Zuckerberg Pledges Eight Years in California or Meta's Headquarters State

Meta’s planned nonvoting share distribution is tied to an eight-year residency pledge from CEO Mark Zuckerberg, who can live in California or the state where Meta is headquartered.

The agreement allows an exception for material unforeseen circumstances and gives Zuckerberg a way to sell part of his economic stake without reducing his voting control. The arrangement follows his consideration of moving his primary residence out of California in response to Proposition 40, a proposed tax on billionaires.

Meta will issue one Class C share for each Class A or Class B share. The company’s amended charter is expected to take effect Jan. 19, 2027, and the dividend is due no later than five business days afterward. Meta plans to list Class C shares on Nasdaq. The terms build on Meta’s earlier Class C plan and set conditions for Zuckerberg’s sales.

Zuckerberg may immediately sell 20% of the Class C shares he receives, equal to 10% of his overall economic stake. The remaining 80% are restricted. For each restricted Class C share he sells, he must, within two business days, sell one Class A or Class B share or convert one Class B share into Class A.

The restriction will be lifted in stages, beginning with the first full quarter after the dividend is distributed. For each quarter in which Zuckerberg works full time as an executive or executive chairman, 2.5 percentage points of the overall Class C allocation will be released. After 32 qualifying quarters, or eight years, the restrictions end, allowing him to sell up to half of his economic stake through Class C shares without reducing voting control.

Meta’s stock classes carry different voting rights: Class A shares have one vote each, Class B shares have 10 and Class C shares have none. As of Oct. 1, Zuckerberg held about 341 million Class B shares and 1.22 million Class A shares, representing 60.6% of Meta’s voting power and 13.4% of its economic interests. The gap reflects the extra votes attached to Class B shares.

Proposition 40 is set for California’s Nov. 3 ballot. It would impose a one-time 5% tax on net assets for people with more than $1 billion who lived in California on Jan. 1, 2026. Payments would be due in 2027, with an option to spread them over five years for an additional fee.

Zuckerberg told Meta’s special board committee that he had considered moving his primary residence out of California because of the proposed tax. Voters will decide on Proposition 40 on Nov. 3.