Meta sets up non-voting Class C shares as Zuckerberg keeps voting control

Meta Platforms is setting up a new class of shares that carry no votes, a step that lets it bring in money and pay staff while Mark Zuckerberg keeps his grip on the company. Meta announced the plan on Wednesday, according to CNA.

Why Meta wants more equity

Meta said the investment needed to compete in artificial intelligence is "unprecedented." For 2026, capital spending is projected at between $135 billion and $145 billion, reflecting the company's push to construct data centers, purchase chips and grow its computing infrastructure. Raising money through borrowing at such a scale can hurt credit ratings, the company observed, and that makes issuing equity the more appealing route.

Investors have penalised firms that took on extra debt to fund their AI expansion, said Dennis Dick, a chief market strategist with Stock Trader Network, citing how Oracle and CoreWeave shares have fared. "This is a better way to raise capital while keeping the balance sheet strong," he said.

How the new shares work

The new publicly traded stock is called Class C. Meta will hand out one Class C share for every existing Class A and Class B share, effectively a two-for-one split. Meta's filing says management would like the stock to be available by late 2026 at the earliest, yet trading is expected to start in January 2027.

The filing says the Class C stock can be used for raising capital, paying employees, acquisitions and other corporate purposes. From time to time, the company anticipates issuing additional shares.

Through his Class B shares, which carry super-voting rights, Zuckerberg holds control of the company. Because Class C stock has no vote, Meta can sell it to investors or use it for deals and pay without significantly reducing his voting power. Meta's special committee said keeping Zuckerberg in the lead was a key objective, and that he would not back a significant equity financing that cut his voting control.

Sunset clauses put forward by the committee would have converted his Class B stock to Class A upon events like his death or disability, his departure from the company, or a sharp fall in his equity. Zuckerberg indicated he would not support those provisions or any move that would cost him voting control.

What Zuckerberg receives

His beneficial holdings as of October 1, 2026 were roughly 341.2 million Class B shares plus 1.2 million Class A shares, which corresponds to a 13.4 per cent ownership stake and approximately 60.6 per cent of the voting power. In return he is due approximately 342.4 million Class C shares.

A separate Founder Alignment Agreement allows just 20 per cent of the Class C stock going to the "Holder Group" (Zuckerberg and some people he may transfer shares to) to be sold freely from the outset. The rest face restrictions meant to stop him cashing in his stake without a matching cut in voting influence.

A tax angle and a Google precedent

California's Proposition 40, a wealth tax proposed for the November 2026 ballot, is addressed in the filing. Billionaires who lived in California on January 1, 2026 would face a single levy equal to 5 per cent of their net worth. Because of the potentially multibillion-dollar tax bill, Zuckerberg informed the special committee that he was weighing a move away from the state, according to Meta. The Class C structure would let him sell some non-voting shares without immediately lowering his voting control.

Some other founder-led companies use a similar structure, most notably Alphabet. In April 2012 Google unveiled a dividend of non-voting Class C stock, which prompted a shareholder class action in Delaware, and a settlement won court approval in October 2013. Over the first year, Class C holders were to be compensated by Google should the shares trade more than 1 per cent below the price of Class A. Google paid out the dividend on April 2, 2014, and then concluded in 2015 that it owed Class C holders an adjustment payment of $522 million.

The board of Meta maintained that the stake Zuckerberg already holds adequately ties his interests to those of shareholders, so extra cash pay or equity awards are not justified, a stance it said it has kept for years.