Zuckerberg’s tax problem, Meta’s share fix
Each time Meta’s stock doubles, and compounds at least 10% a year along the way, every shareholder gets one free Class C share for each share they own. Meta’s stock has already risen more than 1,700% since its IPO, against about 495% for the S&P 500, and the board wants that kind of run to continue. Meta has set a bar for Mark Zuckerberg that the company itself calls “extraordinary. The condition is written into a Founder Alignment Agreement between Meta and its CEO, which also sets terms for how he sells his new shares and his service at the company.
Zuckerberg controls about 61% of Meta’s votes through super-voting stock. The new Class C shares carry no voting rights, and that is by design. The new class lets him sell without loosening that grip.
The yardstick is $580.60, Meta’s share price on September 10. In pre-split terms, the first payout kicks in once the stock’s 30-day average price crosses just over $1,161, which would put Meta’s market value close to $3 trillion. The next comes at around $2,322, and the pattern repeats with every doubling after that. That takes effect on January 19, 2027, and works much like a two-for-one stock split. The rejig traces back to Proposition 40, a California ballot measure proposing a one-time 5% tax on residents worth more than $1 billion. Zuckerberg, the world’s fifth-richest person at roughly $247 billion, had considered leaving the state over it. Zuckerberg first pitched a 20-for-1 dividend, which the committee rejected as excessive.
Meta worried that steps like listing his home for sale could prompt employees to question the company’s leadership, according to the filing. This sits on top of the one-for-one Class C dividend Meta has already declared. A special committee of the board then negotiated with him, in talks the filing calls “protracted and, at several points, contentious. The final deal ties him to California for eight years while he leads Meta, barring material unforeseen circumstances, and gives him enough sellable stock to cover the tax.