Ryan Cohen's Path to $35 Billion: Can GameStop Make This Bet Pay Off?

GameStop’s board of directors recently unveiled an audacious compensation plan for CEO Ryan Cohen—one that could be worth over $35 billion if the gaming retailer hits extraordinarily ambitious financial targets. The plan mirrors the approach Tesla took with Elon Musk’s record-breaking compensation package, demonstrating just how determined the board is to align Cohen’s financial interests with shareholder returns.

Under this performance-based structure, Ryan Cohen receives no guaranteed salary, cash bonuses, or time-vested stock. Instead, his entire compensation hinges on GameStop meeting specific growth metrics over the coming years. The company plans to grant Cohen stock options to acquire over 171.5 million shares at a strike price of $20.66—representing an initial option value of approximately $3.5 billion.

The $35 Billion Prize: How the Incentive Structure Works

To unlock the full award, GameStop must accomplish two monumental feats: achieve $10 billion in annual EBITDA (earnings before interest, taxes, depreciation, and amortization) and reach a $100 billion market capitalization. At those levels, Cohen’s options would be worth over $35 billion.

The plan isn’t all-or-nothing. Portions vest in tranches as GameStop hits intermediate milestones. The first tranche—representing 10% of the total award—unlocks when the company reaches $20 billion in market cap and $2 billion in EBITDA. Shareholders will vote on final approval at a special meeting scheduled for March or April 2026.

To put the current state in perspective: as of early 2026, GameStop had generated approximately $136 million in EBITDA during the 2025 fiscal year, while its market capitalization stood around $4.4 billion. This means the company needs roughly 50x growth in market value and over 70x improvement in earnings to hit the maximum threshold—an enormously steep climb.

GameStop’s Business Turnaround: Collectibles Leading the Way

What makes the board’s confidence in Ryan Cohen somewhat justified is the tangible progress the company has already made. GameStop has strategically restructured its operations by shrinking its costly brick-and-mortar footprint while aggressively expanding its collectibles division, which has become a genuine growth engine.

Through 2025, the collectibles business now represents close to 28% of total revenue—a significant shift from its minor role just a few years ago. This segment has driven meaningful improvement in the company’s financial health, boosting operating cash flow and EBITDA.

However, the picture remains mixed. The software business, which sells new and pre-owned video games, continues its decline. The hardware division—GameStop’s largest business involving video game consoles—is also shrinking, though at a slower pace than the software segment. Together, hardware and software still account for over 70% of revenue, so their weakness remains problematic for the overall business model.

Ryan Cohen has demonstrated genuine operational capability through these changes. Additionally, he maintains personal ownership of over 9% of GameStop’s outstanding shares, meaning his wealth is directly tied to shareholder success—a powerful alignment of interests beyond the formal incentive plan.

The Valuation Reality Check: Is GameStop Overpriced?

Despite these operational improvements, a fundamental problem persists: GameStop’s stock valuation appears disconnected from business reality. The company currently trades at approximately 27 times its annualized 2025 earnings—an elevated multiple for a retailer struggling to stabilize revenue in two of its three main business segments.

For context, this valuation multiple is rich relative to the company’s growth prospects and profitability. While the collectibles turnaround is encouraging, it hasn’t yet offset the broader headwinds facing hardware and software sales. Expecting GameStop to transform from a $4.4 billion market cap company to a $100 billion enterprise—a 23x increase—requires sustained execution that goes far beyond current market expectations.

GameStop will likely retain some retail investor enthusiasm that creates occasional price volatility. The stock’s history shows it can experience outsized moves based on sentiment rather than fundamentals. But this volatility shouldn’t be mistaken for true value creation.

The Investment Verdict for GameStop

The Ryan Cohen compensation plan shows a board willing to put serious money behind their CEO’s vision. It demonstrates confidence in his turnaround strategy and creates an intense personal incentive for him to succeed. For current believers in the turnaround narrative, it’s a compelling signal.

However, from a fundamental investment perspective, GameStop presents a challenging risk-reward profile. The company faces a long road to prove it can sustain a viable retail model in an increasingly digital gaming world. Until the core hardware and software businesses stabilize, or until collectibles grows large enough to offset their decline, the current valuation remains a concern.

Investors considering GameStop should weigh their conviction in Ryan Cohen’s execution ability against the premium valuation they’d be paying today. The incentive plan proves Cohen has skin in the game, but that alone doesn’t guarantee the stock becomes a winning investment from current levels.