Ryan Cohen's ambitious compensation at GameStop: How could he reach $35 billion?

Business Performance-Linked Incentive Plan

The Board of Directors of GameStop Corporation (NYSE: GME) has approved an innovative compensation package for its CEO Ryan Cohen that is entirely contingent upon achieving performance targets. Unlike traditional compensation, Cohen will not receive a base salary, cash bonuses, or automatic stock awards. Instead, the company has structured his remuneration with stock options that will only vest if specific market capitalization and cumulative EBITDA milestones are met.

Under this compensation scheme, Cohen would be entitled to options to purchase 171,537,327 GME shares at an exercise price of $20.66 per share. If all nine tranches are achieved, the astronomical figure of his compensation could approach $35 billion, according to Reuters reports. The plan includes a tiered structure that directly links the executive’s incentives to long-term shareholder value creation.

Objectives Breakdown: The Nine Tranches of the Proposal

The proposal establishes nine unlocking levels, each requiring the simultaneous achievement of two goals: a market capitalization target and a cumulative EBITDA target. The first six tranches offer 10% of the award each, while the seventh and eighth tranches represent a smaller percentage, and the eighth and ninth tranches reach 15% of total compensation.

To unlock the entire package, GameStop must reach a market capitalization of $100 billion and generate a cumulative EBITDA of $10 billion. These objectives are significant considering the company’s current market cap is around $9.3 billion. Since Cohen joined the board in 2020, GameStop’s market value has increased by 615%, rising from $1.3 billion to current levels.

The proposal also reflects a notable financial transformation in operations. The company shifted from a net loss of $381.3 million in fiscal year 2021 to a net profit of $421.8 million in the last four quarters, demonstrating operational efficiency improvements under his leadership.

Changes in Business Strategy: Expansion and Restructuring

Since Cohen assumed the CEO position in September 2023, he has driven a strategic diversification beyond the traditional video game business. The company has identified growth opportunities in segments such as collectibles and trading cards, expanding its revenue generation base.

Meanwhile, GameStop is implementing a substantial review of its physical store portfolio. During the last fiscal year, 590 stores in the United States were closed as part of an operational optimization strategy. SEC filings indicate that restructuring will continue through fiscal year 2025, ending January 31, 2026, with confirmation of an additional 223 closures just in January. This consolidation aims to improve profitability by adjusting infrastructure to new retail market realities.

Stock Performance and Pending Shareholder Approval

In recent trading sessions, GME has shown significant volatility. Shares traded within a 52-week range of $19.93 to $35.81, with prices touching levels near $21.63 in recent days. Although the stock recently rebounded 4.7%, it remains down 35.2% over the past year, reflecting the volatile nature of the ticker.

The compensation plan for Ryan Cohen still requires shareholder approval. A special meeting is scheduled for March or April 2026, where shareholders will vote on the proposal. It is important to note that Cohen will abstain from participating in the vote. The package was developed with the consulting of external specialized firms, ensuring an independent analysis of its structure and feasibility.