Meta Platforms, Inc. has approved a significant capital structure change involving a new class of non-voting stock and a stock dividend, along with a binding agreement with founder Mark Zuckerberg to align his economic interests with those of shareholders.
The Board of Directors, acting on the recommendation of a special committee of independent directors, approved an amendment and restatement of the company’s charter to establish a new class of non-voting Class C common stock. The amendment was subsequently approved by shareholders via written consent on October 20, 2026. The company expects to file the Restated Charter with the Secretary of State of Delaware on or about October 21, 2026, with an effective date of January 19, 2027.
In connection with this recapitalization, the Board declared a one-time stock dividend of one share of Class C common stock for each outstanding share of Class A and Class B common stock. The dividend is contingent upon the effectiveness of the Restated Charter. The record date and payment date for the dividend will be established by the Board at a later date; however, under the terms of the agreement, the payment date will be no later than the fifth business day following the effective date.
On October 20, 2026, Meta entered into a Founder Alignment Agreement with Mark Zuckerberg. The agreement limits the ability of Zuckerberg and his permitted transferees (the “Holder Group”) to sell shares of the new Class C stock without a corresponding reduction in his voting power. Under the agreement, 20% of the shares of Class C stock received by the Holder Group will be freely saleable, while the remaining 80% will be subject to transfer restrictions. To sell these restricted shares, the Holder Group must sell an equivalent number of Class A or Class B shares, or convert Class B shares to Class A shares, or apply accrued credits.
The agreement includes a release schedule for the restricted shares, releasing 2.5% of the restricted shares held by the Holder Group each calendar quarter, provided Zuckerberg remains on the executive team or as executive chair of the Board. All remaining restricted shares will be released upon the Holder Group no longer holding any Class B shares. Additionally, Zuckerberg has committed to remain a resident of California or another jurisdiction where Meta maintains its headquarters for eight years following the agreement’s date.
The agreement also establishes conditions for potential future dividends of Class C stock. The Board has agreed to declare an additional dividend of Class C stock at a 1:1 ratio for each outstanding share of Class A, Class B, and Class C stock if two conditions are met: the 30-day volume-weighted average price of Class C stock reaches a doubling of the Class A price on September 10, 2026, and the compound annualized shareholder return is no less than 10%.
