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PROPOSAL 2: |
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APPROVAL OF THE GAMESTOP CORP. 2022 INCENTIVE PLAN |
Overview
On March 31, 2022, the Compensation Committee and the Board approved, subject to the approval of the Companys stockholders at the annual
meeting, the GameStop Corp. 2022 Incentive Plan (the 2022 Plan). The 2022 Plan, if approved by stockholders, will replace the current GameStop Corp. 2019 Incentive Plan (the 2019 Plan).
Our principal reason for implementing the 2022 Plan is to support future compensatory equity issuances. If the 2022 Plan is approved by stockholders,
8,000,000 shares of common stock, plus any shares subject to 2019 Plan awards that expire, are forfeited, cancelled, terminated or settled in cash after the 2022 Plan is effective, will be available for issuance under the 2022 Plan.
If the 2022 Plan is approved by stockholders, no additional awards will be made pursuant to the 2019 Plan. If this proposal is not approved by our
stockholders, the 2022 Plan will not become effective and the 2019 Plan will remain in effect in accordance with its present terms, which has an expiration date of June 25, 2029.
Why GameStop Corp. Believes You Should Vote to Approve Proposal 2
The 2022 Plan authorizes the Compensation Committee to provide equity-based compensation in the form of stock options, stock appreciation rights,
restricted stock, restricted stock units, performance awards, and other share-based awards, for the purposes of providing officers, employees, consultants, advisors, and directors of our Company and affiliates with incentives and rewards for
performance.
We believe our future success depends in part on our ability to attract, motivate, and retain high-quality officers, employees,
consultants, advisors, and directors, and that the ability to provide equity-based awards under the 2022 Plan is critical to achieving this success. If the 2022 Plan is not approved, it may jeopardize the Compensation Committees ability to
achieve these objectives. We believe that we would be at a significant competitive disadvantage if we could not use equity-based awards to recruit and compensate high-performing individuals, based on the fact that equity-based awards are a critical
component of our new compensation structure, and are a key design feature of the compensation programs of our competitors.
The use of equity as part
of our compensation program is also important to our continued success as it aligns the interests of our officers, employees, directors and other grantees with the interests of our stockholders and promotes a focus on long-term value creation. In
addition, the 2022 Plan will allow us to continue to provide a means whereby those individuals who have responsibility for the successful administration and management of the Company can acquire and maintain ownership of shares of common stock,
thereby strengthening their interests in the welfare of the Company.
In addition, as described in our Compensation Discussion and Analysis, the
Compensation Committee adopted a new compensation structure whereby a significant portion of the compensation of our NEOs and senior-level employees are to be delivered through the use of equity (with significantly reduced cash compensation levels
vs. our legacy approach to executive and employee compensation). This approach creates direct alignment between the interests of our stockholders with the interests of our executives. The 2022 Plan helps to ensure that the Compensation Committee has
adequate shares available to meet our compensation objectives under this new structure in all stock price environments. Furthermore, the 2022 Plan will ensure we can continue to attract the executive talent necessary to execute upon our digital
strategy and transformation of our business.
Determination of Shares to be Available for Issuance Under the 2022 Plan
As of April 8, 2022, the number of shares remaining available for new grants under the 2019 Plan was 4,128,642. The Compensation Committee approved
the share authorization requested under the 2022 Plan based, in part, on a belief that the number of shares currently available to grant under the 2019 Plan does not give us sufficient flexibility to adequately provide for future incentives.
In setting the number of proposed shares available for issuance under the 2022 Plan, the Compensation Committee considered a number of factors, including
the Companys new compensation structure, historical grant practices, the dilutive effect of additional compensatory equity issuances, the Companys current and expected future personnel complement, and the recent and potential future
volatility in the Companys stock price.
Based on internal analyses of historical and future potential equity needs, we expect the share
reserve proposed under the 2022 Plan would provide the Compensation Committee with the ability to deliver equity-based awards for approximately three to four years. The actual duration of this share reserve could vary from this estimate based on a
number of factors, including, but not limited to, future stock prices, future changes to our grantee population, and future changes to our equity incentive design.
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2022 Proxy Statement | 22 |