Metaplanet CEO Simon Gerovich Faces Backlash Over Executive Options as Stock Tumbles

Metaplanet CEO Simon Gerovich is facing growing shareholder criticism over an executive stock-option program that expanded as the Bitcoin treasury company issued new shares. The fallout has sent Metaplanet stock tumbling by nearly 17% since the start of the week.

Metaplanet’s option pool became a dilution flashpoint

The controversy centers on Metaplanet’s 10th Series Stock Acquisition Rights, a compensation program created in December 2022, before the company adopted its Bitcoin Treasury strategy. Rather than setting a fixed number of shares for executives, the program tied the potential award pool to 20% of Metaplanet’s fully diluted share count.

The distinction became significant after Metaplanet began aggressively raising capital to acquire Bitcoin in 2024. As the company issued additional shares, the number of shares covered by the executive options also increased. The pool grew from around 46 million shares to 319.46 million shares.

Metaplanet’s BTC holdings. Source: Bitcoin Treasuries

For the company’s shareholders, the problem was straightforward. Metaplanet’s equity raises diluted existing holders, while the mechanism increased the number of shares available under the executive incentive program.

Metaplanet itself acknowledged in its August 18 filing that the adjustment mechanism could amplify the dilution borne by existing shareholders. The company subsequently removed the adjustment provision and fixed the pool at 319.46 million potential shares.

Gerovich exercises 64 million shares

The controversy reached its zenith after Metaplanet CEO Simon Gerovich exercised 92,000 Series 10 rights on August 28. The exercise created 64.032 million new Metaplanet shares, taking his direct holdings from 15.56 million shares to 79.59 million. The newly acquired shares are subject to a lockup through August 17, 2031.

The timing drew scrutiny because the exercise came 10 days after Metaplanet amended the Series 10 program and froze the option pool at 319.46 million shares. 

Critics argue that freezing the pool does not address the underlying concern because the pool had already expanded by nearly 273 million potential shares. While Metaplanet’s amendment stopped further growth, it did not eliminate the additional rights that accumulated under the previous formula.

MMXX Ventures adds another layer to the dispute

Meanwhile, Gerovich’s relationship with MMXX Ventures, a Metaplanet shareholder, has come under heavy scrutiny. 

Gerovich confirmed that he is a significant but non-majority shareholder of MMXX’s parent company. The Metaplanet CEO added that he is not a director or an officer of MMXX and has no role to play in its investment and trading decisions.

The relationship has nevertheless raised governance questions because MMXX is a Metaplanet shareholder and Gerovich has an ownership interest in its parent company. 

Responding to the backlash, Gerovich noted that Metaplanet “had not done a good enough job” of explaining its compensation structure and corporate relationships. He disclosed that the company will continue reviewing its governance and compensation policies while promising clearer communication with shareholders.

Despite Gerovich’s admissions and promises, the dispute had an adverse effect on Metaplanet stock. Metaplanet shares fell by nearly 20% since the start of the week, including a jarring 9.9% drop over the last day. Since the start of the year, Metaplanet shares are down by over 40%, with several factors hurting the stock.