Meta’s plan to create nonvoting Class C shares is designed to give CEO Mark Zuckerberg a route to sell part of his economic stake while retaining majority voting control, according to company filings.
The filings detail terms that expand on an earlier outline of Meta’s share plan. Zuckerberg told a special committee he had considered moving his primary residence out of California. The filing estimates Proposition 40 could result in a tax bill of several billion dollars for him, based in part on his Meta holdings.
The California Legislative Analyst’s Office says the proposed measure would impose a one-time 5% tax on billionaires who were California residents on Jan. 1, 2026. Zuckerberg’s agreement requires him to live in California or wherever Meta is headquartered for eight years while he remains in a full-time leadership role. It allows an exception for material unforeseen circumstances.
As of Oct. 1, 2026, Zuckerberg held 60.6% of Meta’s voting power and 13.4% of its economic interest. Under the agreement, 20% of the Class C shares he receives would become available for sale once distributed. The remaining 80% would generally be subject to a linked-sale condition: for each restricted Class C share sold, his group must also sell a Class A or Class B share, convert a Class B share to Class A, or use accrued credits.
A separate service provision releases 2.5% of his total Class C allotment for each qualifying quarter of full-time service on Meta’s executive team or as executive chair, up to 32 qualifying quarters. The quarters do not have to be consecutive, but a quarter without the required service does not count.
Meta says the new share class could help it raise capital, make acquisitions and compensate employees. The company also warns Class C shares could trade below Class A shares and that issuing more shares for financing could dilute existing shareholders. The filing notes Zuckerberg cited other companies where founders retained voting control despite having smaller economic stakes.
Meta’s board approved and recommended a charter amendment to create the new class. Shareholders approved it by written consent on Oct. 20. The amendment is scheduled to take effect Jan. 19, 2027. The board also declared a one-time dividend of one Class C share for each outstanding Class A and Class B share, contingent on the amendment taking effect. The record and payment dates have not been set, and distribution must occur no later than the fifth business day after the charter takes effect. California voters are scheduled to decide Proposition 40 on Nov. 3.
