GameStop intends to elect Ryan Cohen as chairman

Yahoo Finance’s Julie Hyman, Myles Udland, and Brian Sozzi discuss the shift in leadership for GameStop.

Video transcript

JULIE HYMAN: News on GameStop. The company has a new chairman. That as Ryan Cohen.

Now, Ryan Cohen is a familiar name when it comes to GameStop. Because he's the Chewy co-founder, who invested in GameStop last year and has been pushing for changes. So he's been doing activism here. And it's interesting that he wasn't yet sort of officially affiliated with GameStop.

Now, he is. He's the chairman. And so presumably, he's going to be pushing for even further changes, or maybe just cementing some of the idea that there's going to be a change in strategy at GameStop.

Myles, as I was just commenting, I kind of thought he was the chairman already. He's kind of been acting like the chairman when it comes to pushing for some changes at the company.

MYLES UDLAND: Yeah, he's certainly the spiritual leader, I guess you could say, on Chewy's Board of Directors. And so the chairman title sort of codifies that. A couple of interesting announcements in here as well. And I think the one that really stands out to me is that all of the directors will be compensated in 100% equity. Or at least, they are nominating that shareholders approve-- or proposing that shareholders approve this proposal at the annual meeting for GameStop, which is set to take place on June 9.

But I think-- I mean, Cohen sees a lot of things within the business. But given the trajectory that the stock has taken over the last year, Brian Sozzi, given the trajectory that GameStop has had as a part of the discourse, I guess you could say, the public facing aspect of the business, now that the whole Wall Street bets thing sort of came and went, interesting to see the Board say, you know, we're going to show our full faith in the share price at this kind of a level. And I mean, I joked in the open about diamond hands. But I mean, this is sort of the corporate version of that.

They are saying that they're serious about this company's prospects. And I think honestly, it's probably warranted. Or it's certainly worth them making that kind of symbolic gesture-- not symbolic, also a material gesture as well to show that they're serious about this.

BRIAN SOZZI: Yeah, Myles, two points. First, time at this GameStop bored out of here. This is long overdue. All these people, for the most part, outside of Cohon and the new people that he's brought in here from his time Chewy, they were the ones that drove, in large part, oversaw the stock falling right into the tank over the past year and a half.

So get rid of all these folks. It's long, long overdue. And this is very welcome. And I think that's why you're seeing the stock price react to the way it is.

Second point-- and you brought this up, Myles-- very important-- all directors compensated 100% in equity. And I think that should be a benchmark for a lot of other companies out there. Because let's just call it what it is.

A lot of times, a board is constructed with retired CEOs that are already sitting on tons of money. They get a $250,000 or more check from a company. It goes right into their digital bank account.

And they could care less. They do what they have to do, show up at their one or two annual meetings a year, check some boxes, and see you later. Goodbye. They don't care about it. They just get paid in check and continuing their cushy lifestyle.

This is good for GameStop. And it should be used as a model for many companies. It ties the performance of the company more in line with what they should be doing in the stock price and the performance.

So this is good. Hat tip to GameStop. You got it right.

JULIE HYMAN: Yeah, it'll be interesting to see if/when they get the shares awarded at what level those stock is, and then how much further upside it has. We should that year to date chart with the stock up a little less than 850%.