Metaplanet's Bitcoin Strategy Inflates CEO Pay, Angering Shareholders

Author: Oluwapelumi Adejumo

Compiled by: Saoirse, Foresight News

Metaplanet's aggressive accumulation of Bitcoin assets has led to a controversy over massive windfall compensation for executives, with shareholders demanding the company rescind the award.

The core of the dispute is that the Tokyo-listed company has repeatedly issued new shares to raise funds for Bitcoin purchases, which in turn has inflated the executive option pool. Shareholders are now demanding the cancellation of approximately 273 million potential shares that were added to management's compensation plan during the expansion.

Bitcoin Financing Inflates Executive Compensation Pool

The controversy centers on Metaplanet's 10th series stock acquisition rights. The plan was approved by shareholders in early 2023, before the company pivoted to digital assets, with an initial allocation of 46 million shares.

The plan includes an adjustment mechanism designed to keep the underlying shares of the options at approximately 20% of the company's fully diluted total share capital.

In April 2024, CEO Simon Gerovich pushed Metaplanet to adopt a Bitcoin treasury model, dramatically changing the company's capital needs. Metaplanet raised funds multiple times in the equity market to buy Bitcoin, eventually accumulating 43,000 BTC in its treasury.

From approximately 153.9 million shares outstanding at the start of the Bitcoin strategy, the total share count grew to 1.28 billion by the end of June 2026. Because the formula for the 10th series acquisition rights adjusts with the company's capital structure, the executive option pool expanded from the initial 46 million shares to 319.464 million potential shares.

Metaplanet abolished the adjustment mechanism on August 18, freezing the option pool from further expansion.

In its announcement, the company acknowledged that the clause "amplifies the dilution pressure borne by existing shareholders" and could raise questions about whether financing decisions conflict with the interests of option holders.

However, Metaplanet only froze the compensation pool at its expanded size and did not restore it to the original level. This means that the approximately 273 million potential shares added before the mechanism was abolished remain with management.

CEO Exercises Part of Award, Receives 64 Million Shares

Just days after the August amendment took effect, Gerovich exercised a portion of his compensation award, intensifying shareholder opposition.

On August 28, the CEO exercised 92,000 units of the 10th series acquisition rights, receiving 64.032 million newly issued shares. This transaction increased his direct shareholding from 15.56 million shares to nearly 79.6 million shares.

Gerovich exercised the options at the old exercise price of 10 yen per share, with a total cost of approximately 640.3 million yen. Based on Metaplanet's stock price of 244 yen, the market value of these newly issued shares is approximately 15.6 billion yen, resulting in a paper gain of nearly 15 billion yen.

This gain has not been realized. The August amendment imposes a 5-year lock-up period on shares acquired through the plan, generally prohibiting sale or transfer before August 2031.

However, the dilution effect occurs as soon as the new shares are issued.

As of June 30, Gerovich held 276,000 of the total 459,000 outstanding 10th series acquisition rights. After exercising 92,000 units, he retains approximately 184,000 acquisition rights, assuming no other changes. Other executives and employees hold additional acquisition rights, and the remaining awards will continue to vest until 2028.

Compensation Legacy Impacts Bitcoin per Share Metric

Investors are particularly focused on this compensation pool because it directly affects the core metric of Metaplanet's treasury strategy: Bitcoin per fully diluted share.

As of June 30, the company held 43,000 BTC, corresponding to approximately 1.63 billion fully diluted shares, or about 2,635 satoshis per share. This denominator already includes the potential dilution from the 10th series awards.

Shareholder Ragnar is one of the main advocates, demanding the cancellation of the approximately 273 million potential shares that exceed the original compensation plan. He posted on X:

"The only way out is to cancel these 273 million additional shares and replace them with a new incentive plan that is retroactive."

Assuming all else remains equal, removing these potential shares from the denominator would increase Metaplanet's Bitcoin exposure per share to approximately 3,166 satoshis, an increase of about 20%.

Ragnar questioned why executives should retain this additional compensation when Metaplanet itself has acknowledged that the mechanism exacerbates shareholder dilution and creates financing incentive concerns.

He also noted that Metaplanet's international issuance last year relied on the same adjustment clause to generate an additional 96.25 million potential shares. According to him, shareholders had publicly questioned the arrangement as early as September to October 2025, months before the company abolished the mechanism.

These additional shares have no performance conditions tied to Bitcoin per share growth or other shareholder return metrics; only a 5-year sale restriction was added in the August amendment.

Ragnar argues that the company should replace the inflated award with a compensation plan directly tied to future performance, rather than retaining the gains accumulated under the now-defunct rules.

Corporate Governance Scrutiny Extends to MMXX Ventures

Beyond the compensation dispute, another governance controversy has intensified tensions, this time involving MMXX Ventures—a long-term shareholder of Metaplanet and formerly a lender to the company.

Gerovich recently stated that he is a "significant but non-controlling shareholder" of MMXX's parent company and does not participate in the entity's investment and trading decisions.

But investors continue to demand more disclosure: MMXX's ownership, voting structure, and Gerovich's economic exposure in Metaplanet-related transactions.

Metaplanet has also proposed transferring up to 90,000 remaining 10th series acquisition rights (corresponding to 62.64 million potential shares) into a new long-term incentive vehicle for executives and employees. The new plan can include performance and service requirements and will not add shares beyond the existing cap.

Gerovich acknowledged shortcomings in the company's external communications and said Metaplanet will continue to review its corporate governance and compensation systems.

But this response does not address shareholders' core demands. While Metaplanet will no longer expand the executive option pool through subsequent equity financing, management has not committed to giving up the approximately 273 million potential shares generated before the mechanism was abolished.