Japan's Bitcoin Reserve Company Metaplanet Cuts Executive Option Pool by 41% After Strong Shareholder Opposition
Japan's Bitcoin reserve company Metaplanet announced a 41% reduction in its executive option pool and has withdrawn its plan to transfer stock warrants as employee incentives, a concession made after strong opposition from shareholders.
Specifically, the company's "Series 10 Stock Subscription Rights" plan established in 2022 originally set the option pool at 20% of fully diluted equity, a mechanism that caused the pool to expand continuously as the company issued more shares to purchase Bitcoin, growing from an initial 46 million shares to approximately 319.4 million shares by August this year; after the 41% cut, the option pool is reduced to 188.2 million shares, and the conversion ratio is adjusted from 1:696 back to 1:410, which the company estimates eliminates over $220 million in warrant value.
CEO Simon Gerovich retained 64 million shares exercised under the old terms on August 28 and still has the right to subscribe for an additional 49.128 million shares under the new plan; he publicly responded that "we never intended to incentivize dilution that does not appreciate or barely appreciates."
The core of shareholder dissatisfaction lies in the floating option mechanism, which means that every time the company issues new shares to purchase Bitcoin, the management's option pool simultaneously "swells," while new shareholders joining after 2024 would bear the dilution consequences alone, creating a misalignment of interests where "management dilutes others to issue options to themselves"; reports also noted that the announcement did not address another controversial point of interest—Gerovich's relationship with MMXX Ventures and related stock transactions.
The market voted with its feet—after the announcement, Metaplanet's stock price fell a cumulative 15% over five trading days, including a single-day drop of 3.8% on Friday; as a hedge, the company estimates that this reduction increases the Bitcoin holdings per share on a fully diluted basis by approximately 8.8%, attempting to soothe investor concerns over dilution.
Mechanically, the existing management holding options suffers from the forced compression of the option pool, but it restores trust between new and old shareholders (especially investors entering after the 2024 Bitcoin reserve strategy transformation); the company also announced it will hire external consultants to redesign the compensation structure, attempting to rebind management incentives to "per share Bitcoin appreciation" rather than mere capital expansion, which is a governance concession forced by the capital market's loss of trust in the "equity dilution-based hoarding model."
Additional information: During the same period, Metaplanet also announced it will establish a wholly-owned subsidiary, Metaplanet Asset Management Asia Limited, in Hong Kong with an initial registered capital of $1 million, planned to launch in September 2026 as part of the "Project Nova" initiative, aiming to create a Bitcoin-centric financial services platform.
Source: Public information
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When Metaplanet established the floating option pool in 2022, the company was still a traditional hotel and investment business, and the original intention of the 20% floating ratio was to align management and shareholder interests; however, after the company transformed into a "Bitcoin reserve company" in 2024, continuously financing through stock issuance to purchase Bitcoin, the same option mechanism produced a completely different effect— the more the equity expands, the larger the management option pool, which mirrors the shareholder dilution controversies triggered by MicroStrategy's previous rounds of stock issuance.
In terms of funding and equity pathways, Metaplanet's core business model is "issuing shares for Bitcoin": continuously raising funds through new stock issuances and then using the raised funds to purchase Bitcoin as reserve assets, with each round of issuance recalculating the ownership ratio of old shareholders and the scale of management options; this 41% reduction and the cancellation of $220 million in warrant value essentially re-links the management options, which would have continued to expand, to the core metric of "Bitcoin content per share," attempting to shift management interests from "maximizing equity size" to "maximizing per share value."
This is highly similar to the shareholder dilution questions faced by MicroStrategy (now renamed Strategy) over the years—both companies adopt the reserve model of "issuing stock + issuing bonds to purchase Bitcoin" and have faced shareholder pressure due to management compensation being linked to equity expansion; the difference is that Metaplanet made this concession quickly under public pressure from shareholders (only four years from establishment in 2022 to adjustment in 2026), indicating that Asian listed companies rely more on direct signals of stock price declines (15% consecutive drop) to compel management corrections compared to their Western counterparts.
Essentially, this is a transfer of pricing power at the corporate governance level—previously, management held implicit pricing power over their own compensation scale through the "floating option pool" clause (the more shares issued, the larger the options), and this adjustment shifts that pricing power back to shareholders; structurally, the governance risk of such "cryptocurrency reserve-type listed companies" is fundamentally a mismatch between traditional equity incentive tools and the "infinite issuance hoarding" business model— as long as the company continues to issue shares to purchase crypto assets, the tension between management compensation and shareholder interests will repeatedly arise, and this concession seems more like a temporary appeasement rather than a complete resolution of structural contradictions.
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The more aggressive the issuance, the more severe the dilution, unless compensation is first linked to per share value.
The faster the stock price drops, the quicker the governance concessions come.
The moat of the hoarding model is the balance sheet, not the option pool.