Meta's board has approved a new class of non-voting stock designed to help fund the company's artificial intelligence buildout, a structure that lets the social media giant raise equity at scale without diluting CEO Mark Zuckerberg's voting control, according to an SEC filing.

Under the plan, approved on Oct. 19, every holder of Meta's Class A and Class B shares will receive one new Class C share for each share they own. The company disclosed the plan on Wednesday alongside its third-quarter results, with the Class C shares coming into existence on Jan. 19, 2027. The one-for-one dividend functions as a two-for-one stock split and, Meta says, will not change anyone's voting power.

Zuckerberg held about 60.6% of Meta's voting power against a 13.4% economic interest as of Oct. 1, according to the information statement Meta filed with the SEC. The gap stems from the dual-class setup, in which Class A shares carry one vote each and Class B shares carry 10; Zuckerberg beneficially owns about 341 million Class B shares. Multi-class setups of this kind are a staple among founder-led U.S. technology companies, which have used them to tap public equity markets while keeping decision-making concentrated with insiders. Because Class C shares generally carry no vote, Meta can sell them for cash — or use them as pay and acquisition currency — without shrinking his control.

Why Meta says it needs the structure

The filing lays out the rationale. Advisers at Moelis told the board's special committee that could raise roughly $700 billion in equity over several years before Zuckerberg's voting power fell below 50%, according to the filing. Management also told the advisers that its long-term forecasts showed a need to raise "hundreds of billions of dollars" over several years, starting as early as fall 2026.

CFO Susan Li framed the language differently on a follow-up call with analysts, calling the "hundreds of billions" figure "a theoretical maximum" computed to determine what level of equity financing would trigger a loss of founder control. It is "not actually a description of our present equity financing needs or plans," she said, adding that Meta does not have "anything to announce on that front."

Read together, the two disclosures quantify how much equity Meta could raise before its founder loses control — not how much it intends to. The structure itself is approved, while the size and timing of any equity sale remain undisclosed.

Guardrails on Zuckerberg's stake

Under a Founder Alignment Agreement signed Oct. 20 — a day after the board approved the share class — only 20% of the Class C shares Zuckerberg receives can be sold freely. Selling any of the remaining 80% generally requires him to sell or convert a matching Class A or Class B share within two business days, a mechanism that trims his voting power. In practice, that means most of the new stake cannot be turned into cash without chipping away at the same voting position the Class C structure is designed to protect.

The agreement also commits Zuckerberg to remain a California resident, or to live wherever Meta is headquartered, for eight years. The filing says California's Proposition 40, a wealth tax on the Nov. 3 ballot, could make him liable for a multi-billion dollar payment, and that Zuckerberg stated that selling Class B shares to cover it could cut his voting interest to about 53%.

Performance-based dividends and caveats

The board has also agreed to pay another one-for-one Class C dividend each time the 30-day volume-weighted average price of Class C reaches a successive doubling of the $580.60 Class A price from Sept. 10, adjusted for splits, as long as shareholder returns compound at 10% or more per year.

Class C shares are identical to Class A and Class B except for voting rights, but the filing warns they will likely trade at some discount to Class A, and that Meta may need to issue more of them for any equity sale. Class C also will not count as "voting stock" under Section 368(a) of the tax code, meaning sellers who want to defer taxes on a transaction may push for a different structure.

As of the filing, Meta's board had not set the record or payment dates for the dividend. The payment must come within five business days after the charter takes effect on Jan. 19, 2027. From here, the markers to watch are the setting of those dates, any disclosure on the size and timing of an equity sale, the Nov. 3 vote on Proposition 40, and how Class C trades against Class A once the new shares come into existence in January.