There's no stopping GameStop (nyse: GME - news - people )--not yet, at least. The videogame retailer has 5,260 stores in 17 countries and is growing like no other retailer. It opened 586 stores last year and plans to open roughly the same number this year--at a time when retailers like Sears and J.C. Penney (nyse: JCP - news - people ) are laying off workers.  Credit Richard Fontaine, GameStop's straight-talking chief executive. Fontaine, 66, has led GameStop and its predecessors since 1996, turning it from a bankrupt, botched merger of two retailers into a global player with revenues of $7.1 billion and net income of $288 million. Same-store sales for GameStop, near Dallas in Grapevine, Tex., soared 25% last year. Since the company went public in 2002, the stock has almost sextupled to $55. For all his achievements, he's earned (on average, over six years) $3.6 million a year--on the low side for chief executive pay these days.  His combination of stellar performance and reasonable pay makes Fontaine one of America's best bosses in our annual performance-versus-pay scorecard. "My management philosophy, if I had to sum it up, is exactly like the hottest product group we've had for the last year--it's Wii. This is not an 'I' company," he says.  For a guy who wants kids to spend time in front of the television, Fontaine started out in an unusual field--teaching English. A native of Aberdeen, S.D., Fontaine got a degree in education from the University of North Dakota and then taught at Minneapolis Central High School for three years. With three kids to support, he took on a second job at bookseller B. Dalton in 1967. Then he joined full-time and worked his way up the management ranks to president.  In 1988 Barnes & Noble (nyse: BKS - news - people ) Chairman Leonard Riggio recruited Fontaine to take over its struggling Software Etc. unit. Fontaine shifted its business out of software like spreadsheets and into entertainment software. The turnaround proved to be a success.  In 1991 Riggio made Fontaine executive vice president of Barnes & Noble, but Fontaine kept an eye on Software Etc. as a board member. The company imploded after a merger and filed for bankruptcy in 1996. But Fontaine persuaded Riggio and other investors to buy its assets for $58.5 million in late 1996. Fontaine took over as chief executive and, with operations chief Daniel DeMatteo, began building what later became known as GameStop.  To get customers to make frequent return visits, Fontaine came up with a winning formula: The stores began to take back any used videogame product and gave store credit for future purchases. The formula is still an important differentiator today. The gross margin on used games and accessories is two-and-a-half times as high as the average 20% margin on new games, says Credit Suisse analyst Gary Balter. GameStop has close to 80% U.S. market share of used videogames and about 25% share of new games. Web sites like Ebay and Amazon account for much of the rest of the used game market, while Wal-Mart (nyse: WMT - news - people ), Target (nyse: TGT - news - people ), Best Buy (nyse: BBY - news - people ) and Circuit City (nyse: CC - news - people ) are big competitors for new games. The current, extremely popular selection of videogame hardware and software--including Wii, Xbox 360, Guitar Hero and Grand Theft Auto--has spurred sales.  In 2002 Barnes & Noble took its videogame retail unit public under the new GameStop name. By the end of 2004 Barnes & Noble had sold all its GameStop shares. Fontaine doesn't think the company will suffer during economic slowdowns like the current one because people tend to stay home and play games.  He isn't much of a gamer, spending time instead training for marathons--he's run eight in the past 13 years. Plus, says Fontaine, "These videogames today are so engaging. You look up and four hours have passed. If I did that, it probably wouldn't be too good for our success."  Subscribe to Forbes and Save. Click Here.
Onetime English teacher Dick Fontaine is making a lot more dough as the CEO of GameStop. His shareholders are winning, too.