Meta Platforms has announced a new Class C share structure that will allow CEO Mark Zuckerberg to maintain voting control of the social media giant while giving the company greater flexibility to raise capital, fund acquisitions and compensate employees as it ramps up spending on artificial intelligence. According to a report by Fortune, the move, disclosed alongside Meta’s third-quarter earnings, comes after months of intense negotiations between Zuckerberg and a special committee of board members over how to balance shareholder interests with the founder’s desire to retain control of the company he founded in 2004. The new structure will see every existing Class A and Class B share receive one non-voting Class C share, effectively creating a two-for-one stock split.
Why Meta is creating a new share class
Meta has a dual-class structure in which Class A shares trade on Nasdaq with one vote each, while Zuckerberg’s holdings are mostly Class B shares with ten votes each. He holds about 60.6 percent of the voting power but only about 13.4 percent of the economic stake. If he sells Class B shares, they convert to Class A, which could erode his control.Issuing more Class A stock for employee pay, acquisitions or fundraising dilutes his voting share. Meta has long offset that with buybacks, which helped lift his voting power from 53.7 percent in 2013 to 60.6 percent now. But buybacks use cash that Meta wants for its AI build-out. Fortune says the company repurchased $26.3 billion of Class A stock in 2025, has not bought back shares for four straight quarters, and booked $21 billion in stock-based compensation in the first nine months of this year.The Class C shares carry no votes, so Meta can use them for pay, deals and capital raising without affecting Zuckerberg’s control. He can also sell some without giving up votes: 20 percent of his new Class C shares can be sold immediately, and the remaining 80 percent are “stapled,” meaning he can sell them only if he sells or converts an equal number of voting shares. Zuckerberg will still be able to elect all the directors and decide most shareholder votes.
The California wealth tax
A looming California wealth tax played a central role. According to a Meta filing with the Securities and Exchange Commission, Zuckerberg wanted to keep voting control, meet his pledges to fund the Chan Zuckerberg Initiative with Meta stock, and be ready to pay billions to the state if voters approve the proposed tax. Proposition 40 is on the ballot on November 3. The Bloomberg Billionaires Index lists Zuckerberg at No. 5, with a net worth of $246 billion.In July, Zuckerberg told Robert Kimmitt, Meta’s lead independent director, that selling Class B shares to cover a tax bill could cut his voting stake to about 53 percent. The new Class C shares let him pay such a bill without touching his voting shares.
Months of tense negotiations
Fortune says the plan followed months of negotiations that were sometimes contentious between Zuckerberg and a board committee that included DoorDash CEO Tony Xu, Kimmitt and former Microsoft executive Charles Songhurst. Xu disclosed his friendship with Zuckerberg but said it would not affect his judgment. The committee proposed shareholder-friendly sunset provisions that would convert Class B shares to regular stock within a year of Zuckerberg’s death or departure, or if he sold more than half his holdings. According to the filing, he refused to consider any change to his voting shares and told the committee he was “considering establishing residence outside of California.”The filing also shows that on August 4 he proposed a dividend of 20 Class C shares for every Class A and B share and that he would not accept sunsets or equity financing that diluted his control. The committee called the 20-for-1 idea excessive. By late August, with all sides dug in, committee members discussed dissolving the panel or resigning. At a September 9 board dinner, Zuckerberg told directors he planned to list his Palo Alto home for sale on September 13. The committee wanted him to stay in California, close to Meta’s AI lab.
Final deal gives Mark Zuckerberg new flexibility
The eventual agreement reached in September represented a compromise between management and independent directors.Under the plan, shareholders will receive one Class C share for every Class A or Class B share they own. The new Class C stock will carry no voting rights but can be used by Meta for employee compensation, acquisitions and future capital raising without diluting Zuckerberg’s voting influence.The arrangement also allows Zuckerberg to immediately sell 20% of his Class C shares without affecting his voting control. The remaining Class C shares are linked, or “stapled”, to corresponding voting shares and can only be sold alongside equivalent Class A or Class B stock.As part of the agreement, Zuckerberg dropped a proposal seeking a founder-style compensation package and agreed to continue taking a symbolic annual salary of $1. He also committed to remaining in California or wherever Meta is headquartered for the next eight years.
Trading to begin in January 2027
Meta’s board formally approved the recapitalisation in October, and the company said the new Class C shares will become effective on January 19, 2027. Chief Financial Officer Susan Li said trading in the new stock class is expected to begin in late January.Speaking on Meta’s earnings call, Li said the company currently has no specific financing plans tied to the new shares but wanted to ensure it had access to a broader range of funding options as it navigates an era of heavy AI-related investment.“We thought it was prudent to establish the appropriate capital structure framework to ensure that we have access to a diverse pool of funding sources,” Li said.