GameStop's $35 Billion Bet on Ryan Cohen: Can the CEO Deliver the Turnaround?

GameStop announced a bold compensation structure for Chief Executive Ryan Cohen that could be worth over $35 billion if he meets aggressive growth targets. The retail gaming company is betting heavily on Cohen’s leadership to transform the business—and now shareholders will decide whether this massive incentive aligns with their vision for recovery. The approval process moves to a shareholder vote scheduled for early 2026.

Ryan Cohen’s Incentive Plan: From Stock Options to Billion-Dollar Targets

The compensation framework awarded to Cohen mirrors strategies gaining traction in Silicon Valley, most notably Tesla’s recent $1 trillion package for CEO Elon Musk. Under GameStop’s structure, Cohen receives no guaranteed salary, cash bonuses, or time-vested stock. Instead, his earnings depend entirely on achieving predefined milestones.

The deal grants Cohen stock options to purchase 171.5 million shares priced at $20.66 each, representing over $3.5 billion in underlying value. To unlock the complete award worth exceeding $35 billion, GameStop must achieve two critical thresholds: generating $10 billion in EBITDA (earnings before interest, taxes, depreciation, and amortization) and reaching a $100 billion market capitalization.

The incentive structure includes staged releases. The first installment—representing 10% of the total award—triggers when the company reaches a $20 billion market cap alongside $2 billion in EBITDA. This tiered approach aligns Cohen’s interests with incremental value creation rather than a single massive target.

The Turnaround Progress: From Hardware Decline to Collectibles Growth

Before accepting the CEO role in late 2023, Cohen had been strategically building his stake in GameStop during its 2021 rally. Now, three years into his involvement and nearly two years as chief executive, his operational decisions are reshaping the company’s revenue streams.

GameStop’s business spans three segments: hardware (video game consoles), software (new and pre-owned games), and collectibles. The hardware division, historically the largest revenue driver, continues declining but at a decelerating pace. Software—the company’s traditional strength—has faced steeper headwinds. Meanwhile, the collectibles business has surged, now representing approximately 28% of total revenue through the first three quarters of 2025 and driving significant year-over-year growth.

These shifts have produced tangible financial improvements. Through the first nine months of 2025, GameStop generated approximately $136 million in EBITDA—a substantial improvement from prior periods. Operating cash flow and earnings have similarly strengthened, reflecting the successful repositioning away from declining retail segments toward higher-margin categories.

Cohen himself owns more than 9% of outstanding shares, creating personal financial alignment beyond the compensation package. His dual incentive structure—ownership stake plus performance-based compensation—theoretically motivates aggressive execution.

Market Valuation: The Gap Between Potential and Present Reality

Despite operational improvements, GameStop’s valuation presents a compelling tension. The company currently trades at approximately 27 times its annualized 2025 earnings—a substantial multiple for a retailer still dependent on two declining business segments that collectively represent over 70% of revenue.

The path from today’s market capitalization of roughly $10.3 billion to the $100 billion target needed to fully unlock Cohen’s award requires ten-fold growth. While not impossible in principle, achieving this requires sustained execution across multiple fronts: stabilizing hardware and software revenues while scaling collectibles, managing operational cash flow, and navigating an inherently volatile retail landscape.

GameStop’s stock has long benefited from “meme magic”—the phenomenon where social media enthusiasm and retail investor sentiment amplify price movements beyond fundamental analysis. This dynamic adds unpredictability to both upside and downside scenarios, complicating traditional valuation frameworks.

The Investment Question: Fundamental Reality Versus Incentive Structure

The incentive architecture represents a shrewd alignment tool for shareholders, essentially betting $35 billion worth of dilution that Cohen possesses the capability to execute a multi-year transformation. His track record as a successful investor and operational strategist provides credibility.

However, current market conditions and valuation metrics suggest caution. The 27x earnings multiple combined with revenue stabilization challenges in major business lines implies substantial risk. Even with Cohen’s incentives aligned and fresh strategic direction, the company must demonstrate consistent execution through multiple business cycles.

The collectibles pivot shows promise and hints at genuine strategic repositioning. Yet until hardware and software stabilization becomes visible in sustained financial results, the growth narrative remains aspirational rather than proven.

What Comes Next

GameStop shareholders will vote on the incentive plan in early 2026. Approval would commit the company to the transformational agenda embodied in Cohen’s compensation structure. Rejection would signal investor skepticism about the turnaround thesis or concerns about shareholder dilution.

From an investment standpoint, the decision hinges on conviction regarding both Cohen’s execution capability and GameStop’s ability to complete its business model transition. The $35 billion incentive bet reflects management’s confidence. Whether that confidence proves justified will depend on quarterly financial results, industry trends, and the retail gaming landscape’s continued evolution.