Ryan Cohen's $35 Billion Incentive: Can GameStop Achieve the Impossible?

GameStop recently unveiled an ambitious plan to retain CEO Ryan Cohen through a potentially massive performance-based compensation package that could be worth over $35 billion if the company hits extraordinary growth targets. This move mirrors Tesla’s approach with Elon Musk, signaling that the retail gaming retailer is serious about driving transformation. However, with shareholders still needing to approve the plan at a special meeting scheduled for March or April 2026, key questions remain: Is this incentive structure realistic, and should investors take another look at GameStop?

The Performance Award Structure and How It Works

Under the arrangement being proposed, Ryan Cohen receives no guaranteed compensation through salary, cash bonuses, or traditional equity grants. Instead, his entire reward depends on achieving aggressive EBITDA and market capitalization milestones.

The core of the package involves stock options to purchase over 171.5 million shares at $20.66 per share—representing a potential value exceeding $3.5 billion at that strike price. For Ryan Cohen to unlock the full $35 billion award, GameStop must reach two monumental targets: achieving $10 billion in annual EBITDA and reaching a $100 billion market capitalization. The award vests in tranches as the company hits intermediate thresholds. The initial tranche, representing 10% of the total incentive, triggers when GameStop reaches a $20 billion market cap and $2 billion in EBITDA.

This structure differs markedly from traditional CEO compensation and creates extreme alignment between Ryan Cohen’s interests and shareholder returns. As it stands, Ryan Cohen already owns over 9% of outstanding shares, meaning he has substantial personal wealth tied to company performance.

Signs of Progress Amid Lingering Business Challenges

Since Ryan Cohen assumed leadership in late 2023, GameStop has made meaningful operational improvements. The company has systematically reduced its brick-and-mortar footprint while investing in higher-margin businesses. The collectibles segment has emerged as a bright spot, now representing nearly 28% of total revenue through the first three quarters of 2025, and showing significant growth this year compared to prior periods.

However, progress remains uneven. The software business, which handles new and pre-owned video game sales, continues declining substantially. Hardware sales—traditionally the company’s largest revenue driver—remain under pressure, though the rate of decline has decelerated. Through nearly 10 months of 2025, GameStop generated approximately $136 million in EBITDA, demonstrating that profitability improvements are occurring, and operating cash flow metrics have notably strengthened.

Evaluating the Path to $100 Billion Valuation

While GameStop has shown operational momentum, the gap between current performance and the targets embedded in Ryan Cohen’s incentive package is immense. Currently trading at roughly $10.3 billion in market value with annualized 2025 earnings supporting a valuation multiple of approximately 27 times earnings, GameStop would need to expand its market cap more than 10-fold to reach $100 billion.

The EBITDA goal of $10 billion annually presents an equally daunting challenge—a roughly 73-fold increase from the $136 million generated in the first ten months of 2025. Achieving this would require dramatic revenue acceleration and margin expansion across the entire business. While the incentive structure creates powerful motivation for Ryan Cohen, the mathematical requirements suggest an extremely steep climb.

Is This the Right Time for Investors to Get Involved?

The fundamental question investors must ask: Can a compensation package alone transform GameStop into a company capable of sustaining a $100 billion valuation? Ryan Cohen has demonstrated operational competence by improving cash flow and margins, yet two of GameStop’s major business segments—representing over 70% of total revenue—remain structurally challenged.

The company’s valuation currently reflects some speculative optimism about turnaround potential. At 27 times trailing earnings, investors are paying a premium multiple for a retailer still grappling with secular headwinds in physical game sales and hardware distribution. While the collectibles business shows promise, it would need to expand dramatically to offset legacy business declines.

For investors considering GameStop at current levels, the massive incentive package for Ryan Cohen serves as both a positive sign of management’s confidence and a reminder of how far the company must travel to achieve its targets. The answer to whether to invest depends on your conviction that GameStop can reinvent its business model sufficiently to justify a 10-fold increase in valuation over the coming years.