Metaplanet Cuts Executive Stock Options 41% After Shareholder Backlash

Metaplanet, a Japanese Bitcoin treasury company, has sharply scaled back an executive compensation program that had sparked shareholder dilution concerns. The company revised its original plan after investor backlash intensified.

The Block reported on September 11 that Metaplanet will cut the number of shares that can be issued through the exercise of its Series 10 stock acquisition rights to about 188.2 million from about 319.5 million. That represents a reduction of roughly 41% from the original plan.

Series 10 is an options program that allows holders, including executives, to acquire shares at 10 yen apiece. It was set up in early 2023, before Metaplanet adopted its Bitcoin treasury strategy.

The controversy stemmed from a structure under which the number of shares tied to the options increased whenever Metaplanet issued new stock to fund Bitcoin purchases. Critics said repeated fundraising would heighten dilution risk for existing shareholders while giving Series 10 holders relatively greater benefits.

As part of the revision, Metaplanet will also lower the Series 10 conversion ratio to 410 shares per option from 696 shares. Chief Executive Officer Simon Gerovich said the overhaul would wipe out more than $220 million in warrant value while increasing Bitcoin holdings per diluted share by about 8.8%.

Gerovich also acknowledged that the company’s recent capital raising had become less effective at lifting Bitcoin holdings per share. Later-stage share issuance had favored Series 10 holders more than ordinary shareholders, he said.

The terms for the remaining options will also be tightened. The rest may be exercised in annual one-third increments from 2029 through 2031, and shares acquired through the program cannot be sold until August 2031. Metaplanet also withdrew a plan to convert part of the existing Series 10 rights into employee incentives and said it will establish a separate compensation framework.

The changes come as the stock remains under pressure. Metaplanet shares fell about 17% over two days earlier this week and are down more than 38% this year. That is a steeper decline than Bitcoin and Strategy (MSTR) over the same period.