Ryan Cohen's $35 Billion Upside: Can GameStop's CEO Deliver on the Promise?

GameStop recently unveiled an ambitious long-term incentive plan for CEO Ryan Cohen, potentially worth over $35 billion if he can hit aggressive performance targets. The announcement mirrors Tesla’s massive compensation structure for Elon Musk, signaling GameStop’s board confidence in Cohen’s ability to turnaround the struggling retail gaming company. But with the stock facing headwinds and the plan requiring shareholder approval this spring, the question remains: is this the catalyst investors have been waiting for?

The Incentive Blueprint: How Ryan Cohen’s Compensation Plan Works

Ryan Cohen, who took over as CEO in late 2023, operates under a performance-based model unlike traditional executive pay structures. Under the plan, Cohen receives no guaranteed salary, cash bonuses, or time-based stock vesting. Instead, his entire compensation hinges on hitting specific milestones tied to company earnings and market value.

The centerpiece involves stock options to purchase 171.5 million shares at $20.66 each—representing a $3.5 billion grant. The full award unlocks if GameStop achieves $10 billion in EBITDA and reaches a $100 billion market cap, at which point Cohen’s package swells to $35 billion. However, compensation vests in tranches as interim targets are met. The first 10% tranche triggers when GameStop hits $20 billion market cap and $2 billion EBITDA simultaneously.

This structure keeps Ryan Cohen deeply aligned with shareholder returns. He owns over 9% of outstanding shares, further tying his financial fate to company performance. Shareholders must ratify the plan at a special meeting scheduled for March or April 2026.

GameStop’s Business Turnaround: Progress and Persistent Challenges

Over the past year, GameStop has made tangible improvements in its financial profile, largely through rightsizing its physical store footprint and growing its collectibles business. The collectibles segment now accounts for nearly 28% of total revenue through 2025’s first three quarters, demonstrating meaningful business diversification away from traditional video game sales.

Ryan Cohen’s tenure has yielded concrete results: operating cash flow, EBITDA, and earnings have all expanded significantly year-over-year. However, the turnaround remains incomplete. GameStop’s software business—selling new and pre-owned games—has contracted meaningfully. Hardware sales, involving video game consoles, have declined as well, though not as sharply. These two segments still generate over 70% of total revenue, creating vulnerability if the decline accelerates.

Through the first ten months of 2025, GameStop generated approximately $136 million in EBITDA. For Ryan Cohen to unlock even the first 10% of his incentive, the company must nearly 15x that figure to $2 billion EBITDA while simultaneously reaching a $20 billion market cap. Reaching the maximum $35 billion award requires scaling EBITDA over 70 times current levels.

Is This a Sound Investment? The Valuation Question

Despite operational improvements, GameStop trades at roughly 27 times annualized 2025 earnings—a valuation multiple that seems elevated for a company with mixed fundamental trends. Two of its three major business segments face ongoing headwinds, and revenue stabilization remains uncertain.

Ryan Cohen is undoubtedly a capable executive with proven track records at other ventures. The new incentive structure provides unprecedented motivation to drive performance. Yet even accounting for recent improvements and Cohen’s personal ownership stake, fundamental metrics suggest caution. GameStop will likely always retain its “meme stock” status, creating unpredictable price swings divorced from earnings power.

Investors considering GameStop should weigh the genuine business progress against the steep valuation and structural industry challenges. While Ryan Cohen’s ambitious compensation plan signals serious intent, translating it into 10x returns requires execution on an extraordinary scale. The March or April shareholder vote will represent one inflection point, but the real test comes in the quarters and years ahead.