Departing GameStop Executives Eyeing Lottery-Winning Paydays
ERIK GRUENWEDEL, 26 April 2021
July 31 can’t come soon enough for several GameStop executives, including CEO George Sherman, who are slated to exit the videogame retailer at that time in a management reorganization driven by incoming chairman of the board Ryan Cohen, co-founder/CEO of online pet supply service Chewy.com.
Sherman, CFO James Bell, chief customer officer Frank Hamlin and Chris Homeister, chief merchandising officer, all have provisions in their contracts that call for expedited vesting of stock options, the latter Wall Street-based restricted shares that can drive executive compensation into the stratosphere — with no tax liability for the company.
For example, Netflix co-founder/co-CEO Reed Hastings exercised more 1.33 million stock options in 2020 worth more than $612 million — taxes on which Hastings, not Netflix, is responsible for.
For Sherman & Co., the payday won’t be as large, but still significant considering they are being forced out at a time when GameStop shares are trading at atypical highs due in part to a third-party turf war between individual investors and established hedge funds.
Sherman, who through the middle of the month was the largest individual shareholder, inexplicably agreed to give up $47 million in stock options and $5 million in cash as part of a severance agreement that will enable him to exercise 1.1 million in stock options worth $169 million at the market close on April 23.
