Metaplanet’s Executive Stock Pool Spurs Shareholder Backlash as CEO Addresses MMXX Connections
Japanese Bitcoin treasury company Metaplanet faced shareholder backlash over the expansion of its executive stock option pool, raising concerns about substantial share dilution. Multiple investors opposed the increase of the pool from 46 million to 319.5 million shares, representing 20% of fully diluted shares. Metaplanet CEO Simon Gerovich pledged to review governance and compensation policies and clarified his role in connection with shareholder MMXX Ventures.
Shareholder Concerns Over Dilution and Investor Reactions
Metaplanet’s 10th Series executive option pool was designed to represent 20% of fully diluted shares and was automatically expanded to finance the company’s Bitcoin holdings accumulation.
Shareholders voiced objections via social media platforms over the pool’s growth from 46 million to 319.5 million shares, viewing this expansion as significant dilution of their ownership stakes.
A pseudonymous Metaplanet investor, Bitcoin Pharaoh, noted that Bitcoin Magazine CEO David Bailey, who defended the stock pool structure, personally benefited by receiving 300,000 options at a strike price of 105 Japanese yen while the stock traded at 510 yen. This was part of his compensation as a strategic board advisor. Bitcoin Pharaoh argued that management’s 26% share of Bitcoin implies that for every four Bitcoin purchased with shareholder funds, one was allocated to management.
CEO’s Response and Governance Review Plans
Simon Gerovich, Metaplanet’s CEO, stated that the company is currently reviewing governance and compensation policies and plans to announce updates upon completion.
He clarified his involvement with MMXX Ventures, noting he is a significant but non-majority shareholder of MMXX’s parent company and holds no executive role there, thereby distancing himself from MMXX’s influence on Metaplanet.
On August 31, Gerovich disclosed exercising 92,000 shares from the 10th Series executive option pool.
Market Expert Recommendations
Matthew Sigel, head of digital asset research at VanEck, advised Metaplanet to freeze further exercise rights from the 10th Series pool, call for voluntary surrender of excess rights by holders, and contemplate remedies for already exercised shares.
He suggested replacing the 10th Series with a shareholder-approved five-year incentive plan primarily tied to Bitcoin holdings per fully diluted share.
Metaplanet acknowledged in an August 18 notice that expanding the share pool increased dilution borne by existing shareholders.
Market Performance and Next Steps
Despite the internal disagreements, Metaplanet shares closed up in Tokyo trading on Wednesday, reducing the five-day decline to about 16.3%.
Cointelegraph requested comment from Metaplanet about the possibility of freezing remaining shares in the executive pool but had not received a response at the time of reporting.
Why it matters
This news highlights key issues in crypto asset markets and corporate governance of Bitcoin-holding firms. Dilution impacts existing investors’ ownership and potential returns, raising concerns about transparency and fairness in internal decision-making. The ties and potential conflicts between top management and shareholders, as shown in Metaplanet’s relationship with MMXX Ventures, emphasize the need for clear and equitable stock option and compensation policies. Expert recommendations to freeze the option pool and adopt shareholder-approved incentive plans reflect a trend toward more transparent and balanced compensation practices in the crypto industry.
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