Metaplanet Cuts Dilution After Shareholder Protest
After shareholder criticism, the Tokyo-based bitcoin treasury is shrinking the share pool in its reward plan. Metaplanet is also working on a new compensation model for management.
Key Takeaways
- Metaplanet is cutting the potential share pool in its Series 10 Stock Acquisition Rights plan by 41% to 188.2 million shares.
- The change follows shareholder criticism that the setup diluted their stake and gave management too much of an advantage.
- The company is scrapping an earlier plan to transfer warrants and is working with advisers on a new compensation plan.
Metaplanet has reduced the potential share pool under its Series 10 Stock Acquisition Rights plan by 41% after shareholders spoke out against the setup. The bitcoin treasury firm in Tokyo is bringing the maximum pool down to 188.2 million shares, according to documents published on Friday.
Adjusted Reward Plan
The plan was set up in 2022 as a compensation structure for management. Instead of a fixed number of shares, the arrangement used a pool equal to 20% of Metaplanet's fully diluted share capital, with adjustments based on new issuances. In August, the company had already reduced that pool to about 320 million shares.
The latest move follows ongoing criticism from investors, who said the structure diluted their stake while management benefited. According to CEO Simon Gerovich, it was never the intention to encourage dilution that did not add value or only added limited value. He also said the change removes more than $220 million (€190 million) in warrant value, because the flexible calculation, in his view, created too much value for management.
What Shareholders Took Issue With
The debate around Metaplanet shows how sensitive compensation structures can be at companies following an unusual bitcoin strategy. Since the company started selling shares in 2024 to buy bitcoin, investors have clearly become more focused on dilution and control. For crypto investors, that matters because these treasury companies often tie their capital structure directly to their bitcoin holdings. That balance between financing and shareholder value also comes up at other publicly traded bitcoin companies, such as Strategy, where the capital structure and buyback policy are also closely linked to the bitcoin strategy.
Gerovich will not get back the 64 million shares he received on August 28 under the old terms. However, under the revised structure, he still has the right to another 49,128,000 shares. The company also said it is withdrawing an earlier announced plan to transfer warrants to an employee incentive vehicle and is working with outside advisers on a new compensation plan.
