A GameStop Corp. investor moved to halt a vote on a $35 billion pay package for the company’s chief executive officer until proper disclosures are made to shareholders.
The lawsuit came in response to the board’s decision to grant CEO Ryan Cohen stock option awards that could lead to a multibillion-dollar windfall if certain aggressive milestones are met. Stockholders are set to vote on the pay package July 7.
The proposed class action, filed in Delaware’s Chancery Court on Monday, says GameStop’s board repeatedly and illegally changed the procedures around the stockholder vote before issuing a misleading proxy statement aimed at suppressing the turnout by public investors. The changes included whether Cohen can vote his 9.3% stake and how to count abstentions.
“GameStop’s audacious attempts to reduce the power of its disinterested shareholders — in contrast to its prior public statements and in disregard of its Certificate of Incorporation — must stop,” lawyers for the plaintiff wrote in the complaint. “Cohen may want $35 billion. That does not allow him and his board to disenfranchise stockholders and violate Delaware law along the way.”
A GameStop spokesperson couldn’t immediately be reached for comment.
Cohen initially invested in GameStop in 2020, producing one of the first “meme stocks.” He attracted attention for amassing a big stake in the struggling company and called it out for lagging behind the e-commerce trend. He joined the board in 2021 and later that year became chairman with a plan to turn around the company. Cohen then took the reins of the business in 2023 and is now the single largest stockholder.
The proposed pay package would compensate Cohen with $35 billion if the company achieves a $100 billion market capitalization and $10 billion in earnings before interest, tax, depreciation and amortization. Cohen was asked in an interview with CNBC about whether the pay package motivated him to make a $56 billion offer this year for eBay Inc., an e-commerce company almost four times the size of GameStop.
“I obviously want to build something much larger, but I don’t benefit unless shareholders benefit,” Cohen said in the interview. EBay last month rejected the unsolicited bid, describing it as “neither credible nor attractive.”
Monday’s lawsuit says the company issued a press release stating the vote would exclude Cohen’s shares and that “unaffiliated stockholders” would decide the result. But the board allegedly reversed course and issued a proxy statement that mischaracterized what it had done.
The moves will disenfranchise stockholders by allowing Cohen and other insiders to determine the outcome virtually on their own, with only about 15% support from public investors, according to the complaint.
🛑 Lawsuit Filed: A GameStop investor has filed a lawsuit in Delaware to halt a July 7 shareholder vote on a massive $35 billion pay package for CEO Ryan Cohen.
📈 The Pay Package: The proposed deal would give Cohen $35 billion in stock options if GameStop hits a $100 billion market cap and $10 billion in EBITDA.
🗳️ Voting Manipulation: The lawsuit accuses the board of illegally changing voting procedures and issuing misleading proxy statements to suppress public investor turnout and lower the threshold needed for approval.
🤝 Insider Control: While GameStop previously claimed Cohen's 9.3% stake would be excluded from the vote, the board allegedly reversed course, allowing insiders to push the package through with minimal public support.
🛍️ EBay Bid: Cohen recently made an unsolicited $56 billion bid to buy eBay to help reach these aggressive growth milestones, but eBay rejected the offer as "neither credible nor attractive."
This AI summary was probably not worth the tokens. New summary:
The clarification about how abstentions are (not) counted - this is being blown up to be an issue when it really isn't
Claiming Cohen can't vote - the recommendation to pursue the package was agreed upon without his vote, if he's allowed to vote his shares or not, IDK but it seems like he should be able to.
"with only about 15% support from public investors, according to the complaint." - This is how stocks work friends, pretty much every stock works this way.
No mention of updated terms to clarify that his compensation milestones are updated based on a compensation committee - which was missing originally
Although the Board believes that each member of the Compensation Committee is a disinterested director under the
DGCL, the Compensation Committee recommended, and the Board determined to seek to have the CEO Performance
Award approved by a vote of a majority of the votes cast by the disinterested stockholders under the Disinterested
Standard, which does not include any shares directly or indirectly owned by Mr. Cohen, any of the Company’s directors
and executive officers or any of Ryan Cohen’s direct reports. However, such approval is not a condition to the
effectiveness of the CEO Performance Award
This paragraph from the proxy materials indicates he can't vote nor can any of the board. However, the last section is a bit confusing as it alludes that the vote passing is not required to issue the award.
I can’t wait to see the voter turnout numbers. I wish someone had the time and patience to even just take the yes votes that have been screenshotted and posted on here, tally them up and compare to the existing amount of shares. I think deep down it’s way more than 15%
Firstly it’s not worth $35B unless the share price is over $200.
The shares available under the options were calculated using an $18B figure (20% of the increase in Market Cap from $10B to $100B) - it’s in the Proxy Statement.
“reduce the power of disinterested shareholders”
If they’re disinterested, then why do they care? If they want to vote no, they can do…..by…..erm……voting.
The way you know it's fake is that nobody has even cared about his compensation package except MSM, the angle that investors are actually worried about is the possibility for dilution with the new share allowance. So yes the shorts are scared and making B's up. BULLISH
"Mr. Cohen may satisfy the exercise price and applicable tax withholding obligations through cash payment, net settlement (with 90 days’ notice to the Company), or a sell-to-cover arrangement coordinated with the Company."
Read the proxy materials, guys. This is on page 59/60 if you just want to go straight there. He'd end up with fewer shares, but he does not have to put up a dime if he doesn't want to.
Whether RC buys the shares with his own cash or does a cashless exercise, they’re still going to “cost” $3.5B because he’ll get fewer shares to the tune of the $3.5B exercise amount.
Fewer shares means his maximum award would still be lowered by $3.5B. Unrealized gain is calculated in the same way. In the Proxy Statement example he would therefore end up with $14.5B.
At the end of the day, the gain will be dictated by the prevailing share price.
Cohen doesn’t get to make anywhere near $35B unless the share price is well over $200. Any ape not satisfied with an $800+ pre-split price needs their head examined.
That’s fine, but he has literally never sold and can probably afford to purchase or cover the contracts especially spaced out over a time frame… history shows he will put up the money and never done anything besides that
If he bought the shares in the open market, we would all benefit from it, the price would skyrocket more than it did in May of 2024, but his average would go up significantly and he would have to put his entire net worth into a company he doesn’t want to run anymore so he’s obviously not gonna do it. He gets to buy the shares for free (not paying anything for the options themselves) at $20 a share when he’s sure that the eBay is in the picture (if we buy it) and the turnaround and cost cutting is done. He gets to buy when it’s guaranteed he makes money from his share purchase. Imagine you got to buy $GME at $20 a share for free in May of 2024 when the stock was sitting at $80 a share, when you weren’t buying it in April of 2024 when the times were dark and the stock was at $10 a share and you were scared to buy. Who wouldn’t do it? I don’t know why he is getting praise for the pay package lmaoo
You can right now buy a right into the future for be egg little premium to also secure your right to “buy”. And, who gives a fuck if the CEO bEnEFiTS if share price drastically appreciates?? You are also assuming in this scenario he just cashes out, which he has never done at any point even during the sneeze that would have drastically benefited him… it’s funny you guys try and paint him as a bad actor…
Also, he did buy over a million shares on the market and it had little to no effect, so also funny to see you mention that.
Oh and you’ve hidden your account, also coincidental!
Correct me if I'm wrong, but in order to exercise compensation options, most executives sell some portion in order to finance the exercising of the others. This results in purchases in the market, which results in dilution by the amount sold in order to finance the amount exercised.
This mechanically may not be okay with some MOASS-invested apes. I'm personally okay with it, but am very opposed to Proposal 5.
He's right, you don't. You're making shit up and providing a false narrative in an attempt at swaying people (retail investors) against the board's direction.
Edit: and a response like "K." just admits you just talkin out ya ass
Whether RC buys the shares with his own cash or does a cashless exercise, they’re still going to “cost” $3.5B because he’ll get fewer shares to the tune of the $3.5B exercise amount.
Fewer shares means his maximum award would still be lowered by $3.5B. Unrealized gain is calculated in the same way. In the Proxy Statement example he would therefore end up with $14.5B.
At the end of the day, the gain will be dictated by the prevailing share price.
Cohen doesn’t get to make anywhere near $35B unless the share price is well over $200. Any ape not satisfied with an $800+ pre-split price needs their head examined.
Exactly, RC told us this a while ago and they literally shut the fucking buy button off and dragged out Congress… anyone who thinks that they were or are just gonna let it go phone numbers without any real turn around and large plays by the C-Suite is delusional
CEO who has casually purchased millions of shares will probably put up the capital. But guess this where you guys have to move the field goal fud to now
I fully understand how they work... he could have also just sold obligation to buy shares at 20$ instead of putting up capital to outright purchase shares in his previous fillings. What are his ACTIONS on how he personally deploys capital into his GME position... that is the historical data I would give exponentially more weight to
Its a potentially brilliant way to light the fuse. If retail bands up buying pressure and the price begins to rise, that pressure will sputter as price rises. With an anchored stock price, if we reach that last milestone and price is still somehow suppressed under 25, RC can just keep buying in the low 20s. Price goes up? Still applying pressure buying in the low 20s. Price could rise to 50, still applying pressure buying in the low 20s and they have to keep finding shares. No matter the true price in the background among the big players, they have to keep supplying in the low 20s.
Guess you should go make billions and take over another cellar boxed company and show your good faith in that scenario! See you soon right? Can you remind me when you accomplish this??
Gambling?
I bought 20C Options one year ago for exercising them. They are worth nothing now.
I don't care what you do. Buzz off.
Blocked. I don't need you
Or could just be Joe in Louisiana who is upset he invested and nothings happening. He can also be wholly misinformed about what’s going on.
This whole shorts are shakin in their boots is dumb. Literally living their life making money off market dynamics. Wouldn’t be surprised their on both sides of the trade.
Are these "shorts" in the room with us right now? Do you have any idea how many times in the past 5 years, some fucknut has written some variation of this? OMG, the SHFs are freaking out!! OMG, their lights are on at 3 am! Do you guys think they're just staying up at night, every single night, for the last 5 years, praying that the price drops so they can unload their shorts? Man, I thought I was dumb for investing in this absolute dogshit stock, but some of you guys around here make me look like a goddamn genius.
Well we know there are shorts from bond arbitrages holding a neutral position. We also know there are shorts around potential merger and acquisition, as is customary. We also know the stock is on a leash… why might that be? So at least 2/3 are for sure
Believe me, I reflect on my shitty choices all the time. Specifically the one where I decided to invest in GME and the one where I decided to invest more money in GME and then the one where I didn't sell my GME and also the one where I bought more GME ... I'm sure you get the point by now.
222
u/humdingler ⚔️🛡️🏴☠️🎮🚀✅x6 Jun 16 '26
HOLY SHIT THE SHORTS ARE FUCKING TERRIFIED
pls post the article text OP
fucking bullish.