According to Reuters, on January 7th, GameStop unveiled a potential $3.54 billion compensation package for CEO Ryan Cohen that is entirely contingent on a massive turnaround. The deal awards Cohen stock options to buy over 171.5 million shares at $20.66 each, but only if he can boost the company’s market capitalization from its current $9.26 billion to over $100 billion. He will receive no guaranteed salary, cash bonuses, or stock under this plan, making his pay completely “at-risk.” The structure directly resembles the famous incentive plan for Elon Musk at Tesla. Following the announcement, GameStop’s shares rose 3.1% in premarket trading.
Cohen’s All-or-Nothing Gamble
Here’s the thing: this is either a stroke of genius or pure theater. By taking zero guaranteed compensation, Cohen is signaling a huge, skin-in-the-game bet on his own ability to resurrect GameStop. But let’s be real—a jump from a $9 billion to a $100 billion market cap is astronomically ambitious. We’re talking about a brick-and-mortar video game retailer in an era of digital downloads. It’s not just about the stock price; the plan also ties to “sharply boost profits,” which is arguably the harder task given the company’s recent struggles. Is this a serious business plan, or is it just a mechanism to keep the meme-stock narrative alive? The market’s initial 3% bump suggests some investors are buying the story, for now.
The Musk Playbook on Steroids
And the comparison to Elon Musk’s Tesla package is impossible to ignore. It’s the same playbook: monumental, seemingly impossible targets that, if hit, create legendary wealth for the CEO and, theoretically, shareholders. But the scale relative to the company’s starting point is even more extreme here. Tesla had a transformative product (electric cars) and a massive total addressable market to chase. What’s GameStop’s equivalent? They’ve dabbled in NFTs and tried to pivot to an e-commerce hub, but nothing has stuck. This compensation package feels like an attempt to manufacture a similar “moonshot” narrative without the clear, disruptive product roadmap. It puts immense pressure on Cohen to unveil a strategy that justifies a valuation larger than many established, profitable Fortune 500 companies.
Stakeholder Impact: A Volatile Ride
For stakeholders, this means one thing: buckle up for more volatility. For the die-hard retail investors, this is rocket fuel for their thesis. It frames Cohen as a visionary betting it all, which could galvanize the base. For more traditional investors, it’s likely a major red flag—a sign that substantive, incremental turnaround plans are off the table in favor of a Hail Mary. Employees and suppliers are left in a weird limbo, working for a company whose leadership’s pay is tied to a fantasyland number. The entire structure ensures that GameStop will remain a spectacle, its stock price divorced from traditional metrics like P/E ratios and tied instead to the belief (or disbelief) in a $100 billion future. Basically, the meme stock era is officially institutionalized into the C-suite.
