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echelon • today at 4:28 PM • 2 replies • view on HN

Here's the biggest reason why -

GameStop CEO Ryan Cohen gets a performance pay if the market cap goes up:

> The total award consists of stock options to purchase 171,537,327 shares of the Company's Class A common stock at a price of $20.66 per share.

  Tranche  Award%  Market Cap Hurdle  EBITDA Hurdle
   
  1  10%   $20 Billion    $2.0 Billion
  2  10%   $30 Billion    $3.0 Billion
  3  10%   $40 Billion    $4.0 Billion
  4  10%   $50 Billion    $5.0 Billion
  5  10%   $60 Billion    $6.0 Billion
  6  10%   $70 Billion    $7.0 Billion
  7  10%   $80 Billion    $8.0 Billion
  8  15%   $90 Billion    $9.0 Billion
  9  15%   $100 Billion   $10.0 Billion
Swallowing a new company, even if it takes on debt, can bump this up.

eBay market cap is $48B.

https://investor.gamestop.com/news-releases/news-details/202...

Replies

tomku • today at 4:55 PM

There's a section of his pay package that says:

  The Performance Hurdles will be adjusted by the Committee equitably and proportionately as determined by the Committee in a manner designed to preserve the economic opportunity provided under the Award, (a) higher to account for acquisition activity for which stock is provided as consideration; and (b) lower to account for a split-up, spin-off, dividend or other distribution (whether in the form of cash, shares, other securities, or other property) or divestiture activity, in each case, that could be considered material to the achievement of the Performance Hurdles, as applicable.
Matt Levine's recent opinion piece for Bloomberg ("GameStop Doesn’t Have Enough Stock", https://archive.ph/3h8wf) goes into a bit more detail about it, including why such an acquisition might still help him get there even if it doesn't instantly get him halfway.
shimman • today at 4:34 PM

There's nothing in Ryan Cohen's career that instills confidence to me. He seems like another tech leader that just got lucky at selling their company (which was only unprofitable for the majority of its lifetime until very very recently) during an economic era that is unlikely to return in any of our lifetimes (or our children's lifetimes).