GameStop’s CEO Goes Out on Top
Matt Levine, 26 April 2021
Is George Sherman one of the greatest public-company chief executive officers in American history? He became CEO of GameStop Corp. on April 15, 2019. The stock closed at $8.94 per share that day. On April 19, 2021 — almost exactly two years later — GameStop announced that he will be stepping down by July. The stock closed at $164.37 that day. That’s a 1,739% return over his two-year term, or about 325% annualized. (The S&P 500 index was up 43%, or about 20% a year, over those two years.) GameStop’s market capitalization went from about $900 million to about $11.5 billion; Sherman added about $10.5 billion of shareholder value in two years. 1
How much should he get paid, for doing this amazing work for shareholders? A billion dollars? Two billion? If GameStop’s shareholders had only gotten the S&P 500 return over the last few years, they’d have missed out on more than $10 billion in value; I suppose you could make a case that they should be willing to pay Sherman up to $10 billion for his magic touch.
But GameStop shareholders got a bargain:
It is a lucrative time to be leaving GameStop Corp.’s C-suite as the run-up in the videogame retailer’s share price has enabled four executives to depart with vested stock now valued at roughly $290 million.
Separation agreements between GameStop and the four executives, including Chief Executive Officer George Sherman, have provisions that let stock awarded during their tenure to vest when they leave. While such a handling of leadership transitions isn’t atypical, it does potentially allow the executives to sell their shares near GameStop’s historically high levels. …
