Meta chief executive officer Mark Zuckerberg could sell part of his stake in the technology company to pay a proposed billionaire tax in California without surrendering his control of the social media giant.
The New York Times reported that Meta developed a new class of non-voting shares partly to give Zuckerberg a way to meet his potential tax obligations if California voters approve the proposed levy.
The strategy would allow the Facebook founder to raise billions of dollars by selling shares while retaining his majority voting control over Meta, which owns Facebook, Instagram and WhatsApp.
Meta disclosed during its earnings call on Wednesday that its board had approved a new class of shares, known as Class C common stock, which carries ownership rights but no voting power. The company plans to introduce the shares in January and use them for fundraising, employee compensation and acquisitions, including investments in artificial intelligence.
The arrangement would preserve Meta’s existing voting structure, under which Zuckerberg controls approximately 60 per cent of the company’s voting power.
The move highlights how technology billionaires can use corporate share structures to manage personal tax exposure without necessarily weakening their grip on the companies they lead. While ordinary shareholders may have to sell assets or use cash to meet a tax bill, Zuckerberg’s position at Meta could allow him to unlock the value of his holdings while retaining control over the company’s strategic direction.
How Meta’s share plan would work
According to a recent filing with the United States Securities and Exchange Commission, Meta’s new arrangement would distribute one Class C share for every existing Class A or Class B share held by shareholders.
The company describes the distribution as a one-time stock dividend that would effectively operate like a two-for-one stock split. Meta said the arrangement would not change any shareholder’s voting power.
The filing specifically states that the distribution would allow Zuckerberg to sell or transfer up to 20 per cent of the Class C shares he receives, representing 10 per cent of his overall economic stake in Meta, to meet potential tax liabilities under the proposed California measure.
Because the new shares would carry no voting rights, Zuckerberg could sell the permitted portion without surrendering the voting power attached to his existing shares.
The New York Times also reported that Zuckerberg pressed Meta’s board to develop a strategy to protect him from the proposed tax. According to the newspaper, he told board members in September that he could put his Palo Alto property up for sale if they failed to reach an agreement, potentially triggering significant media attention.
The newspaper’s report drew partly on Meta’s SEC filing, which documented discussions about the proposed tax and its influence on the decision to establish the new share class.
The filing indicated that Zuckerberg began discussing the measure with board members in July, with further conversations taking place during July and August.
When a source sought comment, Meta referred to a statement in its recent earnings release explaining that the company’s special committee wanted Zuckerberg to continue leading the business from California.
The company said his continued presence in the state would help him coordinate closely with management and remain near Meta Superintelligence Labs, its artificial intelligence research operation.
Proposed tax targets California billionaires
The proposed Proposition 40 would introduce a one-time wealth tax of five per cent on the net worth of several hundred billionaires who primarily reside in California.
Berkeley tax law professors drafted the measure, which is sponsored by SEIU United Healthcare Workers West, a major healthcare union in the state.
Supporters estimate that the proposal could raise as much as $100bn over five years. They intend to direct most of the proceeds towards healthcare, with the remainder supporting food assistance and education programmes.
Estimates suggest Zuckerberg could face a tax bill of up to $11bn if the measure becomes law, although his final liability would depend on the proposal’s implementation and the assessment of his taxable wealth.
The proposed levy has triggered strong opposition from prominent technology investors and business leaders, who argue that a substantial wealth tax could encourage wealthy residents to relocate and move capital out of California.
Google co-founder Sergey Brin has actively campaigned against the measure, committing significant resources to efforts to defeat it. Other business figures have also criticised the proposal, warning that it could undermine the state’s economic competitiveness.
Tax debate raises questions about wealth and corporate control
Meta’s proposed share arrangement adds another dimension to the dispute, showing how a tax designed to reach billionaire wealth could prompt companies to reconsider the financial structures surrounding their founders.
For California, the central question is whether the proposed tax can generate significant public revenue without encouraging wealthy residents and investors to move their assets elsewhere.
For Meta shareholders, the issue is different: the company must balance its need to retain Zuckerberg’s leadership with the interests of investors who may question whether corporate decisions also serve the founder’s personal financial needs.
The new share class does not, by itself, establish that Zuckerberg will sell shares or that the proposed tax will take effect. Its significance lies in providing a potential route for him to raise cash without giving up voting control.
Democratic US Representative Ro Khanna, who supports the proposed tax, welcomed reports of Meta’s strategy in a post on X.
“Looks like billionaires will stay and figure out a way to pay the tax,” Khanna wrote, adding that the measure could help provide healthcare for poor children in California.
Ultimately, the proposal tests whether California can make its wealthiest residents contribute more towards public services while keeping the state attractive to the businesses, investment and talent that underpin its technology industry. Meta’s plan suggests that, if voters approve the tax, at least some of the affected billionaires may seek financial solutions that preserve both their wealth and their corporate influence.
