GameStop Corp (NYSE:GME) shares surged almost 6% on Wednesday after the videogame retailer announced a $35 billion compensation package for CEO Ryan Cohen, tied entirely to a dramatic turnaround of the struggling company.
The new pay plan, which requires shareholder approval at a special meeting expected in March or April, offers Cohen stock options to purchase over 171.5 million shares at $20.66 each.
Notably, Cohen will receive no guaranteed salary, cash bonuses, or other stock options. The award is entirely contingent on achieving ambitious targets.
Under the plan, Cohen must grow GameStop’s market capitalization from its current $9.26 billion to $100 billion and deliver $10 billion in cumulative performance EBITDA.
Meeting these goals will require a major strategic shift for the brick-and-mortar retailer, which has struggled in recent years as gamers increasingly turn to online purchases.
The structure of the package mirrors Elon Musk’s 10-year incentive plan at Tesla, which ties pay to bold operational and market value milestones. Cohen, already GameStop’s second-largest shareholder with an 8.3% stake, is now tasked with leading a turnaround that would more than tenfold the company’s market value.
GameStop hit a record $34 billion market cap during the 2021 meme-stock frenzy, highlighting the gap between its current position and Cohen’s ambitious targets.