How will Meta’s new Class C shares help Zuckerberg pay a potential wealth tax while retaining control?

Meta’s arrangement lets Zuckerberg immediately sell 20% of the Class C shares he receives, equal to 10% of his overall economic stake in the company. The shares are non-voting, so the sale would let him raise funds without losing voting control.

Why does Meta say it needs to keep Mark Zuckerberg in a leadership role in California?

A special committee of Meta’s board said Zuckerberg’s continued leadership and management from the company’s California headquarters were critically important amid what Meta described as unprecedented industry challenges and competition driven by AI.

Meta strikes deal to keep Zuckerberg in California after wealth tax concerns

Q: What does California Proposition 40 propose, and how could it affect Mark Zuckerberg?

The ballot measure asks voters to approve a one-time 5% tax on the state’s billionaires. Zuckerberg told Meta he was considering moving his primary residence outside California because the proposal could create a large tax liability and potentially force him to sell voting shares.

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Summary

Meta Platforms struck a deal with Mark Zuckerberg to keep him living in California after he warned he might leave if voters approve Proposition 40 next month. The agreement gives him non-voting shares he can sell to cover a potential tax bill and requires him to remain a resident of California, or wherever Meta is headquartered, for eight years. Meta said it will issue the new Class C shares in January 2027 and cited the importance of Zuckerberg’s leadership during competition driven by AI.

Key Facts

Proposition 40 would impose a one-time 5% tax on California billionaires if approved by voters.
Zuckerberg can immediately sell 20% of the Class C shares he receives, representing 10% of his overall economic stake in Meta, without losing voting control.
Meta’s long-term forecasts said it may need to raise hundreds of billions of dollars over several years, beginning as early as fall 2026, to finance its AI-related growth plan.
The state is home to as many as 250 billionaires whose combined wealth exceeds $2 trillion.
Meta said the new non-voting Class C common stock would also help fund acquisitions and retain top talent.

By Reuters

Published Oct 22, 2026 11:20 am KST

Mark Zuckerberg, CEO of Meta, stands outside the West Wing of the White House, Washington, D.C., Sept. 29. EPA-Yonhap

Meta Platforms has struck a deal with Mark Zuckerberg to keep him living in California after the CEO warned he was considering leaving the state that houses the company's headquarters if voters pass a wealth tax proposal next month.

Under the deal, Zuckerberg will get non-voting shares he can sell to potentially foot a multi-billion-dollar tax bill in the event the proposal is approved, in exchange for a commitment to remain a resident of California, or wherever Meta maintains its headquarters, for eight years, Meta said on Wednesday.

Zuckerberg, the world's sixth richest person according to Forbes, told Meta he was considering moving his primary residence outside California because Proposition 40, a ballot measure dubbed the "California wealth tax," could expose him to a massive tax liability, potentially forcing him to sell voting shares to pay it.

Proposition 40, which asks Californians whether to impose a one-time 5% tax on the state's billionaires, is far from certain to pass, political analysts say. The state is home to as many as 250 billionaires collectively worth upwards of $2 trillion.

Zuckerberg, who has a net worth of about $240 billion, can immediately sell 20% of the Class C shares he receives, representing 10% of his overall economic stake in the company, allowing him to pay a potential tax bill without losing voting control.

The company said on Wednesday it will issue a new class of non-voting Class C common stock in January 2027, effectively resulting in a two-for-one split, to fund acquisitions and retain top talent while maintaining Zuckerberg's control.

Meta's long-term forecasts, as described in the filing, showed it would need to raise "hundreds of billions of dollars" over several years, beginning as early as fall 2026, as it expects to need capital to finance its AI-related growth plan.

The parent of Facebook and Instagram said a special committee of its board concluded it was "critically important" that Zuckerberg remain in a leadership role and continue to manage the company from its California headquarters, particularly during what it described as "unprecedented challenge and competition in our industry" driven by AI.

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