Meta Creates Non-Voting Stock Class to Help Mark Zuckerberg Manage Proposed California Billionaire Tax

Image: TechCrunch · Source

Meta has introduced a new class of non-voting stock to enable CEO Mark Zuckerberg to pay California's proposed billionaire wealth tax without relinquishing voting control of the company.

Meta has announced the creation of a new class of non-voting stock, termed Class C common stock, as revealed during the company’s recent earnings call. These shares confer economic ownership but do not grant voting rights, allowing the firm to raise capital, compensate employees, and execute acquisitions while preserving the voting dominance of founder and CEO Mark Zuckerberg, who holds approximately 60% of Meta’s voting power.

According to a report by The New York Times and supporting SEC filings, a significant motivation for this new stock class is to help Zuckerberg address California’s proposed "billionaire tax" should Proposition 40 be enacted. This one-time 5% wealth tax targets several hundred billionaires residing primarily in California, aiming to generate upwards of $100 billion to fund healthcare, food assistance, and education.

Meta’s new Class C stock will be distributed as a one-time dividend to shareholders at a one-to-one ratio with existing Class A and B shares, resulting in what Meta describes as a two-for-one stock split. Crucially, this dividend will not dilute any shareholder’s voting power.

The structural design allows Zuckerberg to sell or transfer up to 20% of his Class C shares—equivalent to 10% of his total economic stake—without affecting his majority control. Selling these non-voting shares would provide liquidity to cover his estimated tax liability, which could be as high as $11 billion, while maintaining his decision-making authority over Meta.

The company’s SEC filing details Zuckerberg’s concerns over the tax dating back to July, and subsequent board discussions led to the procedural development of this stock plan. Reports indicate Zuckerberg emphasized the importance of remaining in California to closely collaborate with Meta’s management and its Superintelligence Labs.

California’s Proposition 40, backed by healthcare unions, has stirred controversy, with prominent tech figures like Google co-founder Sergey Brin campaigning against it, citing risks of economic fallout. Yet Meta’s structural innovation highlights how major tech executives might navigate the financial implications of such tax measures.

Democratic U.S. Representative Ro Khanna, a supporter of the tax, commented that the approach shows billionaires will find ways to comply, ultimately benefiting public services such as healthcare for California’s underserved populations.