GameStop $GME ( ▲ 0.61% ) rose in premarket trading after the company unveiled a long-term compensation plan for Chairman and CEO Ryan Cohen that fully links his pay to shareholder returns and operating performance. The package gives Cohen no salary, no cash bonus, and no time-based stock awards.
Instead, Cohen will only get paid if GameStop meaningfully increases both its market value and profitability.
All upside, no guarantees
Under the plan, Cohen receives options to buy up to 171.5 million shares at $20.66 each, but only if GameStop clears a series of strict performance hurdles. Those hurdles are tied to market capitalization targets and cumulative EBITDA generation.
The structure prevents Cohen from benefiting from another meme-style stock surge unless it is paired with sustained profits. According to the company, his compensation is entirely “at-risk,” meaning there is no payout unless both financial and operational goals are met.
What has to happen for the options to vest
The package is split into nine tranches. The first tranche vests only if GameStop exceeds a $20 billion market cap and generates $2 billion in cumulative EBITDA, measured starting in Q1 2026. Additional tranches scale up in $10 billion market cap increments, reaching as high as $100 billion, alongside $1 billion EBITDA steps up to $10 billion.
GameStop has only closed above a $20 billion valuation once before, during the 2021 meme-stock rally.
Why this matters for shareholders
The structure directly aligns Cohen’s incentives with long-term execution rather than short-term stock moves. His strategy so far has focused on expanding higher-margin collectibles, aggressive cost-cutting, and experimenting with a bitcoin treasury approach to strengthen the balance sheet.
The compensation plan still requires shareholder approval, and Cohen will not vote on the proposal himself.