Metaplanet CEO Responds to Criticism Over MMXX and Stock Rights
Gerovich says Metaplanet did not explain the compensation plan around Series 10 well enough. The debate over dilution and MMXX is putting pressure on the bitcoin treasury model and governance.
Key Takeaways
- Metaplanet CEO Simon Gerovich responded to criticism about his role at MMXX Ventures and the management compensation structure.
- The debate centers on Series 10 Stock Acquisition Rights and shareholder dilution after the April 2024 bitcoin strategy.
- Metaplanet adjusted the plan in August, but kept the larger compensation pool intact, and the stock fell 7% on Monday.
Simon Gerovich, CEO of bitcoin treasury company Metaplanet, responded to criticism about his role at MMXX Ventures and the management compensation structure. According to him, the Japanese company did not explain the Series 10 Stock Acquisition Rights plan well enough. He also said he is a significant shareholder, but not a majority shareholder, of MMXX's parent company and did not play a role in that party's trading decisions.
Criticism of Stock Rights
The debate centers on a plan that was set up back in December 2022, before Metaplanet adopted its bitcoin strategy. Instead of a fixed number of shares for executives, management got access to a compensation pool equal to 20% of the company's fully diluted capital.
When Metaplanet switched to buying Bitcoin in April 2024, that structure got extra attention. Every time the company issued new shares to buy more Bitcoin, existing shareholders were diluted further, while Gerovich's option claim increased. That led to growing criticism from investors who wanted more clarity about the setup and the economic benefits for management.
Adjustment in August
In August, Metaplanet removed the link to the growth of the compensation pool and set the number of available compensation shares at about 320 million. However, the company did not reset the pool to the level it had before the bitcoin pivot. That left the earlier enlarged structure intact, although the board did introduce a five-year lock-up on exercised rights.
Gerovich said the adjustment was a step in the right direction, but the criticism did not go away. Shareholders pointed out that the main question about the dilution already built up was still unanswered. It also remained unclear to what extent Gerovich personally benefited economically from MMXX's sales, although Metaplanet did report his voting control over that party.
Why This Matters
For European crypto followers, this case shows that bitcoin treasury companies are judged not just on their BTC holdings, but also on governance and compensation structures. That matters because these companies often issue new shares to buy Bitcoin, which can quickly put pressure on the interests of management and shareholders. The debate around Metaplanet fits into a broader question of how transparent these kinds of models really are in practice.
The share price of Metaplanet fell 7% on Monday because of the ongoing attention on the compensation structure. Since the start of this year, the stock is down 43%, while the Nikkei 225 rose 31% over the same period. Over the past month, Bitcoin rose 23%, roughly in line with Metaplanet's performance, although other bitcoin treasury companies did better: Strategy rose 40% and Strive even 114%.
Governance is also playing a bigger role at other bitcoin treasury companies. For example, the debate over index inclusion for Strategy and Metaplanet already showed that investors and index providers are taking a closer look at these kinds of business models.
