Meta board backs nonvoting Class C stock effective January
Meta's board approved a nonvoting Class C stock taking effect in January, intended for capital raising, employee pay and acquisitions while preserving Zuckerberg's voting control.
The story in focus
Meta's board approved a new nonvoting Class C common stock, effective in January, to be used for capital raising, employee compensation and acquisitions while keeping Mark Zuckerberg's roughly 60% voting control, TechCrunch reported, citing an SEC filing and New York Times reporting.
- The board approved nonvoting Class C common stock taking effect in January.
- Shareholders would receive one Class C share per Class A or Class B share held.
- Meta says the one-time dividend will not change any shareholder's voting power.
What Meta approved
Meta's board approved a new class of nonvoting Class C common stock that takes effect in January, TechCrunch reported. The company disclosed the plan during its earnings call on Wednesday and described it in a recent SEC filing.
Meta says it will use the stock for capital raising, employee pay and acquisitions, including its push into AI, while maintaining a voting structure that favors founder and CEO Mark Zuckerberg, who controls about 60% of the vote. Under the plan, shareholders would receive one Class C share for each Class A or Class B share they own, which Meta calls a one-time stock dividend and expects to work out to a two-for-one stock split. The dividend will not change any shareholder's voting power, according to Meta.
The Proposition 40 link
The New York Times reported another rationale: helping Zuckerberg cover California's proposed billionaire tax if voters approve it. The proposal, Proposition 40, would impose a one-time 5% wealth tax on the net worth of several hundred California billionaires who primarily live in the state. Backers say it could generate as much as $100 billion over five years, mostly for healthcare, with the rest for food assistance and education.
The SEC filing says the dividend will let Zuckerberg immediately sell or transfer up to 20% of the Class C shares he receives, equal to 10% of his overall economic stake, for any reason, including to pay potential liability under Proposition 40 without affecting his majority voting control. The Times reported, citing the filing, that Zuckerberg discussed the tax with directors from July through August. TechCrunch did not independently verify that reporting.
Meta referred TechCrunch to a statement from its earnings release in which a special committee said it was important for Zuckerberg to keep leading the company from California, including to stay near Meta Superintelligence Labs.
Tax estimate and reaction
TechCrunch cited an estimate that Zuckerberg could owe as much as $11 billion under the tax. Proposition 40 has drawn opposition from some Silicon Valley figures, and Representative Ro Khanna, a supporter, said on X that billionaires would stay and find a way to pay.
How much of his Class C stock could Zuckerberg sell under the plan?
The filing says he could sell or transfer up to 20% of the Class C shares he receives in the dividend, equal to 10% of his overall economic stake, without affecting his majority voting control.
Sources & further reading
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