GameStop CEO To Step Down In July With A Compensation Package Worth $179 Million

George Sherman, GameStop CEO is set to step down from his position soon with a compensation package of $179 million. This is much more than most CEOs earn at even larger companies, and is due to the GameStop stock rally which happened early in the year.

The company released an official report on Monday stating that Sherman would step down on the 31st of July. The company has been on the search for a new head to champion its transition and in the e-commerce world alongside Ryan Cohen, chairman, and billionaire businessman.

Last year, in the early months of the Covid-19 pandemic, GameStop took away part of George Sherman's pay due to his performance and replaced it with shares of the company - that was way before the shares went up. The company gave him about 925,000 shares in June 2020, which he is to receive at once at the time of his exit under terms of a "transition agreement" negotiated this month, as well as roughly 200,000 more shares that had not previously vested.

Sherman, who has been CEO for about two years, since April 2019, had to give up $98 million worth of stock(308,477 shares)

this month which was tied to his performance target. This however isn't a hindrance to his payout, as he still stands to receive stock worth about $179 million, as the shares granted to him were linked to his tenure, and not his performance, which is usual with most companies.

The value of this severance payout is worth more than the annual salaries received by many top CEOs in the United States. For example, Joseph Ianniello of ViacomCBS received $112.9 million in 2019, while Jamie Dimon of JPMorgan Chase received $107.8 million.

Quite a few people aren't enthused with this development, including The Street founder, Jim Cramer, who took to his Twitter account to express his displeasure laced with sarcasm.

Shares of GameStop (GME) are currently trading at $158.53, which is a gargantuan leap from the $5 it was at, the same time last year when the company awarded CEO Sherman with the shares. In January, a trading community on Reddit and Twitter snagged all the shares and suffocated Wall Street short-sellers, which sent the price of the shares soaring.

George Sherman has about 25 years of experience in senior management experience and has worked for major retail brands like Target, Best Buy, Home Depot, and Advance Auto Parts, where he was president and Interim CEO. In his two years as GameStop CEO, he has been credited with driving the company through the pandemic, a noteworthy feat, as many other retailers went out of business due to the hardship.