Meta agrees to issue non-voting shares to keep Zuckerberg in California amid proposed wealth tax
Meta will create a new class of non-voting stock that Zuckerberg can sell to cover a potential billionaire wealth tax, in exchange for his commitment to remain a California resident for eight years.
Meta announced plans to issue a new class of non-voting Class C common shares in January 2027, allowing CEO Mark Zuckerberg to sell a portion of the stock to fund a possible wealth-tax liability while retaining voting control of the company. The arrangement is tied to Zuckerberg’s agreement to stay in California, where Meta’s headquarters and its Superintelligence Labs are located, for at least eight years.
Under the deal, Zuckerberg can immediately sell 20% of the newly issued Class C shares, representing about 10% of his overall economic interest in Meta, which could help him meet any tax bill arising from Proposition 40, a ballot initiative that would impose a one-time 5% tax on the net worth of California-resident billionaires as of Jan. 1, 2026.
"We created this new class of shares with the purpose of creating a publicly traded non-voting stock usable for capital raising, employee compensation, acquisitions, other general corporate purposes while preserving the voting power of existing Class A and B shareholders," CFO Susan Li said during Meta’s third-quarter earnings call.
A special committee of independent directors unanimously recommended the new share class, citing the need to finance growth and keep Zuckerberg’s leadership in place. The California Legislative Analyst’s Office estimated that while the wealth tax could generate tens of billions of dollars over several years, potential departures of some billionaires might reduce state income-tax revenue by less than $1 billion annually.