Meta creates non-voting shares that could help Zuckerberg pay proposed California tax

Meta has approved a new class of non-voting shares that could let CEO Mark Zuckerberg sell stock to pay a proposed California wealth tax without giving up his voting control. The plan is conditional on voters approving the measure.

Called Class C common stock, the shares carry an ownership stake but no vote on company decisions. Meta says they will take effect in January and may be used for fundraising, employee compensation and acquisitions, including its investment in artificial intelligence. Zuckerberg controls around 60% of Meta’s voting power.

The company’s filing says shareholders would receive one Class C share for each Class A or Class B share they hold, in a one-time dividend that Meta says would amount to a two-for-one stock split. The dividend would not change any shareholder’s voting power. Zuckerberg could sell or transfer up to 20% of the Class C shares he receives, equal to 10% of his overall economic stake, to cover potential tax liability under Proposition 40.

The proposed measure would impose a one-time 5% tax on the net worth of several hundred billionaires who primarily live in California. Supporters say it could raise up to $100 billion over five years, mostly for healthcare, with the remainder for food assistance and education. The New York Times reported that Zuckerberg discussed the proposal with Meta board members and sought a plan to address it. Meta referred TechCrunch to an earnings statement saying the committee considered it important for Zuckerberg to continue leading the company from California.