Meta Chief Executive, Mark Zuckerberg considered leaving California over fears that a proposed ballot measure targeting the state’s ultra-wealthy could erode his voting control over the tech giant, a recent regulatory filing revealed.
However, Meta’s board of directors reached an agreement to keep the 42-year-old executive in the state. The tension stems from Proposition 40, a California ballot measure proposing a one-time 5% tax on the assets of state residents with a net worth over $1 billion to help fund healthcare services.
While Zuckerberg’s net worth exceeds $200 billion, his wealth is heavily concentrated in Meta stock. Although he holds roughly 13% of the company’s total equity, his ownership of Class B shares grants him over 60% of Meta’s voting power through a dual-class share structure.
Because Zuckerberg earns an annual salary of just $1, paying a potential $12 billion tax bill under Proposition 40 would force him to sell a significant portion of his stock. Under Meta’s existing setup, selling Class B shares would convert them to standard voting shares, diluting his voting majority and stripping him of absolute control over the company.
To address his concerns, Zuckerberg informed Meta’s board in September of his intention to list his Palo Alto home, prompting directors to form a special committee. On Wednesday, Meta announced the creation of a new Class C stock class with no voting rights.
Under the newly approved terms, Zuckerberg can sell or transfer up to 20% of his Class C stock allotment to cover potential tax liabilities without sacrificing his majority voting stake.
In the filing, Meta emphasized that Zuckerberg’s leadership and continued presence at the company’s Menlo Park headquarters remain essential for driving shareholder value. Meta Chief Financial Officer Susan Li noted during the company’s third-quarter earnings call that the non-voting stock structure preserves founder-led management while providing financial flexibility for investments in artificial intelligence and corporate growth.
California voters are set to decide the fate of Proposition 40 on November 3. While business leaders and opponents have poured over $300 million into campaigns against the measure, supporters led by the Service Employees International Union-United Healthcare Workers West, estimate the tax could raise up to $100 billion from roughly 200 California billionaires.