GameStop Unveils $3.54 Billion Stock Option Plan for CEO

GameStop has announced a substantial compensation package for its CEO, Ryan Cohen, aimed at significantly boosting the company’s market value. The potential award, valued at up to $3.54 billion, is contingent on Cohen successfully increasing the struggling videogame retailer’s market capitalization from its current valuation of $9.26 billion to over $100 billion.

Scheduled for January 7, 2024, the announcement led to a 3.1 percent rise in GameStop shares during premarket trading. The compensation structure is unique; Cohen will not receive any guaranteed salary, cash bonuses, or stock options. Instead, his entire compensation is deemed “at-risk,” reliant on meeting the ambitious financial targets set by the company.

GameStop’s incentive plan closely mirrors the 10-year package approved for Elon Musk at Tesla. Under Musk’s plan, compensation is tied exclusively to stock options that only vest when specific market capitalization and operating profit goals are realized. This model highlights a growing trend among companies to align executive pay with long-term performance metrics.

Cohen’s compensation package consists of stock options allowing him to purchase more than 171.5 million shares at a price of $20.66 per share. The significant challenge ahead for Cohen involves not only revitalizing GameStop’s operations but also navigating the competitive landscape of the gaming industry, which has seen substantial shifts in consumer behavior and retail dynamics.

As GameStop positions itself for potential growth, the focus will be on how effectively Cohen can implement strategies to turn the company around. Investors and analysts will be closely monitoring the impact of this bold compensation strategy on both the company’s performance and its stock value in the months and years to come.