Meta creates non-voting stock that would let Zuckerberg pay California's proposed billionaire tax
Tech company Meta has approved a new class of non-voting shares that would let founder Mark Zuckerberg sell stock without losing control. The New York Times reports it is also tied to a billionaire tax proposed in California.
Meta, the social media company led by founder and CEO Mark Zuckerberg, announced during its earnings call on Wednesday that its board has approved a new class of common stock, Class C. The shares give holders an ownership stake but no vote. The class takes effect in January. The New York Times reports that one reason is a billionaire tax proposed in California, which voters may approve.
What Meta said
The company says it will use the new shares to raise capital, pay employees and fund acquisitions, including its costly push into artificial intelligence. The current voting structure, under which Zuckerberg holds about 60% of the vote, will remain.
According to Meta's filing with the U.S. Securities and Exchange Commission, shareholders will receive one Class C share for each Class A or Class B share they own. Meta calls this a one-time stock dividend, equivalent to a two-for-one split, and says it will not change any shareholder's voting power. Zuckerberg will be able to sell or transfer immediately up to 20% of the Class C shares he receives, equal to 10% of his total economic stake, including to pay a potential tax under the proposal, without losing majority voting control.
Proposition 40
California's Proposition 40 was drafted by Berkeley tax law professors and is sponsored by the state's largest healthcare union, SEIU United Healthcare Workers West. It would impose a one-time 5% tax on the net worth of several hundred billionaires who mainly live in the state. Backers estimate it could raise up to $100 billion over five years, mostly for healthcare, with the rest for food assistance and education. Zuckerberg's bill is estimated at up to $11 billion.
The Times also reports that Zuckerberg told board members in September that if no agreement was reached, he would list his Palo Alto property for sale. Meta's filing says he discussed the tax with directors from July. The company said its special committee believed it was important for him to keep leading Meta from California, close to management and to Meta Superintelligence Labs, its AI unit.
Google co-founder Sergey Brin has campaigned against the measure. Democratic U.S. Representative Ro Khanna, who supports it, wrote on X that billionaires will stay and find a way to pay.
