GameStop CEO Cohen's Pay Package Tied to Doubling Market Cap to $20 Billion
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 15h ago
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Source: Fool
- Compensation Incentive: GameStop CEO Ryan Cohen's new pay package requires the company to increase its market cap to $20 billion and achieve $2 billion in EBITDA, indicating that the stock price must double to earn any part of the bonus, highlighting significant pressure for future growth.
- Performance Benchmarks: Cohen's compensation plan includes stock options for up to 171,537,237 shares, with 100% of the award contingent on reaching a $100 billion market cap and $10 billion in EBITDA, reflecting the need for nearly an 11-fold increase in stock price.
- Financial Performance Improvement: Under Cohen's leadership, GameStop's market cap has surged from $1.3 billion in January 2021 to $9.5 billion, with EBITDA reaching $222 million over the past 12 months, showcasing significant improvements in cost control and profitability.
- Market Competition Challenges: While Cohen's incentive package may attract investors, GameStop faces fierce competition from other companies, and its revenue has declined by 12% year-over-year to $3.8 billion, leaving the future growth path uncertain.
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About GME
GameStop Corp. offers games and entertainment products through its stores and ecommerce platforms. The Company operates in four geographic segments: United States, Canada, Australia and Europe. Each segment consists primarily of retail operations, with the significant majority focused on games, entertainment products and technology. The Company has a total of approximately 3,203 stores across all of its segments: 2,325 in the United States, 193 in Canada, 374 in Australia, and 311 in Europe. Its stores and ecommerce sites operate primarily under the names GameStop, EB Games and Micromania. Its Australia and Europe segments also include 38 pop culture-themed stores selling collectibles, apparel, gadgets, electronics, toys and other retail products for technology enthusiasts and general consumers in international markets operating under the Zing Pop Culture brand. Its retail stores are generally located in strip centers, shopping malls and pedestrian areas.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
