Ryan Cohen could be in for a big payday, but he has to grow meme darling GameStop to $100 billion
GameStop Chairman Ryan Cohen has been offered a massive equity incentive that will only pay out if the company’s stock and profits reach unprecedented levels. The board of GameStop has granted Cohen performance-based stock options tied to a $100 billion market capitalization target and $10 billion in cumulative earnings before interest, taxes, depreciation, and amortization.
Under the terms of the plan, Cohen will only receive the stock options if the minimum thresholds are met, with no partial credit given if targets are missed. If GameStop fails to reach at least $20 billion in market capitalization and $2 billion in cumulative EBITDA, none of the options will vest. Currently, GameStop has a market cap of $9.3 billion, and the company reported a net income of $77.1 million in the third quarter.
If Cohen is able to meet the ambitious goals set by the board, he will be awarded stock options to purchase 171,537,327 shares of GameStop’s Class A common stock at a price of $20.66 per share. Cohen, who joined the board in January 2021 and later became CEO, has been instrumental in GameStop’s transformation post-meme-stock frenzy.
GameStop has been diversifying its business beyond physical video game sales, expanding into collectibles, trading cards, and aggressively investing in bitcoin with its corporate cash. However, there is a lack of clarity on how these initiatives will lead to the significant growth implied by the compensation targets.
The compensation structure is designed to align Cohen’s incentives with long-term shareholder returns by linking his compensation entirely to the company’s “extraordinary growth.” This move reflects GameStop’s commitment to driving shareholder value and rewarding executives for achieving ambitious performance targets.
