Mark Zuckerberg's California wealth tax deal, explained

Meta 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’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 is headquartered, for at least eight years.

Meta said the new stock class is primarily aimed at financing its aggressive AI 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’s Class A shareholders didn’t vote on the change because Zuckerberg can unilaterally approve it.