Metaplanet significantly cuts executive stock pool and opens Hong Kong branch amid shareholder prote

Metaplanet significantly cuts its executive equity incentive pool and moves into Hong Kong in response to shareholder dissatisfaction with the dilution effect.

Metaplanet, a Tokyo Stock Exchange-listed company, announced two major measures on Friday: reducing the size of its Series 10 executive equity incentive pool by 41% and establishing a Hong Kong-based subsidiary to conduct Bitcoin and securities trading businesses. The two decisions mark the company's most substantial response to recent shareholder anger over dilution issues.

, said that the company reduced the number of underlying shares corresponding to the tenth series of rights from 319.464 million shares to 188.19 million shares, reducing a total of 131.3 million potential shares. The conversion ratio will return from 1:696 to 1:410, the level it was before Metaplanet's international share offering in September 2025. Shares that have previously been issued through exercise are still held by investors, and only future issuance rights are restricted.

Gerovich pointed out that this adjustment eliminated the value of warrants worth more than $220 million and increased fully diluted Bitcoin holdings per share by approximately 8.8%. In addition, the company canceled its original plan to issue up to 90,000 rights to the newly established employee and executive incentive mechanism and will hire external consultants to develop a new salary plan. The remaining unvested rights will face a longer lock-up period and will be vested in three phases in 2029, 2030 and 2031.

Origin of controversy: Automatic expansion mechanism exacerbates dilution

The tenth series of plans began in December 2022, before Metaplanet adopted its Bitcoin treasury strategy in April 2024. The original structure of the plan was designed to be 20% of the total fully diluted share capital, rather than a fixed number of shares. This design means that each stock offering used to fund Bitcoin purchases automatically expands the size of the executive incentive pool.

Over approximately two years, as Metaplanet repeatedly raised funds to accumulate Bitcoin, the incentive pool expanded from approximately 46 million shares to 319.464 million shares. Existing shareholders suffer a dilution effect in each financing, and the potential allocation ratio of insiders also increases simultaneously. Metaplanet itself admitted on August 18 that the formula exacerbated the dilution of existing shareholders.

In response to this issue, the board of directors took partial remedial measures: removing the automatic adjustment clause and freezing the incentive pool at 319.464 million shares, with a lock-up period until August 2031. However, critics believe the move is insufficient. Shareholders have argued that freezing an already expanded pool is not the same as reversing the process, with many calling for the elimination of the approximately 273 million shares created by the expansion.

Gerovich's exercise operation exacerbated conflicts

Ten days after the incentive pool was frozen, that is, on August 28, Gerovich exercised 92,000 rights and converted them into 64.03 million shares. This increased its direct shareholding to approximately 79.6 million shares, accounting for approximately 6.2% of the company's total share capital. Many shareholders believe that exercising rights at a time when the company's management has just admitted that the growth of the incentive pool harms the interests of ordinary investors is extremely inappropriate and insensitive.

Anonymous shareholder "Bitcoin Pharaoh" also pointed out the situation of David Bailey, Metaplanet's strategic adviser and CEO of Bitcoin Magazine. Bailey reportedly received 300,000 options at an exercise price of 105 yen, when the stock price was close to 510 yen. Bailey publicly defended the arrangement, saying a five-year 20% allocation to the team was reasonable and compared it to Michael Saylor's stake in Strategy.

Although Gerovich responded directly to the criticisms on September 6, it failed to reassure investors. The next day, Metaplanet's share price fell by about 7.5%, with a cumulative loss of about 17% over two trading days, although Bitcoin prices were basically flat over the same period. Notably, Gerovich avoided Friday's board vote on the adjustment because he personally held a tenth series of rights.

Matthew Sigel, director of digital asset research at VanEck, called the cut a meaningful concession that better aligned management's interests with shareholder interests. However, this view is not universally agreed. The incentive pool of 188.19 million shares is still much higher than the original 46 million shares, so this reduction only resolves part of the dispute and does not fully satisfy all shareholders 'demands for a complete withdrawal of the expansion. Affected by the news, Metaplanet's share price fell 3.8% on Friday, extending the previous five days of decline to a cumulative 15%.

Entering the Hong Kong market

At the same time, Metaplanet announced plans to establish Metaplanet Asset Management Asia Limited in Hong Kong with an initial capital of US$1 million, which is expected to start operations in late September. The subsidiary will conduct trading in Bitcoin, stocks and credit products during Asian market trading hours.

The move is in line with what Metaplanet calls the "Project Nova" project to create a bitcoin-centered financial platform covering asset management, securities and capital markets. In June, the company agreed to acquire Siiibo Securities for 2.1 billion yen (approximately US$13.1 million) to build its securities business unit. In addition, Metaplan has also established a US subsidiary, Metaplan Income., The capital is US$15 million and is dedicated to its Bitcoin revenue generation business.

Analysis of the current situation

The corporate governance controversy takes place against the backdrop of Metaplanet's radical strategic accumulation. As of its most recent purchase, Metaplanet holds more than 43,000 BTC, making it one of the largest enterprise-level Bitcoin holders in the world, behind Strategy and a few other institutions. The company's "550 Million Plan" goal is to hold 100,000 BTC by the end of 2026 and reach 210,000 BTC by 2027. Achieving these goals requires continued large share issues.

This reliance on capital raising is the core tension of shareholder response. Such a large-scale Bitcoin accumulation requires a stable inflow of new shares, and unless management exercises restraint in the compensation structure and stock pool, each financing will dilute the equity of existing holders. Friday's cuts partially alleviated those concerns, but satisfaction remains an open question for investors who want to completely reverse the 273 million share expansion.