GameStop: Structuring Incentives

How did you structure incentives for these CEOs to drive accountability for their region?

I changed the bonus plan to make it much more about their bonus but also with a tag of the overall performance of the region. If you were the Spain CEO, you were bonused on your performances, like 80 percent, but now there’s a 20 percent bonus on the way Europe was going. There was an opportunity and an advantage for them to work with the rest of the countries to try to help things better because they would get an advantage out of it, as well.

Did that change their behavior?

It did. It took time. I took over international at the end of 2009 and it was probably 2015/2016 we’re seeing things come together. They started to work together. It was really great to see.

Working together, I suppose they were obviously trying to help each other’s businesses, but also then working together to negotiate deals with vendors or the big gaming companies, how exactly were they helping each other?

I think it’s probably a few things. I think it was sharing best practices on issues regarding inventory management returns and so on. At the same time, yes, the vendor side became much more unified. Yes, you had the countries working together to discuss discounts and purchasing and so on. Even sharing inventory, where if Spain had too many PS4s, they’d ship it to Italy. That’s something that wouldn’t happen before.