Meta sets up nonvoting Class C shares and ties Zuckerberg to California

Meta disclosed in an SEC filing that its board will create a nonvoting Class C stock, with one new share issued for each existing Class A or Class B share in January 2027, which works out to a two-for-one split in effect. The company says the shares are meant to raise equity, pay employees and fund acquisitions without diluting voting control. The filings also describe a Founder Alignment Agreement under which Mark Zuckerberg commits to stay a California resident, or resident of any state housing Meta's headquarters, for eight years while serving full-time. Zuckerberg's ability to sell Class C shares is restricted at first and loosens gradually, and the board committee estimated up to about $20 billion could become accessible to him to cover a possible California wealth-tax bill, though that depends on the share price at the time of sale.

1. Meta will create a new class of nonvoting Class C common stock, effective January 2027, with one share distributed per Class A or Class B share held.
2. Meta says the new class is intended for equity offerings, employee compensation and acquisitions, and to keep Zuckerberg leading the company.
3. Under the Founder Alignment Agreement, Zuckerberg agreed to remain a California resident, or resident where Meta is headquartered, for eight years.
4. Zuckerberg may initially sell 20% of his Class C allocation, with a further 2.5% unlocking each quarter while he remains in a full-time leadership role.
5. The board committee estimated up to about $20 billion could be accessible to Zuckerberg through the new structure, contingent on share price at sale.
6. Forbes reported that Zuckerberg's voting control could otherwise have fallen from about 60.6% to 53% had he been forced to sell Class B shares to meet a wealth tax.
7. The arrangement follows California's Proposition 40, a November ballot measure proposing a one-time tax of up to 5% on large covered assets.