MENLO PARK, Calif. (Diya TV) — Meta has agreed to let CEO Mark Zuckerberg sell some newly created nonvoting shares to help cover a potential California wealth-tax bill. In return, he committed to remain in California—or wherever Meta maintains its headquarters—for eight years, provided he continues in a full-time leadership role.
The agreement, signed Oct. 20, followed Zuckerberg’s warning to Meta’s board that he was considering moving his primary residence out of California if voters approve Proposition 40 on Nov. 3. The measure would impose a one-time tax equal to 5% of the net worth of billionaires who lived in California on Jan. 1, 2026. The tax would come due in 2027; taxpayers could spread payments over five years at additional cost. Moving now would not by itself remove someone from the proposal’s residency test.
Meta plans to create Class C common stock, which carries no voting rights, effective Jan. 19, 2027. The company will distribute one Class C share for each existing Class A or Class B share, an arrangement Meta describes as effectively a two-for-one stock split. Class A shares carry one vote each; Class B shares carry 10.
Zuckerberg can immediately sell 20% of the Class C shares he and related holders receive. The other 80% face restrictions: generally, selling those shares requires the group to sell or convert an equivalent number of voting shares. Each quarter Zuckerberg remains in a full-time executive or executive-chair role, another 2.5% of his original Class C allotment becomes unrestricted. After 32 qualifying quarters, the entire allotment can be sold without those restrictions.
That structure lets Zuckerberg raise cash without immediately giving up voting power. Meta’s filing says he held 60.6% of the company’s voting power as of the record date. The filing also says his Class B shares gave him the ability to approve the restructuring on behalf of shareholders; Meta did not require a separate vote by Class A holders.
Meta’s board framed the plan as both a financing tool and a way to retain Zuckerberg. A special committee of independent directors backed the restructuring, saying the new shares could support capital raises, acquisitions and employee compensation without diluting existing shareholders’ voting power. The company also cited the scale of its planned artificial-intelligence investments.
Those costs are substantial: Meta spent $34.91 billion on capital expenditures in the third quarter and forecast $135 billion to $145 billion for 2026. The company said it expects to keep investing aggressively in AI next year.
Proposition 40’s outcome remains uncertain. California’s official voter guide says 90% of the measure’s revenue would go to health care, with the rest allocated to education, food assistance and administration. The guide also warns that competing ballot measures could block Proposition 40 if they receive more “yes” votes.
Meta estimates Zuckerberg’s net worth at about $240 billion, Reuters reported. The proposed tax and Meta’s share plan remain separate matters: voters will decide whether the tax takes effect, while the company’s new stock structure is scheduled to begin in January.
