GameStop floats CEO pay entirely tied to performance

Core Viewpoint - GameStop's CEO Ryan Cohen may transition to a performance-based compensation plan, contingent on shareholder approval, which would eliminate guaranteed pay and link his earnings solely to the company's performance metrics [1][3]. Compensation Plan Details - The proposed stock options require GameStop to achieve a $100 billion market capitalization and $10 billion in cumulative performance EBITDA for full vesting, distributed in nine tranches based on milestone achievements [2]. - The first milestone stipulates that if GameStop does not reach a $20 billion market cap and $2 billion in cumulative performance EBITDA, no options will vest [2]. Financial Performance - Since Cohen joined the board, GameStop's market capitalization has increased from approximately $1.3 billion to about $9.3 billion, reflecting a 615% growth [5]. - The company's total selling, general, and administrative expenses decreased by over 44%, from $1.7 billion in fiscal year 2021 to $950.8 million in the most recent four fiscal quarters [5]. - GameStop has transitioned from a net loss of $381.3 million to a net income of $421.8 million [5]. Board and Shareholder Actions - The board has approved the stock option plan, designed to incentivize Cohen for extraordinary growth, with Cohen recusing himself from the decision-making process and the upcoming shareholder vote [6]. - The shareholder vote is anticipated to occur in March or April [6]. Comparison to Other Compensation Structures - The compensation setup is likened to Elon Musk's compensation plan at Tesla, with potential earnings for Cohen estimated at $35 billion, although the performance targets are considered ambitious [7].