Bitcoin: VanEck Criticizes Metaplanet's Compensation Model

VanEck is now targeting Metaplanet's governance, not its Bitcoin strategy. The manager believes that the company's stock-based compensation plan remains far too generous despite two corrections made since August. The pool still represents 14.7% of the fully diluted capital, while the executives' exposure reaches 8.2%. Metaplanet has, however, reduced the number of potential shares linked to this mechanism by 41%. For VanEck, the numbers still do not add up.

In Brief

• Metaplanet's stock plan still represents 14.7% of the fully diluted capital.
• The potential pool has been reduced from 319.5 to 188.2 million shares.
• VanEck now calls for compensation more closely tied to Bitcoin per diluted share.

Bitcoin: An Options Pool Still Far Superior to Others

VanEck compared the ten largest publicly traded companies holding digital assets in cash. Metaplanet is the only one to receive its most negative assessment regarding executive compensation. This is VanEck's evaluation, not an accounting or regulatory qualification.

The Japanese group, however, possesses one of the largest reserves of Bitcoin among publicly traded companies. Its holdings amount to 43,000 BTC, following the purchase of an additional 2,823 bitcoins announced this summer.

The issue pointed out by VanEck lies elsewhere. The stock plan represents 14.7% of the fully diluted shares. Executives concentrate 8.2%, compared to only 0.8% on average among the other nine companies studied. The largest individual beneficiary reaches 3.8%, against 0.6% on average among peers.

Strategy presents a rather spectacular gap: its plan represents 2% of the diluted capital and its executives' exposure is only 0.5%.

Each Bitcoin Purchase Also Increased Options

The origin of the problem dates back to an old compensation mechanism. Metaplanet had planned for its options pool to evolve with the total number of shares of the company. When the company issued new shares to finance Bitcoin purchases, the number of options available for certain executives also increased.

The pool thus grew from 46 million to 319.5 million potential shares. About 273 million were added through this mechanism. Metaplanet acknowledged in August that this formula increased the dilution borne by shareholders. The automatic mechanism was then removed.

Then, on September 11, the company reduced the potential pool to 188.2 million shares, a 41% decrease. Unvested rights were also subjected to new restrictions, with exercise periods staggered between 2029 and 2031.

This correction comes as Metaplanet multiplies operations around Bitcoin. It is also developing Superplanet in the United States, a listed vehicle aimed at expanding its cash strategy with 2,100 BTC. VanEck acknowledges the reduction. It simply considers it insufficient.

VanEck Wants Bitcoin-Linked Compensation Per Share

The manager proposes four changes. The main one would be to replace the current system with a plan approved by shareholders and reduced to a few percentage points of the diluted capital. VanEck also wants rewards to be tied to a measure such as Bitcoin held per fully diluted share.

The logic is quite simple: buying more BTC is not enough if each fundraising dilutes shareholders simultaneously.

Metaplanet has already removed the automatic increase clause. Another issue remains: 82.8 million shares had already been issued to insiders before the last correction. According to VanEck, going fully back would therefore require more than just a simple reduction of the future pool.

This question arises at a time when financing Metaplanet's Bitcoin strategy becomes more complex. The group now uses several tools, including bonds. Metaplanet has notably launched its BitBonds while maintaining its 43,000 BTC. Therefore, VanEck does not criticize the 43,000 bitcoins themselves here. Its report raises another question: what portion of the value created by this accumulation actually returns to shareholders once dilution is taken into account? Metaplanet has already reduced its pool by 41%. For VanEck, it is still far too large.