Meta Class C stock could help CEO Mark Zuckerberg pay a potential $11 billion California wealth tax without surrendering voting control. The plan, approved by Meta’s board, creates nonvoting shares that Zuckerberg could sell if voters approve Proposition 40.
The arrangement emerged during Meta’s third-quarter earnings announcement on Oct. 21. According to The New York Times, Zuckerberg had urged directors to address the potential tax burden while preserving his control.
The company’s earnings announcement describes the new shares as a way to finance AI investments, acquisitions and employee compensation. The structure also maintains Zuckerberg’s majority voting power, currently estimated at around 60%.
How Meta Class C Stock Protects Zuckerberg’s Control
Meta will distribute one Class C share for every existing Class A or Class B share. The dividend will effectively create a two-for-one stock split without changing shareholders’ voting rights.
The new share class takes effect Jan. 19, 2027. Zuckerberg can immediately sell or transfer up to 20% of his allocated Class C shares, equivalent to 10% of his overall economic stake.
Those sales could provide money for a potential tax payment while preserving his voting majority. Meta’s regulatory disclosures document the arrangement, which is available through the SEC’s filing system.
According to The Associated Press, Zuckerberg also agreed to remain in California for eight years, subject to exceptions for unforeseen circumstances.
The approach illustrates how technology founders can separate economic ownership from corporate voting power. A similar distinction appears in Anthropic’s proposed founder-control structure ahead of its potential public listing.
California’s Billionaire Tax Faces November Vote
Proposition 40 would impose a one-time 5% wealth tax on qualifying California billionaires. The measure targets residents whose net worth exceeds $1 billion and will appear on the Nov. 3 ballot.
Supporters estimate the proposal could generate approximately $100 billion over five years. Most proceeds would fund healthcare, with smaller allocations for food assistance and education.
Economist Emmanuel Saez helped develop the proposal alongside other tax experts. The San Francisco Chronicle examined his involvement and the measure’s intended role in addressing healthcare funding shortages.
Opponents argue the tax could encourage wealthy residents to leave California, potentially reducing future tax revenue. Google co-founder Sergey Brin has contributed heavily to efforts opposing the measure, according to Politico’s reporting.
The proposal has also generated discussion among technology entrepreneurs, including Paul Graham and Jay Kreps, as Silicon Valley debates its potential economic consequences.
Democratic Rep. Ro Khanna, who supports the measure, offered a different interpretation of Meta’s arrangement. In a post on X, he argued that Zuckerberg’s plan showed billionaires could remain in California while meeting their tax obligations.
Meta’s new stock structure does not eliminate Zuckerberg’s potential liability. It provides a mechanism to raise funds without reducing his voting control. Whether he needs to use it will depend on the election outcome and any subsequent legal developments.
