Metaplanet directors push back against shareholder fury over a controversial executive payout plan

Metaplanet’s independent directors have publicly defended a management stock-acquisition rights scheme that sparked investor outrage because it allowed executives to acquire large numbers of shares at a deep discount. The rights, originally approved in 2023 when Metaplanet was a struggling hotel operator, were structured so management’s potential allocation stayed near 20% of fully diluted shares. That design caused the pool to expand automatically as the company issued new equity to fund Bitcoin purchases after the business pivot in April 2024. The board said management purchased the rights with personal funds during the company’s earlier financial crisis and that none of the current independent directors were on the board when the rights were issued. Directors argued the arrangement should be viewed as a risky, early investment and a long-term incentive for executives who led the turnaround, rather than as a post-success windfall. They also noted management’s cash pay remained restrained and urged that comparisons to peers account for founder ownership as well as executive compensation. Following shareholder backlash, Metaplanet reduced the rights pool by 41% on Sept. 11, lowering it to 188.2 million shares, terminating automatic adjustments for equity issued after Sept. 1, 2025, and adding staggered exercise restrictions through 2031. The company said the cut extinguished over $220 million in potential warrant value and that exercised and unexercised rights now represent about 12.5% of total shares. Shares already acquired through exercises are locked up until August 2031. The independent directors’ letter did not, however, resolve two major sticking points raised by investors. It did not address 64 million shares Gerovich exercised in August before the Sept. 11 reset; the company previously said those exercises were valid under the then-current terms and would not be returned. The letter also left unanswered details about MMXX Ventures, a Metaplanet shareholder whose share sales after the company adopted the Bitcoin strategy — and Gerovich’s disclosed but not fully detailed economic interest in MMXX’s parent — have drawn scrutiny from investors.