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Meta issues new shares to keep Zuckerberg in California
The tech giant’s board approved a non‑voting stock class that lets the CEO sell up to 20% of new shares to cover a proposed one‑time 5% billionaire tax.
23 Oct 2026 0 reads Compiled with AI
Meta announced a new class of non‑voting shares (Class C) during its earnings call. The board approved the shares, giving one new share for every existing share, effectively a two‑for‑one split. The move came after Mark Zuckerberg threatened to leave California if a billionaire tax passed. The shares are intended for capital raising, employee compensation, acquisitions and AI investment.
How the new shares work
The new shares let Zuckerberg sell up to 20 % of the shares he receives, representing about 10 % of his total economic stake, without losing voting power. This could help him meet a one‑time 5 % wealth tax on billionaires in California. The tax would target residents with a net worth over $1 bn and could bill him as much as $11 bn. The measure, known as Proposition 40, could raise up to $100 bn over five years.
Zuckerberg said he was evaluating moving his primary residence out of California and that listing his home would attract scrutiny. Meta’s board agreed to a deal keeping him in the state for at least eight years, and will move if Meta relocates its headquarters. The arrangement shows the company’s desire to retain him near its Menlo Park headquarters.
The creation of Class C shares also aims to give Meta more capital for AI projects and acquisitions while preserving the founder‑led model. Meta said it would issue the shares to raise capital for AI infrastructure, compensate employees and make acquisitions, without diluting Zuckerberg’s voting power.
Proposition 40 has sparked debate among Silicon Valley leaders. Some oppose it, citing potential capital flight, while supporters say it will fund healthcare and education. The new stock structure shows that billionaires and companies are looking for ways to meet the tax if it passes.