GameStop unveils $35B pay plan for CEO Ryan Cohen linked to ‘extraordinary’ growth
GameStop is giving its chief executive the chance to score a huge payday based on the company’s performance.
The struggling video game retailer unveiled a performance award — worth roughly $35 billion, according to Reuters — that is designed to incentivize CEO Ryan Cohen to achieve “extraordinary growth.” Cohen has been charged with increasing GameStop’s market capitalization to $100 billion from its current $9.3 billion capitalization.
The company would also need to achieve $10 billion in “cumulative performance” earnings before interest, taxes, depreciation and amortization (EBITDA).
Specifically, the award consists of options to buy 171,537,327 shares at $20.66 each, with lesser awards for hitting lower milestones. Under the new package, Cohen will receive no guaranteed pay — no salary, no cash bonuses and no stock that vests simply over time. Instead, his compensation is entirely “at-risk,” meaning he will only be paid if GameStop achieves significant market and operational goals.
“This structure ensures that Mr. Cohen's incentives are directly aligned with creating long-term value for GameStop’s stockholders,” the company said in a press release.
Achieving the targets will require a major turnaround at GameStop, whose revenue has been steadily declining in recent years amid surging digital game sales. For its third quarter, revenue fell 4.6% to $821 million as sales of hardware, software and accessories declined. The company has been closing stores as it focuses on cost-cutting and improved effciencies.
READ MORE: GameStop reportedly closing up to 200 stores
GameStop's annual revenue has fallen more than 35% since 2022, while its stock price is down 80% from all-time highs hit in 2021, according to the Reuters report.
The new performance award was created by GameStop’s board of directors (with Cohen, who also holds the title of chairman, having recused himself) after careful discussion and analysis and in consultation with a third-party compensation advisory firm, the company said.
Although the board reached an agreement with Cohen regarding the award, its effectiveness is subject to the approval of GameStop’s stockholders, who will be asked to approve it at a special meeting expected to be held in March or April. Cohen will not participate in the vote.
