Meta creates non-voting Class C shares to help Mark Zuckerberg meet potential California wealth tax

Meta announced the issuance of a new non-voting Class C share that will be granted to all existing shareholders on a one-for-one basis. The move is intended to give founder-CEO Mark Zuckerberg a mechanism to raise cash without diluting his voting power, which stems from his ownership of Class B shares that carry ten votes each. Under the arrangement, Zuckerberg could sell up to 20% of the new shares – equivalent to about 10% of his overall economic stake – to satisfy any liability that might arise from California Proposition 40, a wealth-tax proposal.

Zuckerberg currently owns roughly 13% of Meta’s equity but controls about 61% of its voting rights, according to a recent SEC filing. A sale of his Class B shares would convert them into one-vote Class A shares, reducing his control, which the board sought to avoid.

The board’s independent committee noted that the wealth-tax scenario was a primary reason for proposing the new share class, stating it would “require him to sell shares, or at least borrow against them.” Zuckerberg argued that ownership and control need not align, citing precedents at other companies where founders retain voting control despite modest economic stakes.

Chief financial officer Susan Li said the new class “will provide Meta the ability to finance its growth and help the company remain a leader among fierce competition both domestic and international,” adding that it “maintains our founder-led structure” and expands funding tools for AI-driven initiatives. The agreement also commits Zuckerberg to remain in California, or near Meta’s headquarters, for eight years, barring unforeseen circumstances.