Gamestop Corp. (GME.N) CEO George Sherman is set to retire this summer with a $ 179 million windfall that dwarfs the CEO’s salaries at much larger companies, thanks to a charity deal signed by the year’s furious meme shares have been compiled.
GameStop said Monday that Sherman will retire by July 31. The struggling U.S. video game retailer is looking for a new leader to work on its transition to e-commerce with chairman Ryan Cohen, the billionaire co-founder and former CEO of online pet supplies. retailer Chewy Inc. (CHWY.N).
GameStop disconnected part of Sherman’s payment from his performance last year in the early months of the COVID-19 pandemic and granted him shares when the shares were worth a small fraction of their current value, according to a Reuters review of security dossiers and interviews with compensation. consultant.
As a condition of his retirement, GameStop accelerates the time frame for Sherman to receive the shares, which generates the award.
GameStop announced last week that Sherman, who has been CEO since April 2019, forfeited $ 98 million worth of stock for failing to meet performance targets.
Still, he will receive a $ 179 million share payout because GameStop has granted him more shares tied to his tenure rather than his performance as most companies do with their CEO, says Eric Hoffmann, a vice president of remuneration consultant Farient. Advisors LLC.
“Investors like performance-based awards, with tough predetermined financial goals that managers have to achieve to earn, as opposed to stocks based on time, where they just have to hang on to get them,” Hoffmann said.
A spokesperson for GameStop, based in Grapevine, Texas, declined to comment. Sherman did not respond to requests for comment. Cohen, GameStop’s largest shareholder with a 13% stake, could not be reached for comment.
The value of Sherman’s severance pay exceeds the annual salaries given to many top US CEOs. Joseph Ianniello, CEO of ViacomCBS Inc (VIAC.O), took home $ 112.9 million in realized salaries in 2019, while JPMorgan Chase & Co (JPM.N)’s Jamie Dimon’s 2019 salary was $ 107.8 million, according to the most recent version of the corporate governance provider. CGLytics.
Other GameStop employees will not participate in Sherman’s windfall. According to the announcement of securities, the retailer has closed hundreds of stores.
GameStop’s shares closed at $ 158.53 on Tuesday, an increase in the stratosphere of about $ 5 last summer, when the company Sherman allotted the majority of the share. They skyrocketed in January when individual retailers on Reddit and other social media platforms snapped them up and pinched short sellers.
Reuters reported last year how some companies are protecting executives from the financial consequences of the pandemic by moving from performance-based to time-based payouts. They argue that the disruption of the market makes it difficult to meet financial targets, and Sherman will benefit from the trend.
Sherman, 59, is being attributed internally to cost reductions and steering GameStop by the pandemic that is disabling other retailers, Reuters reported last week.
But his 25 years of experience has been largely with retailers such as Advance Auto Parts Inc (AAP.N) and Home Depot Inc (HD.N). Cohen wants a top manager with skills better suited to GameStop’s digital transformation, reports Reuters.
ATTENDANCE OF SHARES
GameStop granted Sherman about 925,000 shares in June last year, which he would receive within three years over three years, according to government terms.
He will receive them all at the same time at his retirement under a ‘transition agreement’ negotiated this month, as well as around 200,000 shares that have not been previously settled. The filing does not reveal how GameStop’s board decided on these awards.
Sherman also ended up receiving 308,477 shares allotted last June that were linked to his performance, apart from the shares he forfeited last week. He agreed to also waive the performance-based shares, according to one of the documents. It was not clear if he would have achieved the performance goals.
GameStop said Sherman plans to remain on the board without compensation to help the next CEO switch to the role.
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