GameStop (GME) has approved an aggressive, all-or-nothing compensation plan for chairman and chief executive Ryan Cohen, offering him a massive stock option award only if the company delivers unprecedented growth in both valuation and profits.
Under the plan, Cohen will receive performance-based options linked to GameStop reaching a $100 billion market capitalisation and generating $10 billion in cumulative EBITDA. The structure offers no partial payout. If the company fails to achieve at least $20 billion in market value and $2 billion in cumulative EBITDA, none of the options will vest.
GameStop's shares fell 36 percent last year, and the retailer is currently valued at about $9.3 billion. It reported net income of $77.1 million in the third quarter, underscoring how distant the incentive thresholds remain.
If the targets are met, Cohen would be able to buy more than 171.5 million Class A shares at $20.66 each, a potential windfall that would dwarf any previous executive award in the company's history.
Cohen, who joined the board in early 2021 before taking over as chief executive, has been the driving force behind GameStop's post-meme-stock strategy. The company has pushed into areas such as collectibles, trading cards, and heavy bitcoin purchases, but it has yet to outline a convincing roadmap for achieving the scale of growth implied by the new compensation plan.
The board said the incentive package is designed to tie Cohen's pay directly to long-term shareholder value and to reward only what it described as extraordinary performance.
Wednesday GME closed at $21.29, up 3.05%, and is currently trading at $21.40, up 0.52%, on the NYSE.
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