Meta approves nonvoting shares as Zuckerberg commits to remain in California

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

California voters will decide Proposition 40 on Nov. 3. The measure would impose a one-time 5% tax on the wealth of state residents worth more than $1 billion. Zuckerberg had told Meta that he was considering moving his primary residence outside California because the proposal could leave him owing billions of dollars and force him to sell voting shares, the filing said.

Under the plan, shareholders will receive one Class C share for every Class A or Class B share they own, effectively creating a two-for-one stock split. The Class C shares carry an ownership interest but no voting rights. Zuckerberg may immediately sell or transfer up to 20% of the Class C shares he receives, including to cover any liability under Proposition 40, without affecting his majority voting control.

In return, Zuckerberg committed to remain a California resident for eight years, unless unforeseen circumstances make a move prudent or Meta relocates its headquarters, in which case he would move to the company’s new home state.

Meta said the new share class also supports other corporate needs, including raising capital for artificial-intelligence infrastructure, employee compensation and acquisitions. The Class C shares are expected to take effect in January.