VanEck has rated Metaplanet "Bad" on executive compensation practices, making it the only company among the 10 largest digital asset treasuries to receive that grade. The assessment, released on September 18, found that Metaplanet fails all four of VanEck's evaluation tests, a rating that persists even after the company reduced its executive option pool twice in recent weeks.
What Is a Digital Asset Treasury Company
A digital asset treasury company is a publicly traded firm whose primary business involves holding cryptocurrency on its balance sheet. Metaplanet, listed in Tokyo, holds 43,000 Bitcoin and funds these purchases by issuing new shares alongside debt and preferred stock.
When companies issue new shares, existing shareholders' ownership stakes become diluted. The fundamental arrangement shareholders accept is that the company acquires enough Bitcoin to ensure each remaining share remains more valuable than before the dilution.
How Executive Options Create Shareholder Dilution
Companies compensate executives partly through stock options, which grant the right to purchase company shares at a fixed price. If the share price rises, the option gains value. These options are drawn from a pool, and a pool representing 2% of the company means executives could eventually claim 2% of all shares. The larger the pool, the more company value flows to management rather than shareholders.
Metaplanet's option pool originated from a rescue plan approved by shareholders in February 2023, when the company was a struggling hotel operator. Seven staff members received options over 46 million shares at a ¥10 strike price. Critically, the plan contained a clause that reset the award to 20% of every share the company could issue.
Once Metaplanet adopted its Bitcoin strategy in April 2024 and began issuing equity for purchases, the clause automatically enlarged the executive pool with each share sale. The company's share count grew from 153.9 million to roughly 1.35 billion over two years, while the option pool expanded from 46 million shares to 319.5 million. A formula rather than shareholder decisions drove this automatic growth.
VanEck's Assessment Methodology
VanEck examined the 10 largest treasury companies against four criteria:
- The size of the option pool relative to fully diluted shares
- The percentage held by named executives
- Whether the pool can grow without shareholder approval
- Whether the largest awards include performance requirements
Metaplanet's option pool represents 14.7% of shares compared to a 4.0% peer average. Named executives hold 8.2% against 0.8% at peer companies. On pool size, Metaplanet's exposure is roughly four times the peer level; on executive exposure, ten times higher.
Metaplanet failed all four tests. Shareholders never voted on the pool's growth or two 2026 amendments, and awards require only continued employment with no performance conditions. The other nine companies in the comparison passed the assessment, with Strategy, BitMine, and four others earning good marks.
Recent Board Actions
Under shareholder pressure, the board made two moves. On August 18, it repealed the evergreen dilution clause, though the pool remained at its enlarged size. On September 11, the board rolled terms back to their state before a September 2025 share sale, cutting the pool by 41% to 188.2 million shares.
However, 82.8 million shares had already reached insiders under the old terms. Roughly 105.4 million potential new shares remain, approximately 7% of the company. VanEck stated that the current level remains substantially worse than any peer company, maintaining its "Bad" rating.
VanEck identified four changes that could improve the rating: cancelling roughly 273 million shares created by the clause, adopting a smaller stockholder-approved plan, tying compensation to Bitcoin per share, and implementing a written grant-timing policy.
