Ryan Cohen's $35 Billion Gamble: Will GameStop Achieve Its Ambitious 10x Growth Target?

GameStop has announced a potentially transformative long-term compensation package for CEO Ryan Cohen, modeled after the ambitious pay structure that Tesla’s board designed for CEO Elon Musk. The plan represents one of the most substantial performance-based awards in recent corporate history, with Cohen’s total compensation potentially reaching $35 billion if the company hits extremely challenging financial milestones. This move signals GameStop’s board confidence in Ryan Cohen’s ability to reinvent the struggling retailer while also demonstrating the high stakes the company believes are necessary to attract and retain world-class leadership.

The Structure Behind Ryan Cohen’s Historic Incentive Plan

Under the proposed arrangement, Ryan Cohen will receive no guaranteed compensation through base salary, cash bonuses, or traditional stock vesting. Instead, his entire reward package hinges on GameStop achieving specific performance thresholds. The company plans to grant Cohen stock options to purchase over 171.5 million shares at an exercise price of $20.66 per share, representing approximately $3.5 billion in option value.

The full $35 billion award becomes achievable only if GameStop reaches extraordinary targets: generating $10 billion in annual EBITDA and achieving a $100 billion market capitalization. The incentive structure includes graduated tranches that vest at intermediate milestones. For instance, Ryan Cohen would unlock the first 10% tranche by reaching a $20 billion market cap while the company generates $2 billion in EBITDA. This tiered approach means investors and stakeholders will have multiple opportunities to evaluate the plan’s credibility and Ryan Cohen’s execution capability over time.

Notably, shareholders still must approve this compensation structure at a special meeting expected in March or April 2026.

Evaluating GameStop’s Progress Under Ryan Cohen’s Leadership

Since taking the CEO role in late 2023, Ryan Cohen has implemented operational improvements that have begun stabilizing GameStop’s financial performance. The company’s strategy has centered on shrinking its unprofitable brick-and-mortar footprint while aggressively expanding its collectibles business—a segment that now represents nearly 28% of total revenue through 2025’s first three quarters.

The collectibles division stands out as the brightest spot in GameStop’s portfolio, demonstrating significant year-over-year revenue growth. However, challenges persist in two of GameStop’s largest revenue generators. The software division, which handles new and pre-owned video game sales, has experienced substantial declines. The hardware business, focusing on video game console sales, continues deteriorating though at a slower pace than software. Combined, these two segments accounted for over 70% of GameStop’s revenue, making their weakness a considerable concern.

Despite these headwinds, Ryan Cohen’s operational initiatives have driven measurable improvements in cash flow generation and profitability metrics. Through nearly ten months of 2025, GameStop generated approximately $136 million in EBITDA. The company has also seen marked improvements in operating cash flow and earnings, suggesting that at least some of his strategic adjustments are taking effect.

The Mathematical Challenge Ahead

GameStop currently trades at roughly 27 times its annualized 2025 earnings, presenting a valuation that appears stretched for a company still grappling with revenue headwinds in its two largest business segments. As of early February 2026, GameStop’s market capitalization stands at approximately $4.39 million, representing a significant decline from the $10.3 billion valuation referenced in earlier discussions. The stock has also experienced near-term weakness, declining approximately 8.83% over the previous 24-hour period.

For Ryan Cohen’s $35 billion incentive package to fully vest, GameStop would need to achieve roughly 73 times its current EBITDA generation—a transformation that would require revolutionary business model changes, significant new revenue streams, or an unprecedented market valuation expansion. Reaching the first milestone of $20 billion market cap and $2 billion EBITDA remains an enormous undertaking for a company whose largest historical strength (hardware sales) continues to weaken.

Understanding the Investment Implications

Ryan Cohen has demonstrated genuine operational competence, and his personal ownership stake of over 9% of outstanding shares creates meaningful alignment with other shareholders’ interests. However, the company’s fundamental challenges cannot be ignored. GameStop faces the perpetual challenge of transitioning from a declining traditional retail model to something sustainable and scalable in an increasingly digital entertainment ecosystem.

Historically, companies with similar compensation structures tied to extraordinary growth targets have proven to be high-risk, high-reward investments. While exceptional leadership can sometimes deliver transformational results, the probability of success remains materially below 50% for most such arrangements. GameStop’s case is further complicated by secular industry headwinds that even the most capable CEO cannot entirely overcome.

The proposal undoubtedly incentivizes Ryan Cohen to pursue aggressive strategic initiatives that could fundamentally reshape GameStop’s business. Whether those initiatives can generate the revenue and profitability growth necessary to justify a $100 billion valuation and $10 billion EBITDA remains the critical question that investors must answer independently before committing capital to GameStop stock.