Metaplanet’s (3350) independent directors have defended the bitcoin treasury company’s disputed executive stock-option plan, saying management took financial risks and played a role in the company’s restructuring. The directors, however, did not address questions surrounding CEO Simon Gerovich’s exercised shares or MMXX Ventures.
The revised arrangement gives Gerovich and four other employees rights to purchase 188 million Metaplanet shares at 10 yen each, well below the stock’s current price of roughly 286 yen.
Shareholder criticism has centered on a feature of the original plan that kept management’s potential allocation at approximately 20% of Metaplanet’s fully diluted share count.
Because of that structure, the potential number of shares available to management increased as Metaplanet issued new equity to raise funds for bitcoin purchases. Existing investors were diluted by those offerings, while management’s potential share entitlement grew.
The original arrangement was approved in 2023, when Metaplanet was still a struggling hotel operator. After the company adopted a bitcoin acquisition strategy in April 2024, each new equity raise used to fund bitcoin purchases continued to dilute existing shareholders while increasing Gerovich’s potential option allocation.
The pool expanded from about 46 million potential shares to 319 million before Metaplanet ultimately froze the number of available reward shares. Gerovich’s rights then covered 113 million shares, including 64 million shares he had already exercised.
Metaplanet reduced the pool by 41% on Sept. 11 following shareholder backlash.
In a Sept. 29 letter, the independent directors said the original plan was appropriate given the circumstances in which it was established and noted that a majority of shareholders had approved it at the time.
They said management had purchased the rights at fair value using personal funds when Metaplanet was facing a financial crisis. The company was still operating as a troubled hotel business, and the success of its eventual transformation was uncertain.
None of the independent directors currently serving on the board was present when the rights were originally granted.
The directors said the arrangement should be viewed as more than compensation awarded after Metaplanet’s bitcoin strategy succeeded. They characterized it as an early investment by executives who accepted financial risk while attempting to turn around the business, as well as a long-term incentive designed to keep them committed to the company’s performance.
They also argued that comparisons with other companies should factor in founder ownership as well as executive compensation. Management’s cash compensation, they said, remained limited.
The Sept. 11 revision reduced the pool to 188.2 million shares and removed more than $220 million in potential warrant value, according to Metaplanet.
The changes also stopped automatic adjustments linked to equity issued after Sept. 1, 2025, and introduced phased exercise restrictions for the remaining rights through 2031. Shares already acquired through exercised rights will remain locked until August 2031.
Metaplanet said the changes increased fully diluted bitcoin per share by about 8.8%. The independent directors said exercised and unexercised rights now represent approximately 12.5% of the company’s total shares.
Gerovich, the only director holding the rights, was excluded from the review’s deliberations and resolutions, according to the independent directors.
Shareholders still seek answers
The directors’ explanation does not resolve several concerns behind the shareholder backlash.
The 64 million shares Gerovich acquired through exercising rights in August are one outstanding issue. The exercises took place before the Sept. 11 reset, and the shares remain outstanding. Metaplanet has previously said they will not be returned because the exercises complied with the terms that were in effect at the time.
Another unresolved issue involves MMXX Ventures, a Metaplanet shareholder whose stock sales and Gerovich’s personal economic interest have attracted scrutiny from investors.
MMXX sold Metaplanet shares after the company shifted to its bitcoin strategy, while Metaplanet was also raising capital through an equity issuance.
Gerovich has said he is a significant but non-majority shareholder in MMXX’s parent company and does not participate in its trading decisions.
Metaplanet had disclosed that it held voting control over MMXX but had not publicly detailed the size of Gerovich’s personal economic interest linked to the entity’s sales of Metaplanet shares.
Metaplanet stock closed Wednesday 2% higher at 286 yen.
The company’s Sept. 30 update provided additional context on the controversy surrounding the stock-rights plan.
