Mark Zuckerberg's creative plan to pay California’s proposed billionaire tax without losing control of Meta

Key Points:

• Meta has introduced a new class of non-voting stock, Class C common stock, effective January, allowing shareholders ownership without voting rights, primarily to maintain Mark Zuckerberg's control while raising capital and funding acquisitions like AI development.
• The New York Times reports that this new stock class also enables Zuckerberg to sell shares to pay for California’s proposed Proposition 40, a one-time 5% wealth tax on billionaires, without losing his voting control in the company.
• Proposition 40 aims to tax several hundred California billionaires, potentially raising $100 billion over five years for healthcare, food assistance, and education, but has faced strong opposition from Silicon Valley leaders including Sergey Brin.
• Meta’s SEC filings reveal Zuckerberg pressured the board to create a plan to shield him from the tax, threatening to sell his Palo Alto home if no agreement was reached, leading to the stock dividend plan that preserves his majority voting power.
• The new Class C shares will be distributed as a one-time stock dividend, allowing Zuckerberg to sell up to 20% of these shares (10% of his total stake) to cover potential tax liabilities while retaining control, reflecting the company's intent to keep him leading from California.