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Key takeaways

  • Ryan Cohen, the CEO of GameStop, could earn a potential bonus of 35 billion dollars (30 million euros) if he can push the company’s market value up to 100 billion dollars (85 million euros).
  • Cohen’s remuneration is entirely performance-based, incentivising him to create long-term value for shareholders.
  • Despite volatility and the challenges of adapting to the digital gaming landscape, GameStop’s share price has risen significantly since 2021.

The potential 35 billion dollar (30 million euro) payout for Ryan Cohen, CEO of GameStop, depends on a monumental transformation of the video game retail chain. This performance-based stock option package, announced by the company’s board of directors, is intended to motivate Cohen to deliver extraordinary growth.

Ambitious targets

To unlock this massive payout, GameStop’s market capitalisation must rise to 100 billion dollars (85 billion euros), around ten times its current value, and its earnings before interest, taxes, depreciation and amortisation (EBITDA) must reach 10 billion dollars (8.5 billion euros).

Cohen’s pay structure is striking: he is only paid if the company hits key market and operational milestones. Unlike traditional CEO packages with a guaranteed salary and bonuses, Cohen’s remuneration is tied solely to GameStop’s performance. This directly aligns his pay with the creation of long-term shareholder value, a strategy reminiscent of Elon Musk’s compensation plan at Tesla.

Volatile stock

Cohen’s tenure as CEO since 2021 has been marked by considerable volatility. GameStop became the standard-bearer of the ‘meme stock’ phenomenon in 2021, when retail investors took on short sellers and drove the share price up by more than 2,000 percent.

Despite this attention, GameStop has faced challenges in adapting to the shift towards buying games online. In recent years, the company has closed hundreds of physical stores and, as part of its strategic change of course, has invested heavily in cryptocurrencies.

While GameStop’s market value stood at around 1.3 billion dollars (1.1 billion euros) in 2021, it has since grown to roughly 9.3 billion dollars (7.9 billion euros).

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