Metaplanet Directors Break Silence on CEO Share Plan: Management Took Real Risk and the Pool Is Already 41 Percent Smaller
Metaplanet’s independent directors have publicly defended the company’s controversial executive share plan, breaking weeks of silence amid escalating shareholder criticism over potential dilution at Japan’s most prominent Bitcoin treasury company.
In a September 29 letter, the directors argued that management took genuine financial risk when the Series 10 stock acquisition rights were created, paying for the rights with personal funds at what the board described as fair value, while accepting multi-year vesting conditions and lower cash compensation than comparable executives received elsewhere.
The context, the directors emphasized, is essential. The rights were issued when Metaplanet was still a struggling hotel operator with an uncertain future, long before the company adopted the Bitcoin treasury strategy that transformed its identity and its share price.
What the 2023 shareholder vote actually showed
The original arrangement was approved at an extraordinary general meeting on February 7, 2023. Including EVO, Metaplanet’s majority shareholder at the time, more than 98 percent of voting rights supported the proposal. Excluding EVO, support stood at 78.3 percent by voting rights, with 27,413 votes in favor and 7,619 against. Measured by shareholder headcount, 985 holders supported the plan and 150 opposed it, an approval rate of 86.8 percent.
The independent directors who signed the latest defense were not serving on Metaplanet’s board when the plan was approved, a point the letter makes explicitly to distance the current governance structure from the original decision.
Why the warrant pool ballooned
The original structure contained an adjustment mechanism designed to keep management’s stake near 20 percent as Metaplanet issued new shares. As the company raised round after round of equity to fund its Bitcoin purchases, that formula automatically increased the number of potential shares tied to the Series 10 rights.
The directors insist the growth came from this pre-approved formula rather than fresh discretionary awards, but investors grew increasingly vocal about how much dilution the plan could ultimately create at the peak of the expansion.
The September reset
Under pressure, Metaplanet stopped the automatic adjustment mechanism in August. A second restructuring announced on September 11 reset the warrant conversion ratio to 1:410, the level in place before the company’s September 2025 international share offering.
The reset reduced total potential shares attached to the Series 10 program by 41.1 percent, from roughly 319.46 million to 188.19 million. After earlier exercises, roughly 105.37 million potential shares remain. Metaplanet calculates the changes removed more than 220 million USD in potential warrant value and increased Bitcoin per fully diluted share by around 8.8 percent.
Exercise conditions also tightened considerably. One-third of the remaining unvested pool becomes exercisable in 2029, another third in 2030 and the final third in 2031, with shares received through exercises still subject to a five-year lock-up.
Gerovich recused himself
Chief executive Simon Gerovich, whose participation in the plan drew much of the criticism, received 64.03 million shares in August before the September warrant reset took effect. The independent directors noted that Gerovich recused himself from deliberations over the restructuring because he holds the affected stock rights.
Exercised and unexercised shares associated with the rights now represent approximately 12.5 percent of company shares, a percentage that will fall if Metaplanet issues more equity without expanding the warrant pool, which the board has committed not to do.
Market reaction and what comes next
Metaplanet shares ended Wednesday’s session at 286 yen, up about 1.8 percent from Tuesday’s closing level, suggesting investors gave the defense a cautious welcome after weeks of tension.
The dispute has drawn outside scrutiny as well. Earlier this month, VanEck labeled Metaplanet’s executive compensation structure as bad in a treasury sector dilution report, putting the Japanese firm under an unusual spotlight as it competes with corporate Bitcoin holders like Strategy.
For a company whose equity story depends on the credibility of its Bitcoin-per-share math, governance optics are not a sideshow. The directors’ letter, the 41 percent pool reduction and the extended vesting timeline through 2031 together represent Metaplanet’s attempt to convince shareholders that management alignment and shareholder dilution are no longer working at cross purposes. Bitcoin itself traded near 84,324 USD on spot markets as the letter circulated, according to Binance data, keeping the treasury narrative firmly in focus.
pool already 41 percent smaller and they still felt the need to publish a whole letter. tells you how much pressure the board was under from shareholders
fair point on timing. paying for the rights with personal funds at least makes it less of a straight giveaway
Exactly. Boards do not publish midnight letters unless proxy advisors are circling. The EVO exclusion tells you where the real opposition sits
letter also points out none of the current independent directors were even on the board in 2023. they had every incentive to stay quiet and defended it anyway
The 2023 context is fair, they took those Series 10 rights when it was a hotel company nobody cared about. Still do not love the dilution optics at these prices
78.3 percent approval excluding EVO is decent but hardly overwhelming for a plan this dilutive. the pool already being 41 percent smaller is the stronger defense imo
78.3 percent is basically the minimum passing grade for something this dilutive. the pool already being 41 percent smaller is what keeps me from being fully annoyed
the 41 percent smaller pool matters more than the 78.3 percent vote honestly. fewer shares outstanding to absorb means the dilution math everyone was screaming about last month looks different now
People forget these Series 10 rights were priced when Metaplanet was a hotel company nobody cared about. Management bet personal funds before the BTC pivot made it obvious.
thats the part critics keep skipping. paying out of pocket at fair value in 2023 when the stock was basically dead
exactly, they paid cash for rights on hotel stock nobody wanted. anyone could have taken the same risk and almost nobody did
98 percent with EVO counted, 78.3 without. the gap between those two numbers is the whole story of who actually wanted this plan