Metaplanet Directors Break Silence on CEO Share Plan: Management Took Real Risk and the Pool Is Already 41 Percent Smaller

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.