GameStop Corp. (NYSE:GME) Chairman Ryan Cohen adopted a no-frills strategy in hiring Amazon.com Inc. (NASDAQ:AMZN) executive Matt Furlong as the videogame retailer’s new CEO, Reuters reported, citing people familiar with the matter.
What Happened: Cohen, who is also the co-founder of online pet supplies retailer Chewy Inc. (NYSE:CHWY), told Furlong that the GameStop CEO role would come with no frills and the majority of Furlong’s performance-based compensation will be linked to stock awards, as per the report.
Cohen also made it clear to Furlong that he would be expected to spend long hours on the job without the perks enjoyed by outgoing GameStop CEO George Sherman, such as a company plane and executive assistants.
However, Furlong would receive a handsome payment in GameStop shares if Cohen’s plans to transform the company from a struggling brick-and-mortar retailer into an e-commerce giant turned successful.
Why It Matters: Last week, GameStop reported better-than-expected earnings results for the first quarter and also announced the appointment of Furlong as its CEO and the appointment of another Amazon executive, Mike Recupero, as its chief financial officer.
Cohen has previously lured other Amazon veterans too to help accelerate GameStop’s transformation. In February, GameStop named Amazon Web Services engineer Matt Francis as the company's first-ever chief technology officer.
Nevertheless, shares of GameStop, AMC Entertainment Holdings Inc. (NYSE:AMC) and other stonks — stocks that are favored by retail investors — have surged amid the retail trading frenzy. The videogame retailer has capitalized on the stock surge since January by selling shares worth more than $550 million.
GameStop said Wednesday it plans to file a supplemental report where it may offer to sell up to 5 million shares in “at-the-market” offerings.
Price Action: GameStop shares closed almost 5.9% higher in Friday’s trading at $233.34.
Photo by JJBers on Flickr