Metaplanet Fails All 4 Vaneck Tests On Treasury Executive Compensation

What Happened

The deal investors accept is straightforward. The company buys enough Bitcoin that each remaining slice is still worth more than before.

Market Context

Companies pay executives partly in stock options. An option is the right to buy company shares later at a fixed price. If the share price rises, that right is worth money.

Metaplanet was a struggling hotel operator in 2022. Shareholders approved a rescue plan in February 2023, granting seven staff options over 46 million shares at a ¥10 strike price.

Why It Matters

Those options sit in a pool. A pool worth 2% of the company means executives could eventually claim 2% of all shares.

That figure was never fixed. A clause inside the plan reset the award to 20% of every share the company could issue.

Details

VanEck rated Metaplanet “Bad” on executive compensation practices, the only company among the 10 largest digital asset treasuries to get that grade. It fails all four of the firm’s tests.

The research note landed on September 18. That grade holds even after Metaplanet cut its executive option pool twice in the past month.

What a Digital Asset Treasury Company Is

A digital asset treasury company is a public company whose main business is holding crypto on its balance sheet. Metaplanet is a Tokyo-listed one holding 43,000 Bitcoin (BTC). It funds those purchases by issuing new shares, alongside debt and preferred stock.

Issuing new shares means the pie gets cut into more slices. The slice gets smaller. That is dilution.

Where Executive Pay Comes In

The bigger the pool, the more of the company’s value goes to management instead of shareholders.

Where Metaplanet’s Option Pool Came From

Once Metaplanet adopted its Bitcoin strategy in April 2024, it began issuing equity to fund purchases, alongside debt and preferred stock. Only the share sales diluted holders, and the clause tracked those.

Each one, therefore, cut shareholders’ stake and enlarged the executive pool in the same move.

Metaplanet’s share count climbed from 153.9 million to roughly 1.35 billion in two years. The pool grew with it, from 46 million shares to 319.5 million.

The Result for Shareholders

Shareholders were diluted to buy Bitcoin. Management’s claim grew alongside that dilution.

Until the recent cuts, VanEck estimates Metaplanet passed roughly 80% of the Bitcoin it bought through to shareholders. Management dilution absorbed the other fifth.

No committee decided this. A formula did it automatically, which is why VanEck singles the company out.

Not everyone reads the pool as excessive. David Bailey, chief executive of Nakamoto, defended its scale.

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What VanEck Actually Measured

VanEck took the 10 biggest treasury companies and asked four questions.