Zuckerberg’s Wealth Tax Concerns Shaped Meta’s Stock Overhaul

Meta Platforms’ decision to revamp its stock structure was shaped by factors including expectations that the company could have to raise hundreds of billions of dollars in coming years and concerns that a proposed wealth tax in its home state of California could prompt Chief Executive Mark Zuckerberg to move away, according to a regulatory filing.

Under the restructuring, announced Wednesday along with quarterly earnings, Meta is creating a that it said will enable it to raise capital for AI investments while preserving CEO Mark Zuckerberg’s more than 60% voting control.

Meta currently has Class A shares with one vote each and Class B shares with 10 votes each, which are predominantly held by Zuckerberg-controlled entities. Meta plans to distribute one of the new, Class C shares for each outstanding Class A and B share through a one-time stock dividend, which will give Zuckerberg shares that he can sell without reducing his voting control.

A special committee of Meta’s board began reviewing the share structure early this year, according to the 109-page Securities and Exchange Commission filing. One consideration was Meta’s need for capital: Meta management presented the board in May with three scenarios for its business, each of which would require Meta to raise “hundreds of billions of dollars over a period of several years beginning as early as fall 2026,” the filing said.

The special committee highlighted the need to secure capital “before competitors saturate various funding options,” the filing said, citing how recent and planned capital raises by companies including Google-parent Alphabet, SpaceX, Anthropic and OpenAI have “resulted in an increasingly challenging environment for raising capital.”

Zuckerberg told the special committee he wouldn’t support any equity financing that diluted his voting control, the filing said. He also expressed concern about Proposition 40, a proposed wealth tax that is on the California ballot in next month’s election, saying it could prompt him to leave California because paying the tax bill could require him to sell down his supervoting shares.

The prospect of Zuckerberg leaving the state seemed to have added urgency to negotiations over the recapitalization plan. At a September dinner with board members, he threatened to put his Palo Alto home up for sale amid an impasse between Zuckerberg and the special committee. He separately said a public listing would draw attention from employees and raise concerns about the company’s management.

By the following week, an agreement on the stock plan was reached, and Zuckerberg’s legal representative told the committee that he intended to remain in California or wherever Meta has its headquarters. The special committee felt it was imperative for Zuckerberg to be in close proximity to the company’s AI lab, Meta Superintelligence Labs, to support the efforts on the ground, per the filing.