Metaplanet directors defend 188M-share option haul: "we rebuilt the ship, here's the life rafts" 🏴‍☠️

The independent directors of Bitcoin treasury firm Metaplanet (3350) have pushed back against shareholders angry over a controversial executive stock-option plan that gives CEO Simon Gerovich and four other employees the right to acquire 188 million shares at 10 yen each, well below the stock's recent price of around 286 yen. The directors argued the plan reflects management's financial risk and role in restructuring the company, though they left unanswered shareholder questions about Gerovich's previously exercised 64 million shares and the MMXX Ventures arrangement.

At the center of the dispute is an unusual feature of the original 2023 plan: management's potential allocation was designed to stay around 20% of Metaplanet's fully diluted share count. That meant each time Metaplanet issued new equity to fund bitcoin purchases after its April 2024 pivot, existing shareholders were diluted while the pool of shares management could monetize automatically grew. The reward pool swelled from about 46 million potential shares to 319 million before the company froze the number, with Gerovich's rights covering 113 million shares, 64 million of which he had already exercised.

Following the backlash, Metaplanet cut the pool by 41% on Sept. 11, extinguishing more than $220 million in potential warrant value. In a Sept. 29 letter, the independent directors said the original plan had been approved by a majority of shareholders at the time and was fair because management purchased the rights at fair value with personal funds while the company, then a struggling hotel operator, faced a financial crisis with no guarantee its transformation would succeed. None of the current independent directors was on the board when the rights were issued.

The letter did not address Gerovich's already-exercised 64 million shares or concerns raised about MMXX Ventures. Metaplanet has not announced a date for further engagement with shareholders or whether the governance questions will be addressed at a future meeting.