Meta designs nonvoting shares to shield Zuckerberg’s power as California debates billionaire tax
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Meta says its board approved nonvoting Class C shares that Mark Zuckerberg can sell if California voters pass Proposition 40, a proposed one-time 5% wealth tax on billionaires, while he agrees to stay a state resident for eight years.
Meta disclosed that its board has authorized a new class of nonvoting common stock that CEO Mark Zuckerberg can sell to raise cash if California voters approve Proposition 40, a one-time 5% wealth tax on billionaires. The filing said Zuckerberg had been "evaluating relocating his primary residence outside California" and that any move would attract employee scrutiny and raise management questions.
Rather than force Zuckerberg to sell voting shares and potentially weaken his grip on the company, Meta created the nonvoting Class C shares effective January. In exchange, Zuckerberg agreed to remain a California resident for eight years, and to relocate only if Meta moves its headquarters to another state.
Meta said keeping Zuckerberg close to its Menlo Park headquarters is "critically important" for the company’s performance during an era of fierce industry competition. The new shares are also meant to help finance Meta’s artificial-intelligence infrastructure, employee compensation, acquisitions and other corporate needs.
Analysts pointed out that the nonvoting structure lets the company raise capital for AI investments without diluting Zuckerberg’s voting power, preserving the concentration of control that has long defined Meta’s governance.