Metaplanet Cuts Executive Stock Options 41% After Shareholder Backlash

Japan-based Bitcoin treasury company Metaplanet has sharply scaled back an executive compensation program that had sparked controversy over shareholder dilution, retreating from its original plan after investor backlash intensified.

The Block reported on September 11 that Metaplanet will cut the number of shares issuable 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%.

Series 10 is an option program that allows executives and other rights holders to acquire shares at 10 yen each. It was established in early 2023, before Metaplanet adopted its Bitcoin treasury strategy.

The dispute centered on a structure in which the number of shares tied to option exercises also increased whenever Metaplanet issued new shares to raise money for Bitcoin purchases. Critics argued that repeated capital raising would increase dilution risk for existing shareholders while giving Series 10 holders a relatively larger benefit.

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 erase more than $220 million in warrant value while increasing Bitcoin holdings per diluted share by about 8.8%.

Gerovich recently acknowledged that the company’s capital raising had become less effective at boosting Bitcoin holdings per share. He also conceded that later-stage share issuance had worked relatively more in favor of Series 10 holders than ordinary shareholders.

The company is also tightening the terms for exercising the remaining options. The rest of the allotment may be exercised in annual one-third portions from 2029 through 2031, and shares acquired through the program will be subject to sale restrictions 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 move comes 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 marks a steeper decline than Bitcoin and Strategy (MSTR) over the same period.