Meta’s agreement would give CEO Mark Zuckerberg a limited way to sell newly issued nonvoting shares without matching those sales with voting stock, while requiring him to live where the company has its headquarters during an eight-year term.
Meta’s board declared a one-time dividend of one Class C share for each outstanding Class A and Class B share. The new class would carry no votes, and Meta said the distribution would leave shareholders’ voting power unchanged. The dividend depends on a charter change scheduled to take effect Jan. 19, 2027; Meta has not set its record or payment date, and a Nasdaq listing would require approval.
Under an agreement dated Oct. 20, 2026, 20% of the Class C shares Zuckerberg and his associated holder group receive would be exempt from a rule that generally pairs sales with the sale or conversion of voting shares. Meta’s filing says that portion represents 10% of Zuckerberg’s overall economic stake. For each qualifying quarter in which he meets the leadership condition, another 2.5% of his original Class C allocation would be released from the restriction. The remaining restricted shares would be released after 32 qualifying quarters.
The eight-year residence term applies while Zuckerberg continues to meet the leadership condition. It requires him to live in California or another jurisdiction where Meta maintains its headquarters, with an exception for material unforeseen circumstances that make living elsewhere prudent or advisable. Meta’s special committee said it considered his continued leadership important and cited his work near Meta Superintelligence Labs, as well as management difficulties when he was away from the team during the COVID-19 pandemic.
The agreement comes as California voters prepare to decide Proposition 40 on Nov. 3, 2026. The state’s official voter guide describes a one-time tax of up to 5% for certain taxpayers with covered assets valued above $1 billion; real property and some pension and retirement accounts are excluded. The California Legislative Analyst’s Office identifies Jan. 1, 2026, as the residency cutoff, while the initiative text sets the asset valuation date at Dec. 31, 2026.
Payment would be due in 2027; choosing installments over five years would increase the amount owed. The voter guide allocates 90% of revenue to health care and 10% to food assistance or education-related programs.
Meta says the new share class could also support capital raising, acquisitions and employee compensation as the company invests in artificial intelligence. The next scheduled decision is the Proposition 40 vote; the dividend remains conditional on the charter change taking effect in January 2027.
