing him to purchase over 171.5 million shares at $20.66 each. Cohen, a billionaire investor, joined GameStop’s board in January 2021 and took on the CEO role in September 2023. Shareholders are expected to vote on this package at a special meeting scheduled for March or April.