A GameStop investor has moved to block a shareholder vote on a proposed $35 billion compensation package for the company's chief executive, calling the payout excessive and out of line with the retailer's financial performance. The legal challenge, filed in Delaware, threatens to upend what would be one of the largest CEO pay deals in corporate history.
The $35 billion question
The pay package, which the board approved earlier this year, would grant the CEO stock awards and options worth up to $35 billion over a multi-year period if performance targets are met. The investor, who owns a small stake in GameStop, argues the plan rewards executives far beyond what the company's turnaround warrants. GameStop's market value has swung wildly in recent years, driven by meme-stock mania rather than operational improvements.
In court papers, the investor contends the board failed to properly vet the compensation structure and that shareholders should not be forced to vote on a deal that could dilute their stakes. The complaint seeks an injunction to stop the vote, scheduled for the company's annual meeting next month.
Why the investor is fighting
At the heart of the dispute is whether the CEO's pay aligns with GameStop's performance. The company, once a struggling brick-and-mortar video game retailer, saw its stock surge in 2021 during the Reddit-driven trading frenzy. Since then, GameStop has trimmed its store count and launched an e-commerce push, but profits remain elusive. The investor points to flat revenue and continued losses as evidence that a $35 billion payday is unjustified.
“This isn't about denying the CEO fair compensation,” the investor said in a statement accompanying the filing. “It's about ensuring that pay is tied to real, sustainable value creation — not stock price hype.” The statement is the first public comment from the investor, who asked not to be named due to the ongoing litigation.
GameStop's response
GameStop has not yet filed a formal response in court. In proxy materials sent to shareholders last month, the board defended the package, arguing it is necessary to retain top talent and incentivize long-term growth. The board noted that the CEO's base salary remains modest and that the vast majority of the compensation is performance-based.
“The compensation committee carefully benchmarked the plan against peer companies and structured it to reward only exceptional outcomes,” the proxy statement reads. Critics, including the investor, say the targets are too easily met given the stock's volatility.
A Delaware Chancery Court judge is expected to hear arguments on the investor's injunction request within two weeks. If the judge grants the halt, the annual meeting vote will be postponed until the court reviews the merits of the challenge. If the motion is denied, shareholders will cast ballots on the pay package as scheduled.
Either way, the case has already drawn attention from corporate governance watchdogs, who see it as a test of how far boards can go in rewarding executives at companies with unusual shareholder bases. The ruling could set a precedent for similar challenges at other firms where stock price and business fundamentals have diverged.
