Meta Platforms has unveiled a new class of non-voting stock designed to let CEO Mark Zuckerberg sell shares without diluting his grip on the company as California voters prepare to decide on a one-time 5% wealth tax on billionaires. Under the plan disclosed in a regulatory filing, every shareholder will receive one Class C share for each share held.
Zuckerberg, who owns about 13% of Meta Platforms's value but controls roughly 61% of its votes through high-vote Class B shares, will be able to sell up to 20% of his new shares immediately. This frees him from capital to cover a potential multibillion-dollar tax bill while preserving his majority control.
The proposal is tied to Proposition 40, which appears on the November 3 ballot and would tax the worldwide net worth of Californians worth over $1 billion. Zuckerberg, whose net worth is estimated at $225 billion, has committed to remaining in California, or wherever Meta Platforms is headquartered, for at least eight years.
Meta Platforms said the new stock class is primarily aimed at financing its aggressive artificial intelligence spending, which management forecasts could require hundreds of billions of dollars in coming years. The company argued the structure preserves its founder-led model while expanding funding tools.
Meta Platforms's Class A shareholders didn't vote on the change because Zuckerberg can unilaterally approve it. Financial analysts believe this corporate restructuring sets a unique precedent for tech billionaires facing mounting state and federal tax pressures in the United States.
Market observers will closely monitor how Proposition 40 affects the broader economic landscape and corporate relocations in California.