GameStop Chairman Ryan Cohen.
CNBC
game stop has offered Chairman and CEO Ryan Cohen a massive all-or-nothing stock incentive that will only be paid if the video game retailer’s stock price and profits rise to levels well above those previously achieved.
GameStop’s board of directors has granted Cohen performance-based stock options to target a market capitalization of $100 billion and cumulative earnings before interest, taxes, depreciation and amortization of $10 billion, according to a statement released Wednesday.
Under the terms of the plan, Mr. Cohen will receive nothing unless he meets minimum standards, and he will not receive partial credit if he fails to meet his goals. None of the options will vest unless GameStop reaches a market capitalization of at least $20 billion and cumulative EBITDA of $2 billion.
GameStop’s stock price has fallen 36% in the last year, and the company’s market capitalization now stands at $9.3 billion. The company reported net income of $77.1 million in the third quarter.
If Mr. Cohen achieves his goals, the total amount awarded will be 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 a central figure in GameStop’s post-Memestock transformation.
The company has made several moves aimed at expanding its business beyond the physical sale of video games, including expanding into collectibles and trading cards, as well as aggressively buying Bitcoin using corporate bonds. However, there is still no clear master plan for how these efforts will be reflected in the scale of growth included in compensation targets.
The company said its compensation structure aims to directly align Cohen’s incentives with long-term shareholder interests by fully tying Cohen’s compensation to what the company calls “extraordinary growth.”
