Asset manager VanEck has given a negative rating to Metaplanet's executive compensation structure. Although the Japanese company recently reduced its potential equity reserve by 41%, its executive exposure still far exceeds the average of other corporate treasury firms focused on digital assets.
VanEck's analysis of the structure of Metaplanet
Renowned fund manager VanEck has harshly criticized Metaplanet's compensation structure, giving it a "Poor" rating in its recent report on the top ten digital asset treasury firms. According to data published by the research firm, the Japanese company's stock plan represents 14,7% of its fully diluted shares, while executives' direct exposure stands at 8,2%.
These figures stand in stark contrast to the corporate sector average. VanEck points out that Metaplanet executives' exposure is roughly ten times higher than the 0,8% average observed in the other nine large companies analyzed in the report. Furthermore, its global stock plan is almost four times the average of its competitors, raising concerns about the alignment of interests between senior management and minority shareholders.
The mechanics of dilution and the 41% reduction
The current controversy stems from a previous compensation mechanism that allowed for the automatic expansion of the company's option fund. Each time Metaplanet issued new shares to finance the acquisition of crypto assets, this system caused the management fund to grow proportionally. As a result, the reserve added hundreds of millions of potential shares to the market, diluting the value for existing investors.
In response to shareholder complaints about this dilution, Metaplanet decided to eliminate the automatic adjustment mechanism and applied a 41% cut to its total fund. However, VanEck analysts believe these corrective measures remain insufficient, as much of the dilution has already materialized in the market unless past concessions are revoked.
Metaplanet and its market position
Despite criticism of its corporate governance, Metaplanet maintains a relevant position in the global crypto ecosystem by continuing its aggressive strategy of accumulating Bitcoin on its corporate balance sheet.
The debate generated by VanEck underscores the growing demand for transparency and rigor in the corporate governance of entities that adopt Bitcoin treasuries, where the balance between incentivizing leadership and protecting shareholders is crucial for their financial sustainability.
Investing in cryptoassets is not fully regulated, may not be suitable for retail investors due to high volatility and there is a risk of losing all invested amounts.
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