Ryan Cohen's Path to $35 Billion: Can GameStop's New CEO Incentive Plan Transform the Stock?

Ryan Cohen, GameStop’s CEO since late 2023, now has one of the most ambitious compensation packages in corporate America. The company’s board of directors has designed a performance-based award that could potentially reach $35 billion if Cohen successfully achieves unprecedented growth targets. This move mirrors Tesla’s strategy with Elon Musk, signaling a significant shift in how retail companies are approaching executive incentives.

The Ambitious Incentive Package for Ryan Cohen

GameStop plans to grant Cohen stock options allowing him to purchase over 171.5 million shares at $20.66 per share—representing more than $3.5 billion in base value. However, the entire compensation structure hinges on hitting specific milestones rather than guaranteed payments.

The mechanics are straightforward: Cohen receives no salary, cash bonuses, or time-vesting stock. Instead, tranches of the award unlock as GameStop reaches predetermined thresholds. The first 10% vests when the company achieves a $20 billion market cap and $2 billion in EBITDA. To unlock the complete package worth over $35 billion, GameStop must reach a $100 billion market cap and generate $10 billion in EBITDA.

Currently, GameStop trades at approximately $4.33 million in market capitalization (as of February 2026), down 8.83% from recent levels. Through the first ten months of 2025, the company generated roughly $136 million in EBITDA. Shareholders must approve this plan at a special meeting scheduled for March or April.

GameStop’s Business Transformation: Progress and Challenges

Cohen has made measurable progress in reshaping GameStop’s operations. The company has strategically reduced its brick-and-mortar footprint while expanding its higher-margin collectibles business, which now represents nearly 28% of total revenue in 2025. This business segment has driven meaningful revenue growth this year.

However, challenges persist in core segments. The software business, which sells new and pre-owned video games, has experienced significant decline. The hardware business—GameStop’s largest revenue generator covering over 70% of total income when combined with software—continues to shrink, though at a slower rate than software sales.

Despite these headwinds, the company has demonstrated improvement in key financial metrics. Operating cash flow, EBITDA, and earnings have all improved notably through 2025, suggesting that Cohen’s restructuring efforts are beginning to yield results.

The Valuation Question: Can the Numbers Add Up?

Here lies the critical tension: GameStop currently trades at approximately 27 times its annualized 2025 earnings. For a company struggling to stabilize revenue in two of its three primary business segments—which together generate over 70% of total revenue—this valuation appears stretched.

To achieve a $100 billion market cap (the threshold for Ryan Cohen’s maximum payout), GameStop’s value would need to increase roughly 23-fold from current levels. Reaching $10 billion in EBITDA requires approximately 73 times the EBITDA the company generated in the first ten months of 2025. These are extraordinary targets for any retail-focused business to accomplish.

The incentive structure, while innovative, creates misalignment between the stock’s current valuation and the fundamental improvements required to justify it. Ryan Cohen’s interests are aligned with shareholders in theory, but the practical path to hitting these targets remains unclear.

Investment Perspective: When Incentives Aren’t Enough

GameStop’s stock will likely continue to experience price volatility driven by retail investor sentiment and cultural “meme” status—factors that transcend traditional fundamental analysis. Yet from a purely financial standpoint, several concerns emerge.

Ryan Cohen has demonstrated capability as a CEO and already owns over 9% of outstanding shares, providing significant personal stake alignment. The performance-based compensation structure eliminates excessive compensation during periods of underperformance. These are positive signs.

But recognizing progress doesn’t automatically translate to a compelling investment case. The company continues restructuring rather than demonstrating sustainable growth in its largest revenue streams. The valuation multiple leaves little room for disappointment. And the targets required for maximum incentive payout appear economically challenging without fundamental disruption to the business model.

Before committing capital to GameStop, investors should carefully weigh whether the company’s operational improvements and Ryan Cohen’s demonstrated capability justify the current valuation, regardless of future incentive potential. The story is improving, but the investment case still requires significant execution on fundamentals.