GME 2018 Proxy Statement

Response to Advisory Vote on Executive Compensation A substantial majority of our stockholders (92% of votes cast) approved the fiscal 2016 compensation for our NEOs at the 2017 annual meeting of stockholders. We interpreted these results, coupled with discussions that we have had from time to time with investors regarding compensation, as a validation of our executive compensation program. As a result, we have retained our general approach to executive compensation as described more fully in the "Key Elements of Compensation" section below. Nonetheless, the Compensation Committee continues to work with its independent consultant to consider alternatives and intends to revise the program as it determines appropriate. 26 | 2018 Proxy Statement Compensation Determination Process The Compensation Committee of the Board has the responsibility to develop compensation levels for the NEOs. In determining annual compensation levels for NEOs, the Compensation Committee, along with executive management, bases its decision on the individual’s performance and potential to improve stockholder value, the financial performance of theCompany over the preceding fiscal year, projections for the Company's upcoming fiscal year, historical compensation for each NEO, the amount of shares available to be granted under our 2011 Incentive Plan and the results of reviews, surveys or other information from our compensation consultants. The Compensation Committee considers the recommendations of the Executive Chairman and the Chief Executive Officer in determining compensation for the executive officers and employees other than the Executive Chairman and the Chief Executive Officer. The Compensation Committee has the authority under its charter to retain an independent compensation consultant to assist in the evaluation of executive compensation, whose research and viewpoints provide one of several data points used by the Compensation Committee in developing specific recommendations to the Board. The Compensation Committee believes that such a consultant can play an essential role in the process of providing an impartial evaluation of compensation programs and practices, developing effective recommendations to the Board and evaluating the Company’s pay practices. The Compensation Committee retains ClearBridge Compensation Group (“ClearBridge”) to advise on matters related to non-employee director and executive compensation. ClearBridge reports directly to the Compensation Committee and does not provide any other services to the Company. The Compensation Committee reviewed the independence of ClearBridge under SEC rules and NYSE listing standards regarding compensation consultants and has concluded that ClearBridge’s work for the Compensation Committee is independent and does not raise any conflicts of interest. ClearBridge gathers benchmark data from our peer group, which the Compensation Committee considers among other factors ( e.g. , individual performance and potential, job responsibilities, historical compensation levels, etc.) in assessing and determining total compensation opportunities for the NEOs. Our selected peer group is generally comprised of specialty retailers, selected based on companies with revenue in the range of 0.5x and 2x the Company's revenue, with an additional reference to enterprise value. The specific companies included in our fiscal 2017 peer group are listed below (this group was unchanged from fiscal 2016): Abercrombie & Fitch Bed Bath & Beyond Kohl's O'Reilly Automotive Advance Auto Parts Dick's Sporting Goods L Brands Ross Stores AutoZone Foot Locker Nordstrom Tiffany & Co. Barnes & Noble Gap Office Depot Williams-Sonoma In fiscal 2017 and years prior, in order to comply with Section 162(m), the Compensation Committee has generally established in writing a performance target (“Target”) for the annual short-term cash incentives and long-term performance-based restricted stock incentives no later than 90 days after the start of each fiscal year (and before 25% of the relevant performance period had elapsed). Targets have typically been based on budgeted financials. Because the Target has generally been established in the first 90 days of the fiscal year, the attainment of the Target is substantially uncertain at the time the Target was established. Key Elements of Compensation The Company maintains employment agreements with each of the NEOs to cover the key elements of the Company’s executive compensation package, which consists of base salary and short-termand long-term incentive awards, and covers severance and termination benefits. These employment agreements and the Company’s policies with respect to each of the key elements of its executive compensation package are discussed below. In addition, while the elements of compensation described below are considered separately, the Compensation Committee also considers and reviews the full compensation package afforded by the Company to its executive officers, including insurance and other benefits. See below for details on the Company's 2017 compensation program.