Analysis Report on GameStop (GME) CEO Ryan Cohen's Performance-Based Stock Option Incentive Plan

Based on the comprehensive data collected, I now provide a detailed analysis report for you.

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GameStop Corp. announced a landmark performance-based stock option grant to its Chairman and CEO Ryan Cohen on January 7, 2026. Designed to incentivize Cohen to achieve “extraordinary growth”, the plan has a potential value of up to

if all targets are met [1][2]. Structurally highly similar to the compensation package previously granted to Elon Musk by Tesla (Tesla), this incentive plan represents a classic case of the “all-risk” incentive model in executive compensation [3].

Metric	Value
Current Market Capitalization	$9.59B
Target Market Capitalization	$100B
Required Growth Rate	943%
Option Exercise Price	$20.66/share
Number of Option Shares	171,537,327 shares
Target Stock Price (to achieve $100B market cap)	$222.87
Target Cumulative EBITDA	$10B
Maximum Potential Payout	~$34.7B

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The core feature of this incentive plan is its

, which stands in stark contrast to traditional CEO compensation:

Traditional CEO Compensation	Cohen’s Incentive Plan
Fixed Annual Salary	No Fixed Compensation
Cash Bonus	No Cash Incentives
Time-Vested Stock	No Pure Time-Vested Shares
Guaranteed Income	100% At-Risk Compensation

As stated in the company’s filing with the SEC: “His compensation is fully ‘at-risk’, meaning he will only receive payment if the company achieves significant market and operational goals. This structure ensures that Mr. Cohen’s incentives are directly aligned with creating long-term value for GameStop shareholders” [4][5].

The award is divided into

, each of which requires meeting both a and a to vest; there is no pro-rata or partial vesting:

Tranche	Vesting Percentage	Market Cap Threshold	Cumulative EBITDA Threshold
1	10%	$20B	$2.0B
2	10%	$30B	$3.0B
3	10%	$40B	$4.0B
4	10%	$50B	$5.0B
5	10%	$60B	$6.0B
6	10%	$70B	$7.0B
7	10%	$80B	$8.0B
8	15%	$90B	$9.0B
9	15%	$100B	$10.0B

: If the company fails to meet the minimum threshold ($20B market cap + $2B cumulative EBITDA), all options will not vest, and Cohen will receive no compensation [4][6].

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Since Ryan Cohen joined the board in January 2021, the company has experienced significant financial improvement [4]:

Metric	2021	Current (TTM)	Change
Market Capitalization	$1.3B	$9.3B	+615%
SG&A Expenses	$1.7B	$950.8M	-44.4%
Net Profit	-$381.3M	+$421.8M	Turned from loss to profit

Under Cohen’s leadership, GameStop is implementing a multi-layered strategic transformation:

1. Cost Structure Optimization
   : Closed a large number of physical stores (590 U.S. stores closed in FY2024, with 200 more expected to close in January 2025) [7]
2. International Contraction
   : Exited the Austrian, Irish, Swiss, German, Italian, and Canadian markets, and is in the process of selling its French business [7]
3. Diversified Asset Allocation
   : Allocated a large portion of cash to cryptocurrencies (Bitcoin) [8][9]
4. Business Focus Adjustment
   : Shifted from traditional physical retail to e-commerce and digital assets

Metric	Q3 FY2025	YoY Change
Revenue	$821M	-4.6%
EPS	$0.24	20% above expectations
Net Profit Margin	11.08%	Significantly improved
Current Ratio	10.39	Financially healthy

The company’s FY2025 revenue has dropped by over 35% compared to 2022, and its stock price has fallen by 80% from its 2021 all-time high [7].

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The incentive plan, through its dual-threshold design, effectively binds Cohen’s personal interests closely to shareholder returns and the company’s fundamental performance:

:

• Market Capitalization Threshold
  : Ensures Cohen’s rewards are directly tied to shareholder wealth growth
• EBITDA Threshold
  : Prevents achieving stock price increases through pure market speculation (such as meme stock hype) without improving fundamentals
• Dual Verification Mechanism
  : Prevents Cohen from inflating stock prices through high-risk behaviors (such as excessive leverage)

:

• The targets are extremely aggressive, which may induce
  short-termist
  behaviors
• High-risk investments like the Bitcoin strategy may stem from performance pressure [10]
• The $100B target may require a
  complete business model transformation
  far beyond the scope of traditional retail

Dimension	Assessment
Risk-Adjusted Return Alignment	Extremely High — 100% at-risk compensation structure
Long-Term Value Orientation	High — Cumulative EBITDA rather than annual metrics
Mitigation of Moral Hazard	Medium — No rewards if minimum threshold is not met
Achievability	Low — Requires 943% growth, extremely challenging

Comparison Dimension	GameStop (Cohen)	Tesla (Musk)
Target Market Cap Growth	$9.3B → $100B (+943%)	Similar level of growth
Incentive Type	171.5 million share options	Similar option structure
Minimum Threshold	$20B market cap + $2B EBITDA	Has similar minimum threshold
Execution Risk	Extremely High — Traditional retail industry transformation	Extremely High — New entrant in the automotive industry

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Achieving the $100B market cap target requires one or a combination of the following pathways:

Pathway	Requirements	Difficulty
Stock Price Increase	$21.42 → $222.87 (+940%)	Extremely High
Business Expansion	Substantial revenue growth	High
Profit Margin Improvement	Significant enhancement of profitability	High
Strategic Mergers & Acquisitions	Major acquisitions	Medium
Cryptocurrency Returns	Success of Bitcoin investment	High Volatility

:

• Special General Meeting of Shareholders:
  March or April 2026
• Cohen will
  recuse himself from voting
  [4][6]

:

• The compensation package was independently evaluated by a third-party compensation consulting firm
• Cohen did not participate in the board’s vote on the package
• Fully transparent information disclosure

If all options vest, 171.5 million shares will be exercised. At the exercise price of $20.66 per share, the company will receive approximately

in cash, while Cohen will receive the corresponding shares. This structural design ensures:

• If the market cap reaches $100B, the stock price will be approximately $222.87, so exercising the options will yield profits
• If targets are not met, there will be no dilution effect
• Shareholders only bear dilution after actual value is created

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Metric	Value
Consensus Rating	Hold (55.6% of analysts)
Target Price	$18.25 (14.8% below current price)
Target Price Range	$11.50 - $25.00
Buy Ratings	16.7%
Sell Ratings	27.8%

Metric	Value	Signal
Current Price	$21.42	-
50-Day Moving Average	$21.68	Slightly below the moving average
200-Day Moving Average	$24.20	Significantly below the moving average
52-Week Volatility	37.47%	High Volatility
1-Year Return	-35.01%	Weak

1. Business Transformation Risk
   : The transformation from traditional retail to cryptocurrencies and digital assets carries high uncertainty
2. Market Competition Risk
   : Digital game distribution platforms continue to erode the physical game retail market
3. Execution Risk
   : The 943% market cap growth target is extremely aggressive
4. Regulatory Risk
   : Cryptocurrency investments face changes in regulatory policies across different countries
5. Stock Price Volatility Risk
   : As a “Meme stock”, the stock price may fluctuate drastically

1. Bitcoin Strategy
   : If the cryptocurrency market continues to perform well, it may provide excess returns
2. Cost Structure Optimization
   : Ongoing store integration and efficiency improvements
3. Cash Reserve Advantage
   : Sufficient cash provides strategic flexibility
4. Brand Value
   : The GameStop brand still has influence among gamers

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The performance-based stock option incentive plan granted by GameStop to CEO Ryan Cohen is a

compensation arrangement, with the following characteristics in modern corporate governance:

1. Extremely High Incentive Alignment
   : 100% at-risk compensation ensures Cohen only receives rewards after creating substantial value for shareholders
2. Extremely Challenging Targets
   : The 943% market cap growth and $10B cumulative EBITDA targets require a revolutionary business transformation
3. Sound Governance Structure
   : Independent evaluation, recusal from voting, and fully transparent disclosure reflect good corporate governance practices
4. Shareholder Value Depends on Strategy Execution
   : The ultimate value of the plan depends on Cohen’s ability to successfully transform GameStop from a traditional retailer into a new enterprise with digital asset allocation
5. Risks and Opportunities Coexist
   : For investors willing to bear high volatility and optimistic about the cryptocurrency strategy, this incentive plan provides exposure to highly aligned interests between management and shareholders

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[1] CNN Business - “GameStop CEO Ryan Cohen could be set for a $35 billion payday” (https://www.cnn.com/2026/01/07/business/gamestop-ceo-ryan-cohen-compensation-package)

[2] Retail TouchPoints - “GameStop Closing up to 200 Stores this Month as Board Approves 35B Performance-Based Pay Package for CEO” (https://www.retailtouchpoints.com/features/financial-news/gamestop-closing-up-to-200-stores-this-month-as-board-approves-35b-performance-based-pay-package-for-ceo)

[3] U.S. News - “GameStop Details CEO’s Compensation Package Which Doesn’t Include Any Guaranteed Pay” (https://www.usnews.com/news/best-states/texas/articles/2026-01-07/gamestop-details-ceos-compensation-package-which-doesnt-include-any-guaranteed-pay)

[4] GameStop SEC 8-K Filing (2026-01-07) - “GameStop Announces Long-Term Performance Award for Ryan Cohen” (https://www.sec.gov/Archives/edgar/data/1326380/000132638026000004/gme-20260106.htm)

[5] Yahoo Finance - “GameStop details CEO’s compensation package which doesn’t include any guaranteed pay” (https://finance.yahoo.com/news/gamestop-details-ceos-compensation-package-140537446.html)

[6] GameStop Investor Relations - “GameStop Announces Long-Term Performance Award for Ryan Cohen” (https://investor.gamestop.com/news-releases/news-details/2026/GameStop-Announces-Long-Term-Performance-Award-for-Ryan-Cohen/default.aspx)

[7] Benzinga - “GameStop Stock Near 52-Week Lows: Can Cohen’s New Deal Spark A Turnaround?” (https://www.benzinga.com/trading-ideas/movers/26/01/49796883/gamestop-stock-near-52-week-lows-can-cohens-new-deal-spark-a-turnaround)

[8] IG - “GameStop Q1 2025 Earnings Preview: Bitcoin Strategy Takes Center Stage” (https://www.ig.com/en/news-and-trade-ideas/gamestop-q1-2025-earnings-preview--bitcoin-investment-adds-new-d-250602)

[9] Financial Content - “GameStop’s Crypto Coup: Unexpected Profitability and Bold Bitcoin Bet” (https://markets.financialcontent.com/redlandsdailyfacts/article/marketminute-2025-9-9-gamestops-crypto-coup-unexpected-profitability-and-bold-bitcoin-bet-ignite-market-buzz)

[10] SSRN - “GameStop’s Bitcoin Strategy: An Analysis of Irrationality” (https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5198211)