Metaplanet’s independent directors have defended the company’s controversial executive share plan after weeks of criticism from shareholders concerned about dilution and the size of potential awards linked to CEO Simon Gerovich.
In a Sept. 29 letter, the directors argued that the Series 10 stock acquisition rights should be viewed in the context of Metaplanet’s earlier financial struggles, before the company adopted its Bitcoin treasury strategy.
The board also pointed to recent changes that reduced the potential share pool by about 41% and introduced stricter conditions for future exercises.
According to the directors, management took financial risk when the rights were created by purchasing them with personal funds, accepting multi-year vesting periods and receiving lower cash compensation than comparable executives.
The independent directors currently defending the plan were not members of the board when the original arrangement was approved.
Why Metaplanet directors are defending the share plan
Metaplanet says the Series 10 rights were created at a time when the company was still operating mainly as a struggling hotel business and facing an uncertain financial future.
The directors argue that the rights were designed as long-term equity participation tied to the company’s recovery rather than ordinary executive compensation.
Shareholders approved the original arrangement during an extraordinary general meeting on Feb. 7, 2023.
According to Metaplanet, more than 98% of voting rights supported the proposal when votes from EVO, the company’s majority shareholder at the time, were included.
Excluding EVO, support stood at 78.3% of voting rights, with 27,413 votes in favor and 7,619 against.
By shareholder headcount, 985 holders supported the proposal while 150 opposed it, representing an approval rate of approximately 86.8%.
One of the most controversial features of the original plan was an adjustment formula that aimed to keep management’s ownership position near 20% as Metaplanet issued new shares.
The board says increases in the number of shares linked to the rights were produced automatically by this previously approved formula rather than through new executive awards each time the company raised capital.
However, as Metaplanet issued additional shares to fund Bitcoin purchases, the number of potential shares attached to the Series 10 rights continued to increase.
That expansion eventually led to stronger criticism from investors concerned about how much dilution existing shareholders could face.
Metaplanet cuts potential dilution after shareholder concerns
Metaplanet responded to investor pressure by first suspending the automatic adjustment mechanism in August.
The company then announced a broader restructuring on Sept. 11, resetting the warrant conversion ratio to 1:410.
That was the ratio in effect before Metaplanet’s international share offering in September 2025.
The change reduced the maximum number of potential shares attached to the Series 10 program by 41.1%, from roughly 319.46 million shares to approximately 188.19 million.
After accounting for rights that had already been exercised, the remaining potential share pool fell to around 105.37 million shares.
Metaplanet estimates that the restructuring removed more than $220 million in potential warrant value and increased Bitcoin per fully diluted share by approximately 8.8%.
Those figures are company calculations based on the revised warrant structure.
Importantly, future Metaplanet share issuances will no longer automatically increase the Series 10 share pool.
The board said shares already issued or still available through the rights currently represent approximately 12.5% of Metaplanet’s shares.
That percentage could decline over time if the company issues additional equity while keeping the Series 10 pool fixed.
Exercise conditions have become stricter
Metaplanet also tightened the schedule for exercising the remaining rights.
Under the revised structure, one-third of the unvested rights will become exercisable in 2029, another third in 2030 and the remaining third in 2031.
Shares issued through the rights remain subject to a five-year lock-up period introduced in August.
That restriction runs until Aug. 17, 2031.
Metaplanet also withdrew a proposed employee incentive pool that would have been equivalent to 20% of the previous Series 10 pool.
The changes appear designed to address concerns about both short-term dilution and management’s ability to quickly monetize shares received through the program.
Questions remain over Simon Gerovich’s 64 million shares
While the independent directors defended the revised structure, their Sept. 29 letter did not fully address shares already issued to CEO Simon Gerovich before the warrant reduction.
Metaplanet previously disclosed that Gerovich exercised 92,000 Series 10 rights on Aug. 28.
The exercise resulted in Gerovich receiving 64,032,000 Metaplanet shares.
His directly held common shares increased from 15,555,500 to 79,587,500 following the transaction.
Those 64.032 million shares remain subject to the lock-up period ending Aug. 17, 2031.
However, Metaplanet did not cancel or reduce those shares when it later cut the remaining Series 10 share pool.
That has remained an important part of the shareholder debate.
Some investors have questioned whether shares already obtained through the program should be treated differently from rights that had not yet been exercised.
The independent directors said Gerovich recused himself from their deliberations and did not participate in the vote because he personally holds Series 10 rights.
MMXX Ventures remains part of the debate
Questions surrounding MMXX Ventures have also contributed to shareholder concerns.
Gerovich has previously said he is a significant but non-majority shareholder in MMXX’s parent company.
He has also stated that he is not a director or officer of MMXX and does not control its investment or trading decisions.
However, the independent directors’ latest letter did not provide additional details about MMXX’s ownership structure.
It also did not address the firm’s previous sales of Metaplanet shares or provide further information about Gerovich’s economic interest in the parent company.
As a result, some questions raised during the earlier shareholder debate remain unresolved.
Metaplanet links the compensation plan to its Bitcoin transformation
The board’s defense of the Series 10 rights also focused heavily on Metaplanet’s transformation into a Bitcoin treasury company.
Metaplanet began purchasing Bitcoin in April 2024 as part of a major shift away from its previous hotel-focused business model.
The company says Bitcoin per fully diluted share increased approximately 44 times between its first Bitcoin purchase and Sept. 1, 2025.
During the same period, Metaplanet’s share price rose from 19 yen on April 8, 2024 to 831 yen on Sept. 1, 2025.
As of Sept. 28, the board said Bitcoin per fully diluted share had increased roughly 60-fold compared with the level recorded when the Bitcoin treasury strategy began.
Metaplanet currently reports holding 43,000 BTC after purchasing another 2,823 Bitcoin during the second quarter.
The company has continued building businesses around its Bitcoin holdings while making changes to its capital structure.
Recent initiatives include a Hong Kong asset-management subsidiary and a proposed U.S. Bitcoin treasury platform involving Super League.
Metaplanet shares remain under pressure in 2026
Metaplanet shares closed Sept. 30 at 286 yen, up approximately 1.78% from the previous day’s close of 281 yen.
Despite the daily gain, the stock remained down roughly 29% during 2026.
That decline contrasts with the much larger longer-term appreciation recorded since Metaplanet introduced its Bitcoin treasury strategy.
The company’s share price performance has become another important part of the debate over executive compensation, dilution and shareholder value.
Supporters of the plan point to Metaplanet’s long-term transformation and Bitcoin accumulation, while critics continue to focus on the potential impact of large executive equity awards.
Metaplanet is working on a new executive incentive plan
The independent directors also revealed that Metaplanet is working with an international compensation adviser to develop a new performance-linked executive incentive program.
The company has not yet disclosed the final structure of the replacement plan.
No launch date was provided in the Sept. 29 letter either.
The development suggests that Metaplanet is attempting to move toward a compensation model more directly tied to measurable performance while addressing investor concerns surrounding the Series 10 rights.
For now, the company maintains that the original plan helped align management with Metaplanet’s turnaround and Bitcoin strategy.
At the same time, the board’s decision to reduce the share pool, tighten exercise conditions and develop a new compensation structure shows that shareholder concerns have influenced how the company approaches executive incentives going forward.
