GameStop CEO Drops $35B Bonus Plan to Back $55.5B eBay Bid
EBAY•GameStop CEO Ryan Cohen scrapped a $35 billion performance bonus plan as it prepares detailed material for its proposed $125-a-share, $55.5 billion acquisition of eBay. eBay’s board has deemed the financing plan unviable and raised governance and pay-incentive concerns.
1. Bonus Plan Withdrawal
GameStop’s board approved in January a performance bonus that could have paid Ryan Cohen up to $35 billion upon reaching $100 billion market cap and $10 billion EBITDA. Cohen withdrew the award to ensure leadership focus on operating performance and the proposed eBay acquisition.
2. Proposed eBay Acquisition
In May, GameStop offered $125 per eBay share, valuing eBay’s equity at approximately $55.5 billion, to be funded by $9.4 billion in cash on hand and up to $20 billion in debt. The company plans to publish a detailed presentation and integration plan later this week outlining synergies and combined operations.
3. Board's Rejection and Concerns
eBay’s board rejected the non-binding proposal, labeling it neither credible nor attractive due to doubts over the financing structure and concerns about governance and executive pay incentives. The board’s position leaves GameStop with the challenge of addressing these objections before pursuing any revised bid.
