GameStop investor seeks to halt vote on $35B CEO pay package

A GameStop shareholder has sued to halt a vote on CEO Ryan Cohen’s $35 billion pay package, arguing the company must provide fuller disclosures before investors decide on the award.

The proposed class action, filed Monday in Delaware Chancery Court, challenges the board’s handling of the shareholder vote set for July 7. The complaint says GameStop repeatedly changed the rules around the vote before issuing a misleading proxy statement that could weaken the power of public shareholders.

At issue is whether Cohen can vote his 9.3% stake and how abstentions will be counted. The lawsuit says GameStop previously indicated that Cohen’s shares would be excluded and that unaffiliated stockholders would decide the outcome, before later reversing course in its proxy materials.

The complaint argues the changes could allow Cohen and other insiders to determine the outcome with limited support from public investors.

GameStop announced the performance based stock option award in January. The package would give Cohen no salary, cash bonus, or time vested stock, but could deliver a multibillion dollar windfall if GameStop reaches a $100 billion market capitalization and $10 billion in cumulative performance EBITDA.

The award includes options to buy more than 171.5 million GameStop shares at $20.66 each. If all performance targets are met, the package could be worth roughly $35 billion.

Cohen became one of GameStop’s most influential shareholders in 2020, joined the board in 2021, became chairman later that year, and took over as CEO in 2023. GameStop has framed the award as a way to align his compensation with shareholder returns.

The lawsuit adds another governance flashpoint for GameStop as Cohen looks to build the company beyond its legacy retail business. Earlier this year, eBay rejected his roughly $56 billion takeover proposal, calling it neither credible nor attractive.

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