GameStop CEO drops US$35 billion pay plan to focus on eBay bid

[NEW YORK] GameStop chief executive officer Ryan Cohen withdrew a bonus plan that could have paid him as much as US$35 billion so that his company can be “fully focused on GameStop’s operating performance and its proposed eBay acquisition”.

The video-game retailer said it will release additional materials regarding its proposed buyout of eBay this week, including a detailed presentation of the strategic rationale and an operational plan for the combined companies, according to a statement on Tuesday (Jun 23).

Under a pay plan announced in January, Cohen would have received a windfall if GameStop achieved a US$100 billion market capitalisation and US$10 billion in earnings before interest, taxes, depreciation and amortisation.

The pay package drove some to speculate it was the motivation for GameStop’s US$56 billion takeover proposal for the much larger eBay. The online auctioneer rejected the proposal in May calling it “neither credible nor attractive”.

Last week, an investor filed a proposed class-action suit in Delaware’s Chancery Court in an effort to halt the pay package until shareholders received proper disclosures.

GameStop said in the statement on Tuesday that when its board approved the CEO pay plan it had not yet decided to pursue eBay.

SEE ALSO

eBay rejects GameStop’s US$56 billion bid as ‘neither credible nor attractive’

GameStop CEO says eBay shut his account after buyout funding stunt

GameStop offers to buy eBay for about US$56 billion

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In a separate filing on Tuesday, the company said the terms of the bonus plan would have been adjusted if it used stock to acquire the business. GameStop said the shareholder lawsuit was without merit and that it would vigorously defend itself. The company will hold its annual meeting on Jul 7. BLOOMBERG