Key takeaways
- Meta will give every current shareholder one Class C share per share held; the new shares carry no votes.
- Zuckerberg can sell 20% of his Class C shares immediately, while the other 80% is stapled to his voting shares, according to Fortune.
- Wired reports the stapled 80% can be sold in chunks over eight years as long as he stays in California; Fortune doesn't mention the eight years.
- Zuckerberg controls about 60.6% of Meta's votes with a 13.4% economic stake, and Class C lets Meta issue stock without diluting that control.
Meta said Wednesday, Oct. 21, that it will issue a new class of non-voting stock, Class C, as a one-for-one stock dividend to every existing shareholder. The twist is a separate agreement with Mark Zuckerberg that limits when he can sell his new shares, and it ties that to him staying in California. Voters decide Proposition 40, the proposed billionaire tax, on Nov. 3.
The mechanics are scattered across two long write-ups of a 109-page filing, so they’re pulled together below.
Class A shares get one vote each and trade on Nasdaq. Class B shares get 10 votes each, and Zuckerberg’s holdings are mostly Class B. The new Class C shares get no votes at all, according to Fortune and Wired.
That setup is why Zuckerberg controls about 60.6% of the votes while owning only about 13.4% of the company, per Fortune. His economic stake is a bit over an eighth of Meta. His voting power is well over half.
Yes. The dividend goes to all existing shareholders in proportion to what they hold, one Class C share for each share you own today. Because it’s proportional, nobody’s slice of the company changes on day one, and the new shares simply sit alongside what you already have.
How the Class C shares will trade, whether they’ll list, and how they’ll be taxed for retail holders aren’t yet reported.
How much can Zuckerberg sell, and when?
He can sell 20% of his Class C shares right away, partly to cover any wealth-tax bill. The other 80% is “stapled,” per Fortune: he can sell it only if he also sells or converts an equal number of voting shares. Wired agrees on the 20% but frames the rest differently.
Wired describes the same 80% a little differently. It says the shares can be sold in chunks over eight years, as long as he remains in California, and that selling early would require offloading some voting shares, unless material unforeseen circumstances make living elsewhere prudent. Fortune doesn’t mention the eight-year term, so treat it as Wired’s reporting. The two accounts may be describing the same terms from different angles, but neither outlet says so.
Wired also reports that the agreement, which Meta calls the Founder Alignment Agreement, requires him to stay wherever Meta keeps its headquarters. In theory, he and the company could move together to another state.
A worked example
Think of his Class C stake as ten equal blocks. Two blocks, the 20%, he can sell on day one with no strings. The other eight are the stapled 80%, and the rules for them depend on whether you read Fortune or Wired. The real share count isn’t in the reporting, so this is only an illustration.
- Day one: he can sell the two free blocks, no strings.
- Fortune’s version: to sell any of the other eight, he’d also have to sell or convert an equal number of voting shares. Class B shares turn into plain Class A when he sells them, and each one carries a tenth of the votes.
- Wired’s version: he could sell the eight in chunks over eight years while staying in California, without touching his voting stock.
The design makes the cheap path to cash the one that keeps him in the state. Giving up votes is the expensive path.
What it does to voting power
Class C stock lets Meta pay employees, fund acquisitions and raise capital without diluting Zuckerberg’s voting control. Issuing Class A for those jobs would hand out one-vote shares and shrink his percentage, which is the outcome the new structure is built to avoid and which Meta has been fighting for years.
Meta has long fought that dilution with buybacks of Class A. Fortune notes his voting share rose from 53.7% in 2013 to 60.6% now. Meta bought back $26.3 billion of Class A in 2025 but hasn’t repurchased shares in the last four quarters, and stock-based compensation ran $21 billion in the first nine months of 2026. Buybacks also burn cash the company wants for AI. A non-voting currency solves the dilution without the cash.
The tax is the other pressure. In July, per Fortune, Zuckerberg told lead independent director Robert Kimmitt that selling Class B shares to cover a wealth-tax bill could cut his voting stake to about 53%. A board special committee of Kimmitt, Charlie Songhurst and DoorDash CEO Tony Xu proposed sunset provisions that would convert Class B to regular stock within a year of his death or departure, or if he sold more than half his holdings. Zuckerberg refused to consider any change to his voting shares.
Fortune says the talks sometimes turned contentious and the committee at one point discussed resigning if there was no resolution. Zuckerberg told the committee he was, in the filing’s words, “considering establishing residence outside of California.”
Why it matters if you own Meta stock
Your votes don’t change, and they never counted for much against a 60.6% holder. What changes is the plumbing. Meta now has a way to issue stock to staff and deal partners that carries no say in how the company is run, and new shares of any class split future profits among more owners.
Governance is the real trade-off. The structure cements founder control and links his stock-sale rights to where he lives. Whether shareholders or proxy advisers push back isn’t yet known.
The business context hasn’t moved. Meta guided 2026 capital spending to $135 billion to $140 billion, and third-quarter free cash flow was negative $2.1 billion. Over 97% of revenue still comes from ads, per Business Insider. If you want to judge the hardware side of the bet yourself, the Meta Ray-Ban smart glasses are the line Meta says its Muse assistant is central to, and Muse is due on Meta’s glasses next month. Our Muse scorecard covers how the models stack up.
Founder stakes are in the news elsewhere too. Our piece on what Musk’s SpaceX share giveaway would cost him shows how small a percentage can look next to a huge valuation.
What’s still unknown about the deal
Start with the tax itself. Proposition 40 would impose a one-time 5% tax on billionaires’ stock and other assets held in California as of January 2026, and Wired says it could face lawsuits even if voters approve it. Wired also reports polling that suggests it will fail, despite roughly $129 million spent against it. How much Zuckerberg would owe, and how he would pay, hasn’t been reported.
The timeline is murky. Fortune puts his first warnings in July and early August, with a committee meeting and a proposal from Zuckerberg on Aug. 4. Its text cuts off there, so the response and final terms are incomplete in that account. Wired describes a Sept. 9 dinner where he told board members he was considering leaving and planned to list his Palo Alto home four days later, with the deal finalized about a week before the announcement. These may be separate episodes, and neither outlet reconciles them. Wired also cites an earlier Wall Street Journal report that he bought a home in Florida in February 2026.
Other gaps:
- Whether Zuckerberg’s lawyers’ request for a founder pay package, like those of other tech founders such as Elon Musk, was granted or dropped.
- Whether Meta could move its headquarters out of California, and whether that would satisfy the agreement.
- How the market will treat Class C shares, and whether buybacks resume.
Tools & products mentioned
- Meta Ray-Ban smart glasses on Amazon — Check current price
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Frequently asked questions
If you hold Meta stock when the dividend is paid, yes. Meta is issuing Class C as a one-for-one stock dividend to all existing shareholders, in proportion to their holdings. The record and payment dates are not yet reported.
No. Class C carries no votes. Class A has one vote per share and Class B has 10, and Zuckerberg's shares are mostly Class B.
How much voting control does Zuckerberg have?
About 60.6% of the votes, with an economic stake of about 13.4%, according to Fortune. His voting share was 53.7% in 2013.
Does Zuckerberg have to stay in California?
Wired reports that the agreement ties his ability to sell most of his Class C shares over eight years to staying in California, or wherever Meta's headquarters is. Fortune describes the 80% limit only as stapled to voting shares.
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Sources
This article was compiled from reporting by the following outlets. Links go to the original reports.
- Fortune: Zuckerberg told Meta directors he might leave California, where he could lose billions to a wealth tax. Meta answered with a new class of stock
- Wired: Mark Zuckerberg Agrees to Stay in California Despite Billionaires’ Tax Ballot Measure
- Business Insider: Meta CEO Mark Zuckerberg says Muse and Reality Labs are highly unprofitable — for now
- Engadget: Mark Zuckerberg says Meta is 'entering a new phase' with Muse
- The New York Times: How Mark Zuckerberg Pushed Meta to Shield Him From California’s Proposed Wealth Tax
