Metaplanet's Bitcoin strategy triggers massive CEO compensation, shareholders protest

Written by: Oluwapelumi Adejumo

Compiled by Saoirse, Foresight News

Metaplanet has made a significant investment in Bitcoin assets, but this has led to revelations that executives received substantial windfall compensation; shareholders are now demanding the company rescind this bonus.

At the heart of this dispute is the Tokyo-listed company’s continuous issuance of shares to raise funds for Bitcoin purchases, leading to a corresponding expansion of the executive stock option pool. Shareholders are now demanding the cancellation of approximately 273 million potential shares that were included in management compensation plans during the expansion.

The focus of the dispute lies in Metaplanet’s 10th series of stock subscription rights. The plan was approved by shareholders in early 2023, before the company transitioned to digital asset operations, with an initial allocation of 46 million shares.

This plan includes a mechanism designed to keep the underlying shares subject to options at approximately 20% of the company’s defined fully diluted total shares outstanding.

In April 2024, CEO Simon Gerovich drove Metaplanet’s transition to a Bitcoin treasury model, significantly altering the company’s funding requirements. Metaplanet raised capital multiple times through equity markets to purchase Bitcoin, ultimately accumulating a Bitcoin treasury holding of 43,000 BTC.

From approximately 153.9 million shares outstanding at the inception of the Bitcoin strategy, the total number of shares grew to 1.28 billion by the end of June 2026. Due to the formula for Series 10 warrants adjusting in tandem with the company’s capital structure, the executive option pool expanded from an initial 46 million shares to 319.464 million potential shares.

Metaplanet abolished this adjustment mechanism on August 18, and the locked option pool ceased to expand further.

The company acknowledged in its announcement that the provision "would amplify the dilution pressure on existing shareholders" and could raise questions about whether the financing decision conflicts with the interests of equity subscription right holders.

However, Metaplanet only froze the compensation pool at its expanded size and did not revert it to its original scale. This means that the approximately 273 million additional shares created before the mechanism was abolished remain under the control of management.

Just days after the August revision took effect, Gerovich exercised part of his compensation award, intensifying shareholder opposition.

On August 28, the CEO exercised 92,000 Series 10 warrants, acquiring 64.032 million newly issued shares. This transaction increased his direct ownership from 15.56 million shares to nearly 79.6 million shares.

Gerovich exercised options at the previous exercise price of ¥10 per share, with a total cost of approximately ¥6.403 billion. Based on Metaplanet’s share price of ¥244, the market value of these newly issued shares is approximately ¥15.6 billion, resulting in a paper gain of nearly ¥15 billion between the exercise cost and market value.

This gain has not yet been realized. The revised terms for August stipulate that shares acquired through this plan are subject to a five-year lock-up period and cannot be sold or transferred before August 2031, except under normal circumstances.

However, the equity dilution effect has already occurred once the new shares are issued.

As of June 30, Gerovich held 276,000 of the 459,000 outstanding Series 10 warrants. After exercising 92,000 warrants, approximately 184,000 warrants remain outstanding, assuming all other conditions remain unchanged. Additional warrants are held by other executives and employees, and the remaining awards will continue to vest through 2028.

Investors are particularly focused on this compensation pool because it directly impacts the core metric of Metaplanet’s treasury strategy: the number of bitcoins per fully diluted share.

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

Shareholder Ragnar is one of the main proponents calling for the direct cancellation of approximately 273 million potential shares exceeding the original compensation plan size. He posted on X:

The only solution is to rescind these 273 million additional shares and replace them with a new incentive plan that has retroactive effect.

Assuming all other conditions remain unchanged, excluding these potential shares from the total share denominator would increase Metaplanet’s Bitcoin exposure per share to approximately 3,166 satoshis, representing an increase of about 20%.

Ragnar questions: Since Metaplanet has itself acknowledged that this mechanism exacerbates shareholder dilution and creates risks related to financing incentives, why are executives still retaining this additional compensation?

He also noted that Metaplanet’s international offering last year generated an additional 96.25 million potential shares due to this adjustment clause. According to him, shareholders had already publicly questioned this arrangement as early as September to October 2025, several months before the company eliminated the mechanism.

These newly issued shares have no performance criteria tied to per-bitcoin growth or other shareholder return metrics; only a five-year lock-up period was added in the August revision.

Ragnar argues that the company should replace this inflated reward with a compensation plan directly tied to future performance, rather than retaining the gains accumulated under the outdated rules.

Beyond salary disputes, another governance controversy has further intensified tensions, targeting MMXX Ventures—a long-term shareholder of Metaplanet and a former lender to the company.

Gerovich recently stated that he is an important but non-controlling shareholder of MMXX’s parent company and does not participate in investment or trading decisions for the entity.

However, investors continue to demand greater disclosure regarding MMXX’s ownership, voting structure, and Gerovich’s economic exposure in Metaplanet-related transactions.

Metaplanet also proposes transferring up to 90,000 remaining Series 10 warrants (equivalent to 62.64 million potential shares) into a new long-term incentive plan for executives and employees. The new program can include performance and service period requirements and will not issue additional shares beyond the existing cap.

Gerovich acknowledged shortcomings in the company’s external communications and stated that Metaplanet will continuously review its corporate governance and compensation system.

However, this response does not address the shareholders' core concern. Although Metaplanet will no longer expand the executive option pool through subsequent equity financing, management has not committed to abandoning the approximately 273 million potential shares created prior to the elimination of the mechanism.