Meta creates nonvoting shares as Zuckerberg agrees to remain in California

Meta’s board has approved a new class of nonvoting stock that CEO Mark Zuckerberg could sell to cover a potential California wealth-tax bill without reducing his voting control of the company, according to a regulatory filing.

Zuckerberg told Meta he was considering moving his primary residence out of California because Proposition 40, due before voters on Nov. 3, could leave him owing billions of dollars. The proposal would impose a one-time 5% tax on billionaire wealth. Meta said a move by Zuckerberg—and steps such as listing his California home—would become public and could create questions for company management.

Under the board-approved arrangement, Meta will distribute new Class C shares to existing shareholders through a stock dividend, effectively producing a two-for-one stock split. The Class C shares will carry no voting rights, allowing Zuckerberg to sell them to raise cash while preserving the control provided by his super-voting Class B holdings.

In return, Zuckerberg has committed to remain a California resident for eight years. If Meta relocates its headquarters to another state during that period, he will move to that jurisdiction, the filing said.

Meta said the new share class is also intended to give the company greater flexibility to raise capital, including for artificial-intelligence infrastructure, without relying on stock buybacks to offset dilution. Zuckerberg currently controls about 60.6% of Meta’s voting power while owning roughly 13.4% of the company.