Meta agrees to issue new shares to help Mark Zuckerberg meet potential California billionaire tax

Meta announced on Wednesday that it will issue a new class of non-voting shares to its chief executive, Mark Zuckerberg, allowing him to sell the shares to meet a potential tax liability if California adopts a one-off billionaire tax. In exchange, Zuckerberg has agreed to remain a resident of California, or wherever Meta’s headquarters are located, for the next eight years.

The proposed tax, known as Proposition 40, would impose a 5% levy on the state’s roughly 250 billionaires. Zuckerberg, whose net worth is estimated at $239 billion, said he had considered relocating his primary residence because the measure could create a multibillion-dollar bill.

Under the plan, Meta will conduct a two-for-one stock split, creating class C shares that carry no voting rights. This structure is intended to let Zuckerberg raise cash without diluting his control of the company.

"Every society is taxed. The only question is who will pay," Congressman Rohit Khanna wrote in the Guardian, adding that the debate pits working-class interests against those of the ultra-wealthy.

Polling shows Proposition 40 has not yet secured a majority, and several tech billionaires, including Sergey Brin, Peter Thiel and Eric Schmidt, have funded opposition to the measure.

Meta also reported a 26% increase in quarterly revenue to $64.6 billion, beating forecasts, while profit fell 37% to $13 billion after a $9.9 billion charge linked to a child-protection lawsuit. The company disclosed a headcount of 66,775 employees as of the end of September, a 15% reduction from the previous year. A New Mexico judge ordered Meta to pay $25 billion in a separate case involving alleged misrepresentations about user-data handling.