Odaily, citing Bloomberg, reported that a GameStop retail investor has filed a class-action lawsuit in the Delaware Court of Chancery, seeking to block a shareholder vote on a compensation package for Chief Executive Officer Ryan Cohen valued at $3.5 billion. The complaint asks the court to halt the vote until shareholders receive what the plaintiff describes as proper information disclosures.
According to the lawsuit, GameStop’s board repeatedly changed procedures tied to the shareholder vote before issuing a proxy statement that the complaint characterizes as misleading. The disputed procedures include whether Ryan Cohen can vote the 9.3% stake he holds in the company and how abstentions should be counted. The lawsuit alleges that these changes were designed to reduce participation by public investors in the vote.
GameStop shareholders were originally scheduled to vote on the compensation plan on July 7. Under the proposal described in the report, Ryan Cohen would receive $3.5 billion in stock option awards if the company reaches a $10 billion price-to-earnings ratio and $10 billion in cumulative earnings before interest, taxes, depreciation and amortization. The lawsuit centers on delaying that vote until the company provides the shareholder disclosures sought by the plaintiff.