Can Ryan Cohen's $35B Incentive Package Drive GameStop Stocks to New Heights?

GameStop has just unveiled an audacious long-term performance award for CEO ryan Cohen, mirroring a strategy recently popularized by Tesla with Elon Musk’s compensation package. The gaming retailer is betting that offering Cohen potentially massive financial rewards tied to specific growth milestones will transform the company’s trajectory—but does this strategy justify buying the stock now?

Understanding the Mega Compensation Plan for Ryan’s Leadership

Under GameStop’s newly announced framework, ryan Cohen receives no guaranteed salary, cash bonuses, or automatic equity vesting. Instead, the entire compensation structure hinges on hitting predetermined financial targets. The company plans to grant Cohen stock options to acquire over 171.5 million shares at $20.66 per share, representing an initial package valued above $3.5 billion.

To unlock the full $35 billion potential award, GameStop must achieve $10 billion in EBITDA and reach a $100 billion market capitalization. The incentive structure releases portions of the award in tranches—the first installment (10% of total compensation) vests when the company hits $20 billion market cap and $2 billion in EBITDA. This creates a cascading system of milestones that keeps ryan aligned with shareholder interests at every stage of growth.

Shareholders must approve this plan at an upcoming vote in March or April, adding another layer of uncertainty before the initiative officially launches.

GameStop’s Recent Progress: Will New Revenue Streams Support Stock Growth?

GameStop has genuinely strengthened its financial foundation by downsizing its physical store footprint and accelerating growth in its collectibles business, which now represents close to 28% of total revenue. This shift shows up clearly in recent metrics: the company’s operating cash flow and EBITDA have improved measurably, with earnings also trending positively.

However, significant challenges persist. The software business—selling new and pre-owned video games—continues its decline. The hardware division, GameStop’s largest business segment handling video game console sales, remains under pressure, though deteriorating less rapidly than software. Combined, these two segments still account for over 70% of total revenue, making their weakness a persistent concern.

From a leadership perspective, ryan brings evident capability to the CEO role. Beyond his compensation incentives, he maintains ownership of over 9% of outstanding shares, creating additional personal stakes in the company’s success. Yet despite these positives, GameStop currently trades at approximately 27 times its annualized earnings—a substantial valuation for a company working to stabilize revenue in two major business lines.

Is GameStop Worth Your Investment Now?

The fundamental math on GameStop stocks presents a challenging picture. Even with operational improvements, the company’s high price-to-earnings multiple seems difficult to justify for a retailer facing structural headwinds in its core business segments. GameStop will likely maintain the social media-driven volatility and speculative appeal that have historically characterized its trading patterns, but this “viral appeal factor” doesn’t necessarily translate to sound long-term investment fundamentals.

The $35 billion incentive package creates an undeniable alignment of interests between ryan and shareholders. If GameStop can execute its growth strategy across collectibles and new business initiatives while stabilizing legacy operations, the upside could be significant. However, current valuation levels may already price in considerable optimism about the company’s turnaround prospects.

Investment decisions should weigh both the genuine operational progress GameStop has demonstrated and the substantial execution risk remaining as the company attempts to transform its business model.