Key facts
- Meta's board approved a new class of non-voting stock, Class C.
- The new stock class will be effective in January.
- Zuckerberg could use the new shares to pay California's proposed billionaire tax without losing voting control.
- Proposition 40 proposes a 5% wealth tax on hundreds of California billionaires.
- Backers estimate Proposition 40 could generate $100 billion over five years for healthcare, food assistance, and education.
Meta Platforms' board has approved a new class of non-voting stock, Class C, which will take effect in January. This move allows the company to raise capital, pay employees, and fund acquisitions, including its AI initiatives, while maintaining CEO Mark Zuckerberg's voting control. The New York Times reported that a primary motivation for this new stock class is to enable Zuckerberg to pay California's proposed "billionaire tax" without diminishing his voting power. Proposition 40, if approved by voters, would impose a one-time 5% wealth tax on hundreds of the state's wealthiest residents, potentially generating $100 billion over five years for healthcare and education. Zuckerberg had reportedly urged Meta's board to devise a strategy to shield him from the tax, even threatening to sell his Palo Alto property if a solution wasn't found. The new stock structure would allow him to sell up to 10% of his total economic stake without impacting his majority voting control.