Matt Furlong made a point of building onto corporate excess such as a videogame retailer and used the lure of paying Amazon.com Inc. chairman Ryan Cohen as the chief executive, according to people familiar with the process.
Cohen wanted the message to be stern, said the sources, who were close to the discussions. The transformation of the ailing brick-and-mortar brand into an e-commerce powerhouse would require laser focus and determination, Cohen told Furlong.
The role would come with no frills, but it would work handsomely in GameStop shares if the turnaround was successful. The majority of Furlongs performance-based compensation will be tied to stock awards.
The move represents Cohen's boldest gambit yet, in his efforts to attract talent from Amazon. The stock value of GameStop soared to $150 million a year ago, when famous traders challenged hedge funds betting on the company and turned it into a popular meme stock on Reddit and other social media.
Most analysts say the valuation of the company is out of whack with the fundamentals of its business, providing a volatile bet for any GameStop recruit who accepts the bold stock as part of their compensation.
On Wednesday, GameStop announced the hiring of Furlong alongside that of Amazon's North American Consumer Business Financial Chief Mike Recupero as Chief Financial Officer. They were the latest Amazon veterans poached by Cohen, billionaire co-founder of the online pet supplies retailer Chewy Inc., who joined GameStop in January.
In March, Matt Francis tapped Amazon Operations Executive Jenna Owens as chief operating officer, one month after naming The Top Amazon Web ServicesAmazon Web Services Engineering team as Chief Technology Officer. Elliott Wilke, another Amazon executive in the grocery giants business, was hired in April as Chief Growth Officer.
Amazon did not respond to a request for comment.
The sources said Cohen spent two months speaking to more than 50 potential CEO candidates from a range of industries, including Gaming and e-commerce. Cohen and Furlong discussed a possible role at the gameStop role more than six years ago, and one of Cohen's sources pointed to Furlong as a strong CEO candidate for Chewy, one of the sources said.
Cohen, which was based in Australia, called Furlong in Miami and held a series of virtual meetings that later included the Board members of GameStop. The job description called for fixing the company’s distribution network, deconstructing its website and going beyond Cohen’s vision of high-touch customer service, according to sources.
Furlong would be expected to work for long hours on the job without the perks enjoyed by the outgoing GameStop CEO, Cohen told him, such as a company plane and executive assistants. While Sherman will remain on the Board of GameStop, he leaves the CEO role because the board decided that he lacks the necessary e-commerce expertise, according to the sources.
In his conversations with Furlong, Cohen said previous GameStop executives let order processing operations and customer service languish, the sources said. If Furlong was to fix these problems, he would be generously rewarded with GameStock shares.
The details of Furlong's compensation package have not yet been disclosed by GameStop.
Furlong, 42, was eager for the challenge and happy to relocate to GameStop's headquarters in Grapevine, Texas, sources said.
Some gametop board members even played up the challenges Furlong would face in transforming the company into an Amazon of videogames to ensure he was committed.
We wanted to know why you would leave the safety and comfort of your current position, essentially kiss your family's good-bye and get in there to build something from the ground up, said one of the sources familiar with the board thinking.
Cohen also admitted during the interview process that the transformation would take time, sources said.
Cohen and Furlong declined to comment on GameStop representatives.
We have a lot of work in mind. You won't find us talking a big game, making a bunch of lofty promises or telegraphing our strategy to the competition, that is the philosophy we adopted at Chewy, Cohen told GameStop shareholders at their annual meeting on Tuesday.
It's not clear how hands-off Furlong, 35, will be at GameStop once Cohen takes over his duties on June 21. Cohen has been obsessing about customer service, calling GameStop customers late into the night to solicit feedback, and has made a push to upgrade the company website and online ordering system, Reuters reported in March.
On Wednesday it remained loss-making, though it trimmed its first-quarter operating loss to $40.8 million from $108 million a year ago.
Furlong has plenty of financial firepower to deploy in his new mission. GameStop has already sold more than $350 million in stock since the Reddit rally began in January, some of which it used to pay off of debt, and launched a 700,000 square-foot warehousing facility in York, Pennsylvania. The company said on Wednesday it would try to sell up to 5 million more shares, currently worth $1.1 billion.