Meta’s Chief Executive Mark Zuckerberg has wielded enormous power over the social media empire he built more than two decades ago, leading the California juggernaut through major scandals, scrutiny and technological shifts.
But the 42-year-old tech mogul considered leaving the state because he feared that a ballot measure to impose a one-time 5% tax on the assets of California billionaires could reduce the amount of control he has over Meta, a recent regulatory filing shows. Meta’s board struck a deal so he would stay in California. Meta is the parent company of Facebook, Instagram and WhatsApp.
The filing highlights how one of the world’s wealthiest people, whose net worth totals more than $200 billion, is bracing for the possibility that California voters pass Proposition 40, a wealth tax proposal that would primarily be used to fund healthcare.
Although supporters say the fear that billionaires will flee the state are overblown, the ultrawealthy have made moves to potentially avoid paying the tax or are funding campaigns to defeat it.
Read more: Your guide to Proposition 40: California's billionaire tax proposal
Zuckerberg’s influence over Meta is partly tied to how the company structures its stock. Zuckerberg holds roughly 60% of voting power over Meta even though he only owns about 13% of the company’s total shares.
Meta has a dual-class share structure, dividing the stock into Class A shares with one vote each and Class B shares with 10 votes each. Zuckerberg holds a large amount of Class B stock, which gives him majority control over company decisions.
If the wealth tax proposal passes, Zuckerberg is worried that it could reduce his voting power, according to the filing. The tech executive makes an annual salary of $1, so most of his wealth is linked to his stake in Meta. If he had to sell his Class B shares to pay the tax, that would reduce his voting majority in the company, according to the filing.
In September, he told Meta’s board that he planned to list his Palo Alto home for sale, pressuring board members to find a solution.
On Wednesday, Meta announced a new class of stock with no voting rights called Class C that would take effect in January. As part of the deal, Zuckerberg could sell or transfer up to 20% of Class C stock so his voting majority doesn’t decrease even if he has to pay the tax.
“Mr. Zuckerberg’s continued leadership role in our Company, and his continuing presence at the Company’s headquarters in California, is critical at this current inflection point for the Company and the tech industry in order to continue to provide value-maximization for all shareholders,” the filing said.
Since the company’s public debut, its share price has risen more than 1,700%, outperforming the S&P 500.
In Meta’s third-quarter earnings call Wednesday, Chief Financial Officer Susan Li said creating a new class of nonvoting stock benefits the company in various ways, including “capital raising, employee compensation, acquisitions, other general corporate purposes.”
“We believe this share class will maintain our founder-led structure. It will expand our funding tools and give us flexibility to invest behind the unprecedented momentum we’re seeing across every part of our business driven by AI,” she said.
Meta has roughly 66,700 workers globally. Its sprawling headquarters is in Menlo Park.
Some billionaires such as Anduril co-founder Palmer Luckey, Ripple co-founder Chris Larsen and Google co-founder Sergey Brin have opposed the wealth tax proposal. Nvidia CEO Jensen Huang, on the other hand, has said he doesn’t mind paying more taxes.
The Service Employees International Union-United Healthcare Workers West is backing the wealth tax proposal and says it applies to roughly 200 billionaires who have resided in California as of January 1, 2026, and could raise $100 billion.
More than $300 million has been contributed to fight the billionaire tax, including two propositions that could block it if they gather more votes. Although stock prices fluctuate, Zuckerberg could face a tax liability of roughly $12 billion based on his net worth.
In 2015, Zuckerberg and his wife, Dr. Priscilla Chan, pledged to give away 99% of his Facebook shares over their lifetimes when they celebrated the birth of their first daughter.
The couple created the Chan Zuckerberg Initiative, a philanthropic organization whose efforts include curing, managing and preventing all diseases. Although Zuckerberg lives in Palo Alto, he also owns real estate elsewhere, including in Hawaii, Washington, D.C. and Ireland.
Times data journalist Gabrielle LaMarr LeMee contributed to this report.
This story originally appeared in Los Angeles Times.
This article originally appeared on LA Times at https://finance.yahoo.com/technology/articles/meta-struck-deal-keep-mark-204441885.html