Zuckerberg Controls 61% of Meta Votes With 13% Stake as California Wealth Tax Looms

Zuckerberg Controls 61% of Meta Votes With 13% Stake as California Wealth Tax Looms

by | Oct 23, 2026 | News

Mark Zuckerberg owns about 13% of Meta Platforms but controls roughly 61% of its voting power, a gap detailed in a regulatory filing the company released on Wednesday. The disclosure, which coincided with Meta's third-quarter earnings report, shows the board approved a new class of non-voting stock designed in part to let Zuckerberg pay a potential California wealth tax without diluting his grip on the company he founded.

The arrangement matters because California voters will decide on November 3, 2026 whether to approve Proposition 40, a one-time 5% tax on the net worth of billionaires. For Zuckerberg, whose fortune is tied almost entirely to Meta stock, the measure created a problem: paying the bill by selling shares would have eroded the voting majority that gives him power to choose the full board and determine the outcome of almost any shareholder ballot.

How 13% ownership became 61% control

Meta runs a dual-class share structure. Class A shares carry one vote each, while Class B shares carry 10 votes each, and Zuckerberg holds mostly Class B stock. The result, according to the filing Meta released Wednesday, is that of every $100 of the company's value about $13 belongs to him, while of every 100 votes about 61 are his.

That structure is also why a wealth tax posed a control risk. The tax bills the economic stake, not the votes, and because Class B shares convert into one-vote Class A shares when sold, every sale to raise cash for the tax would have cut into his majority. The filing says Meta's board feared that loss of control, and Zuckerberg argued that ownership and control do not need to line up, citing other companies where small economic stakes still conveyed founder voting control.

Zuckerberg takes a salary of $1 a year, so nearly all of his wealth sits in his Meta stake. His net worth is currently about $225 billion, according to CNBC, making him the sixth-richest person in the world.

The Class C stock plan and the California wealth tax

Meta's answer is a new class of non-voting shares called Class C common stock, announced during the company's earnings call on Wednesday and set to take effect in January. The company will issue one Class C share for every Class A and Class B share outstanding, a one-time stock dividend it says works out to a two-for-one stock split. Meta says the dividend "will not change the voting power of any shareholder."

Because the new shares carry no votes, Zuckerberg could sell some of them to cover the California wealth tax without giving up any voting control. Under the agreement, he may immediately offload or transfer as much as 20% of the shares granted to him for any reason, including paying a potential liability under Proposition 40, without affecting his majority voting control.

The special committee first proposed in August a dividend of non-voting stock payable only if Proposition 40 became law and a tax payment by Zuckerberg came due, sized to cover his bill. Zuckerberg pushed for more, saying he did not want to repeat protracted negotiations if similar taxes were proposed in other jurisdictions. The final deal appears to stand even if the tax fails, and runs for eight years as long as he remains a California resident.

Relocation threats and the eight-year commitment

The filing describes months of negotiation. Zuckerberg was discussing the billionaire tax with board members as far back as July, and the topic returned in meetings and communications through August. In September he told the board he planned to list his Palo Alto home for sale, a step that pressured directors to find a solution, and he warned that preparations to establish residency outside California by mid-October would have to start by mid-September.

Zuckerberg told the company he was "evaluating relocating his primary residence outside California and that steps toward any such relocation, including any listing of his residential real estate in California on the market, would be public and inevitably noted and commented upon by company employees and, accordingly, raise questions for management of the company going forward," according to the filing.

In exchange for the stock plan, Zuckerberg committed to remaining a California resident for eight years, absent material unforeseen circumstances, and to move wherever Meta is headquartered if the company relocates. The negotiations with the special committee were described in the disclosure as robust and at several points contentious.

Why Meta's board wanted him to stay

Unlike billionaires who have already left California, Zuckerberg runs a company whose board wanted him in the building. The committee said in July it was crucial that he remain in close coordination with management and in close proximity to Meta Superintelligence Labs, the AI unit led by Alexandr Wang, and said it was mindful of difficulties the company faced during the COVID-19 pandemic when Zuckerberg could not be physically present.

"The Special Committee believes that Mr. Zuckerberg's talent and leadership have been crucial to our growth, strategy, and stability since our inception, and the Special Committee wants that to continue," the filing said. Meta also wrote that "it is critically important to keep Mr. Zuckerberg in a leadership position with our company and that he continue to reside in and manage the company from our headquarters in California to ensure his continued ability to effectively drive our performance during this era of unprecedented challenge and competition in our industry."

The filing also framed the tax in personal terms: "If the California wealth tax is enacted and Mr. Zuckerberg becomes liable for a tax payment, Mr. Zuckerberg would effectively be paying to serve as the Company's chief executive officer while residing in California," it said, noting his salary of only $1 each year.

AI spending, market reaction and the November vote

Meta has stressed that the new stock is not only about the tax. The company told Fortune the shares are mainly about financing its AI spending, and the filing says management forecasts pointed to a requirement to raise hundreds of billions of dollars across several years, starting as early as fall 2026. Chief Financial Officer Susan Li said on Wednesday's earnings call that the new class would help with capital raising, employee compensation, acquisitions and other corporate purposes, and Meta said Wednesday it plans to spend as much as $145 billion this year on AI projects.

"There were many driving factors that led the board and special committee to approve the Class C shares, and it would be misleading to attribute it to any single reason," Meta told CNBC in a statement. The filing acknowledges the new stock could substantially prolong the duration of Zuckerberg's voting control, and Class A shareholders did not vote on the change because Zuckerberg has the ability to unilaterally approve it. Andrew Rocco, a stock strategist at Zacks Investment Research, said, "Meta plans to issue nonvoting shares to fund AI investments without diluting CEO Mark Zuckerberg's control."

Meta's shares fell more than 7% after the announcements, wiping more than $100 billion off the company's market capitalisation. The disclosure landed as the fight over Proposition 40 intensifies: the measure, drafted by Berkeley tax law professors and sponsored by SEIU United Healthcare Workers West, would apply to several hundred California billionaires, and backers say it could generate as much as $100 billion over five years, mostly for healthcare. Estimates of Zuckerberg's potential bill range from roughly $10 billion to $12 billion.

The plan drew a quick political response. "Looks like billionaires will stay and figure out a way to pay the tax," Democratic U.S. Representative Ro Khanna, a vocal proponent of the measure, wrote on X after the news spread. More than $300 million has been contributed to fight the tax, and several tech billionaires, including Google co-founders Larry Page and Sergey Brin, have moved out of California ahead of the vote.

Conclusion

Meta's filing establishes that Zuckerberg holds about 13% of the company's shares but roughly 61% of its votes, and that the board created non-voting Class C stock partly so he can pay a potential California wealth tax without surrendering that control. In return, he committed to remain a California resident for eight years, barring material unforeseen circumstances. The next concrete step is the November 3, 2026 vote on Proposition 40, which will determine whether the one-time 5% tax on billionaire net worth becomes law and whether Zuckerberg's estimated $10 billion to $12 billion liability comes due.

Frequently Asked Questions

How does Mark Zuckerberg control 61% of Meta votes with only 13% of shares?

Meta has a dual-class share structure: Class A shares carry one vote each and Class B shares carry 10 votes each. Zuckerberg holds mostly Class B stock, so for each $100 of Meta's value roughly $13 is his, while about 61 of every 100 votes are his, the filing released Wednesday shows.

What is California Proposition 40 and when is the vote?

Proposition 40 is a ballot measure that would impose a one-time 5% tax on the net worth of California billionaires, drafted by Berkeley tax law professors and sponsored by SEIU United Healthcare Workers West. Backers say it could raise as much as $100 billion over five years, mostly for healthcare. California voters will decide its fate on November 3, 2026.

How much could Zuckerberg owe under the California billionaire tax?

Estimates vary by outlet and by Zuckerberg's fluctuating net worth. TechCrunch cited an estimate of as much as $11 billion, the Los Angeles Times put the figure at roughly $12 billion, and the BBC reported around $10 billion. His net worth is currently about $225 billion, according to CNBC.

What is Meta's new Class C stock and how does it protect Zuckerberg's control?

Class C is a new class of non-voting common stock Meta announced on Wednesday, taking effect in January. Shareholders receive one Class C share for each Class A or Class B share they own. Because the shares carry no votes, Zuckerberg can sell or transfer up to 20% of his grant to pay a potential tax bill without reducing his majority voting control.

Did Zuckerberg agree to stay in California, and for how long?

Yes. As part of the agreement, Zuckerberg committed to remain a California resident for eight years, absent material unforeseen circumstances, and to relocate wherever Meta is headquartered if the company moves. In September he had told the board he planned to list his Palo Alto home for sale and was evaluating moving his primary residence out of the state.

Sources