GameStop’s departing CEO to get over $173 million — after two years on the job
Has saying goodbye ever been so lucrative?
George Sherman, hired as CEO of GameStop Corp. two years ago, is leaving the Grapevine-based video game retailer with an exit package valued at $127 million, according to a regulatory filing.
Sherman also will get a big pay bump in June, about a month before his scheduled departure, when another 308,477 company shares will vest and become his. At GameStop’s closing price of just over $151 a share on Friday, those holdings would be worth roughly $46.6 million.
In total, Sherman will be walking away from GameStop with a package worth over $173 million, although the actual value will depend on the stock price, which has been highly volatile — and is the reason for the big payouts.
To put Sherman’s severance into context, consider that his annualized compensation last year was just under $7.2 million, according to Thursday’s filing.
“Gosh, that severance is an awful lot,” said Brent Longnecker, founder of the consulting firm Longnecker & Associates and an expert on executive pay. “And it seems awfully unusual that so many in the C-suite are getting a package at the same time.”
GameStop has been turning over its management and board of directors after activist investor Ryan Cohen began acquiring a big stake last year and joined the board in January, along with two associates. Cohen co-founded Chewy, an e-commerce pet site that was sold for over $3 billion.
Since March, chief financial officer James Bell and chief customer officer Frank Hamlin have left GameStop. They’re getting severance packages of $58.1 million and $41.7 million, respectively, the filing said.
Chief merchandising officer Chris Homeister is expected to depart by the end of July, which is when Sherman will be gone. Homeister’s severance is $48 million, the filing said.
That means four departing executives are walking away with almost $275 million, largely in company shares. Add in Sherman’s shares that vest in June, and it’s costing over $321 million to clear out GameStop’s C-suite. (Chief transformation officer Daniel Kaufman left last June, prior to Cohen’s involvement, with a $3.1 million payout.)
“The severance payments are an egregious example of pay for failure if there ever was one,” said Brandon Rees, deputy director of corporations and capital markets for the AFL-CIO and a key contributor to the union’s Executive Paywatch report.