Ryan Cohen's Epic Stock Option Plan: Can GameStop Deliver the $35 Billion Prize?

GameStop just unveiled an ambitious compensation strategy that could reshape how investors view the company. CEO Ryan Cohen stands to earn potentially $35 billion if he achieves aggressive financial milestones—making this one of the most aggressive performance-based pay packages in retail history.

The structure mirrors Tesla’s approach with CEO Elon Musk, where compensation is entirely performance-driven. But for Ryan Cohen to unlock the full value, GameStop faces daunting challenges that deserve careful scrutiny.

The Architecture of an Audacious Equity Award

Under the plan, Ryan Cohen doesn’t receive guaranteed salary, bonuses, or traditional stock vesting. Instead, GameStop will grant him options to purchase over 171.5 million shares at $20.66 per share—a notional value exceeding $3.5 billion upfront. The real payoff comes only if the company hits specific EBITDA and market cap thresholds.

The incentive structure unfolds in tranches. The first 10% of the award vests when GameStop reaches a $20 billion market cap and $2 billion in EBITDA. The complete award requires the company to achieve $10 billion in EBITDA and a $100 billion market cap valuation. At those levels, Cohen’s holdings become worth approximately $35 billion.

This compensation philosophy stands as one of the most ambitious bets a board has ever made on a single executive. It signals that GameStop’s directors believe Ryan has the capability to execute a transformational turnaround—but it also suggests the company acknowledges how far it must travel to reach viability.

Breaking Down the Current Performance Picture

How close is GameStop to reaching these thresholds? The numbers tell a sobering story. Through the first three quarters of 2025, the company generated roughly $136 million in EBITDA—placing it less than 1.4% toward the $10 billion target. As of early 2026, GameStop’s market cap hovers around $4.54 million in fresh trading data, though historical valuations showed approximately $10.3 billion at the time this strategy was announced.

Progress exists, but it’s uneven across the business. The collectibles division has emerged as the growth engine, now representing approximately 28% of total revenue and demonstrating significant year-over-year expansion. This segment has successfully attracted customers and generated measurable momentum.

However, two critical revenue streams remain under pressure. The software business, focused on selling new and pre-owned video games, continues declining. Hardware sales involving video game consoles show modest improvement but remain down. These two segments together account for over 70% of GameStop’s revenue base, which means stabilizing them represents an existential challenge for achieving the $10 billion EBITDA target.

The Business Transformation That Must Occur

Ryan Cohen took control in late 2023, and his tenure has included meaningful operational improvements. The company methodically reduced its brick-and-mortar footprint while expanding its faster-growing collectibles operation. This portfolio rebalancing has generated genuine improvements in cash flow, EBITDA, and profitability this year compared to prior periods.

The CEO clearly possesses operational capability, and he already owns over 9% of outstanding shares—aligning his interests with minority shareholders. Yet capability alone doesn’t guarantee success when the underlying market dynamics work against you.

The video game software market continues migrating toward digital distribution, away from physical retail. Gaming hardware cycles remain unpredictable. Even as collectibles business shows promise, it’s far too small to offset declines in GameStop’s traditional segments.

The Valuation Question Investors Can’t Ignore

Despite recent progress, GameStop currently trades at approximately 27 times its annualized 2025 earnings. For a company struggling to stabilize revenue in two of its primary business segments, this valuation multiple appears stretched from a fundamental analysis perspective.

The stock maintains what analysts call “meme magic”—speculative interest that creates price volatility disconnected from underlying business value. This dynamic can persist for extended periods, but it’s not a reliable foundation for long-term wealth creation.

The contrast with proven technology investments is stark. When the Motley Fool identified Netflix in December 2004, $1,000 invested at that recommendation grew to $464,439. Similarly, a $1,000 position in Nvidia recommended in April 2005 became worth $1,150,455. These outcomes resulted from businesses executing against genuine market opportunities.

Making the Investment Decision

The central question becomes whether Ryan Cohen can execute one of the most difficult transformations in retail history. The incentive structure provides genuine motivation, but motivation alone doesn’t overcome structural market challenges in gaming retail.

GameStop requires not just incremental improvements but a fundamental reimagining of its value proposition. Collectibles growth is encouraging, but it alone cannot support a $100 billion enterprise valuation. The company needs either a breakthrough in gaming retail (unlikely given digital trends), or it needs to identify entirely new revenue categories—a feat it hasn’t accomplished to date.

Before committing capital to GameStop stocks based on Ryan Cohen’s appointment and pay package, investors should demand clarity on the specific strategy for reaching those financial milestones. Incentive alignment matters, but it doesn’t override the basic mathematics of valuation and market fundamentals.