Key facts
- Metaplanet's executive stock pool is facing shareholder backlash over dilution concerns.
- Investors are urging the company to freeze exercise rights tied to 273 million shares.
- The 10th Series executive option pool was designed as 20% of fully diluted shares and expanded as new shares were issued.
- Metaplanet CEO Simon Gerovich stated he would review governance and compensation policies.
- Metaplanet acknowledged that the share pool expansion amplifies dilution for existing shareholders.
Metaplanet's executive stock pool is facing significant shareholder backlash due to concerns over stock dilution. The company's 10th Series executive option pool, initially set at 20% of fully diluted shares, automatically expanded as Metaplanet issued new shares to fund its Bitcoin accumulation. This expansion, which saw the pool grow from 46 million to 319.5 million shares by August 18, has drawn sharp criticism from shareholders who argue it magnifies dilution for existing investors.
Bitcoin Magazine CEO David Bailey defended the executive stock model, calling the 20% allocation over five years "isn't some crazy number" and highlighted his long-term investment in Metaplanet. However, pseudonymous shareholder Bitcoin Pharaoh alleged that Bailey personally benefited from the stock options, receiving 300,000 options at a strike price of 105 Japanese yen when the stock was trading at 510 yen, as compensation for his role as a strategic board advisor.
Metaplanet CEO Simon Gerovich has pledged to review the company's governance and compensation policies and sought to distance himself from Metaplanet shareholder MMXX Ventures, stating he is a significant but non-majority shareholder in MMXX's parent company without an executive role. Gerovich exercised 92,000 shares from the executive options pool on August 31.
Matthew Sigel, head of digital asset research at VanEck, recommended that Metaplanet "freeze" further exercise rights from the 10th Series option pool, encourage voluntary surrender of excess rights, and consider replacing the current plan with a shareholder-approved, five-year incentive plan tied to Bitcoin per fully diluted share. Metaplanet acknowledged in an August 18 notice that the decision to expand the share pool "amplifies the dilution borne by existing shareholders."
Despite the controversy, Metaplanet's shares closed up on Wednesday, trimming their five-day decline to approximately 16.3%.
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