Under the newly announced plan, Cohen’s compensation is entirely dependent on his ability to dramatically transform the company’s fortunes. To unlock the full value of the award, he must grow GameStop’s market capitalisation to $100 billion—more than ten times its current valuation—and deliver $10 billion in cumulative performance EBITDA (earnings before interest, taxes, depreciation and amortisation).
The targets underscore the scale of the challenge facing the brick-and-mortar retailer, which has been grappling with a steady decline as gamers increasingly shift to online purchases. GameStop’s annual revenue has fallen by more than 35% since 2022, while its share price remains about 80% below the record highs reached during the 2021 meme-stock rally that briefly turned the company into a retail investor favourite.
GameStop’s current market capitalisation stands at approximately $9.26 billion, far below the roughly $34 billion peak it achieved at the height of the pandemic-era trading frenzy. Despite these headwinds, investor sentiment appeared cautiously optimistic following the announcement, with the company’s shares rising more than 4% in early trading on Wednesday. The stock also emerged as the second most-trended name on Stocktwits, a platform popular with individual investors.
According to the company, Cohen will receive no guaranteed salary, cash bonuses or traditional stock options. Instead, the package consists solely of performance-based stock options to purchase more than 171.5 million GameStop shares at an exercise price of $20.66 per share. Based on Reuters calculations, meeting the market capitalisation target would translate to a total award value of nearly $35 billion, excluding an estimated $3.5 billion exercise cost.
The structure of the compensation mirrors the controversial 10-year incentive plan previously approved for Tesla CEO Elon Musk, which similarly ties pay entirely to long-term stock performance and operational milestones. GameStop’s plan is divided into nine tranches, with each tranche vesting only after specific performance goals are achieved.
A surge in GameStop’s valuation would also benefit Cohen beyond the incentive package. The billionaire investor is currently the company’s second-largest shareholder, holding an 8.3% stake, according to LSEG data.
Cohen joined GameStop’s board in January 2021 amid activist investor pressure and was appointed CEO in September 2023. Since taking the helm, he has overseen aggressive cost-cutting measures, including the closure of hundreds of stores, which helped return the company to profitability after years of losses.
GameStop said its board has reached an agreement with Cohen on the proposed compensation plan, which will now be put to shareholders for approval at a special meeting expected to take place in March or April.
The package marks a high-stakes bet on Cohen’s leadership, effectively linking one of the largest potential executive paydays in corporate history to a dramatic revival of a company still searching for a sustainable future in a rapidly evolving gaming market.