Metaplanet faces VanEck criticism for excessive executive dilution after reducing compensation pool
Despite reducing its potential share allocation by 41%, Metaplanet's executive equity exposure still significantly exceeds that of comparable digital asset treasury companies, according to VanEck.
Investment management firm VanEck has taken aim at Metaplanet's executive compensation framework, contending that the Bitcoin treasury company's recent attempts to reduce shareholder dilution remain insufficient for properly aligning management interests with those of investors.
VanEck published a Friday analysis reviewing executive compensation across the ten largest companies maintaining digital asset treasuries, assigning Metaplanet's compensation framework a "Bad" rating, the sole firm to receive the lowest classification. The assessment pointed to an equity allocation plan representing 14.7% of fully diluted shares alongside officer exposure reaching 8.2%.
According to VanEck's findings, Metaplanet's officer exposure stands at approximately ten times the 0.8% average observed among the remaining nine companies under examination, with its total equity plan measuring nearly four times higher than the peer group average.
In contrast, Strategy, which holds the distinction of being the largest corporate Bitcoin (BTC) holder, maintains an equity plan equivalent to 2% of fully diluted shares with officer exposure at 0.5%. VanEck assigned its compensation framework a "Good" rating, highlighting that its equity reserve remains fixed and any plan increases necessitate a shareholder vote.
Metaplanet operates as a Japanese Bitcoin treasury company and presently holds the position of third-largest publicly traded corporate Bitcoin holder, possessing 43,000 BTC, as reported by BitcoinTreasuries.net.
Executive option pool grew through Bitcoin acquisition funding
According to VanEck's assessment, the discrepancy originates in part from Metaplanet's previous compensation framework, which permitted its option pool to increase automatically whenever the company issued shares for financing Bitcoin acquisitions. This mechanism resulted in the pool expanding from 46 million shares to 319.5 million, introducing approximately 273 million additional potential shares.
During that period, the expansion prompted objections from certain Metaplanet shareholders, who urged the company to eliminate the extra potential shares generated through the adjustment mechanism.
In response to the objections, Metaplanet terminated the automatic adjustment mechanism in August and reduced the total pool by 41% in September, decreasing it from 319.5 million to 188.2 million shares. Despite these modifications, VanEck maintained that the changes continue to "fall well short of the mark."
The Friday analysis urged Metaplanet to eliminate the approximately 273 million-share increase generated by the adjustment clause and substitute the remaining rights with a compensation plan subject to shareholder approval. VanEck additionally observed that without clawing back previously issued grants, a substantial portion of the dilution has already taken effect.
VanEck further recommended linking executive compensation to a performance metric such as Bitcoin per fully diluted share and implementing a written policy governing grant timing.