Can Ryan Cohen's Record-Breaking Incentive Plan Drive GameStop to a $100 Billion Valuation?

GameStop’s board of directors just unveiled an audacious bet on its chief executive. The retailer is dangling a potentially staggering $35 billion performance award in front of Cohen, the visionary who took control of the troubled video game retailer in late 2023. This compensation structure mirrors a similar strategy Tesla employed with CEO Elon Musk, whose shareholders greenlit a potentially $1 trillion pay package tied to aggressive financial targets.

The scale of Cohen’s incentive is breathtaking: stock options to purchase 171.5 million GameStop shares at $20.66 per share—a nominal value exceeding $3.5 billion. To unlock the full $35 billion prize, however, Cohen must orchestrate a corporate transformation that few executives have achieved. GameStop needs to reach $10 billion in EBITDA and push its market capitalization to $100 billion.

The Unprecedented $35 Billion Carrot: Understanding Cohen’s Performance-Based Compensation

Unlike traditional salary or guaranteed equity packages, Cohen’s compensation plan is pure meritocracy. He receives nothing if targets aren’t met—no salary, no bonuses, no time-based vesting. This all-or-nothing structure creates extraordinary incentive alignment between executive and shareholder.

The plan unfolds in tranches, rewarding intermediate milestones. The first payout triggers when GameStop achieves a $20 billion market cap and $2 billion in annual EBITDA—representing just 10% of the total award. The progression continues with escalating thresholds, culminating in the full $35 billion when both the $100 billion valuation and $10 billion EBITDA target are achieved.

Where does the company currently stand? Through the first three quarters of 2025, GameStop generated approximately $136 million in EBITDA. The market cap currently sits at $5.08 million (as of February 2026), suggesting a monumental climb lies ahead. Shareholders will need to approve this audacious plan at a special meeting scheduled for March or April.

GameStop’s Turnaround: Three-Part Business Transformation Under Cohen’s Leadership

Since Cohen assumed the helm, he has executed a deliberate operational restructuring that’s already bearing fruit. The strategy centers on three levers: contracting the brick-and-mortar footprint, expanding the collectibles business, and stabilizing the hardware division.

The collectibles segment has emerged as a growth engine, now representing nearly 28% of total revenue through the first three quarters of 2025. This shift is meaningful—collectibles carry higher margins and demonstrate consumer appetite for GameStop beyond traditional gaming products. The hardware business, once the largest profit driver, continues its decline but at a decelerating pace.

The software division—selling new and pre-owned video games—remains under pressure. This business, along with hardware, still accounts for over 70% of GameStop’s total revenue, making their stabilization crucial to the company’s long-term viability. Despite these headwinds, Cohen has managed to drive meaningful improvement in operating cash flow, EBITDA, and profitability compared to prior-year figures.

The Valuation Question: Is GameStop Worth the Risk at Current Multiples?

Here’s where the investment narrative becomes complicated. GameStop currently trades at approximately 27 times its annualized 2025 earnings—a premium valuation for a company struggling to reverse decline in two major business segments representing the bulk of revenue.

The math doesn’t immediately align with fundamentals. Going from $136 million in EBITDA to $10 billion represents a 73-fold increase. To reach a $100 billion market cap from the current $5.08 million requires an 19,685x multiple increase. While ambitious targets are Cohen’s hallmark, the magnitude of change required pushes credibility for traditional valuation frameworks.

The company’s trading history adds another layer of complexity. GameStop will likely retain what market observers call “meme magic”—the speculative enthusiasm that periodically inflates its stock price independent of fundamentals. This retail-driven trading dynamic introduces volatility that can obscure underlying business value.

What This Means for Investors: Beyond the Incentive Plan

Cohen is demonstrably capable. His previous track record, combined with his 9% ownership stake, aligns his interests with shareholders. The incentive structure undeniably motivates aggressive value creation. Yet capability and incentives alone don’t guarantee success in a challenging retail environment.

For investors contemplating entry, the risk-reward calculus presents a genuine dilemma. The upside—if Cohen executes his vision—could deliver life-changing returns. But the downside mirrors that of any turnaround play: years of operational uncertainty, competitive pressures from digital distribution, and no guarantee that even Cohen’s talents can overcome systemic industry headwinds.

The performance award signals confidence from GameStop’s board in Cohen’s abilities. Whether that confidence aligns with investment reality remains the critical question for portfolio managers weighing risk against potential return.