GME To Raise Pay and Offer Stocks to Senior Employees
On Wednesday, August 24th, Wall Street Journal reported that GameStop is investing nearly $50 million in its new employee compensation initiative. Allegedly, this is the video game retailer’s attempt to reinforce its core brick-and-mortar business.
GME’s Employee Compensation Initiative Explained
While GameStop appeared to be going digital last year, the new management, spurred on by Ryan Cohen, seems to be working on taking the company back to its roots. A memo from Wednesday detailed a compensation plan for employees that seeks to reward some of the senior store staff.
Mr. Furlong, the Chief Executive that issued the memo, stated that while they will “continue evolving their e-commerce and digital asset offerings, their store fleet will remain critical to GameStop’s value proposition.” The plan entails rewarding both pay raises, and the company’s stocks.
While it wasn’t specified how long an employee would have to stay with the company, store leaders are set to receive $21,000 worth of stocks over three annual installments. The entire initiative will cost between $45 and $50 million and appears to be one of the outcomes of the year-long restructuring ultimately aimed at making the company profitable.
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What Has GameStop Been Up To so Far?
After many years of reported losses, GameStop came back to the public eye amid the great meme stock craze of late 2020 and early 2021 where it took central stage. GME took the opportunity it was given and made numerous attempts to reinvigorate its aging business model.
Apart from investing in its digital marketplace, GME is attempting to enter into the NFT business. The company launched its own non-fungible token marketplace in July 2022, albeit to a somewhat lukewarm initial reception.
Many of the changes GameStop has been going through can be traced to the activist investor Ryan Cohen raising to the position of its chairman in 2021. Among other changes, Cohen brought Matt Furlong to the company. The compensation plan announced by Furlong is set to start rolling out in September.
Do you think this initiative will help reinvigorate GME beyond its meme stock status? Let us know in the comments below.