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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

California Billionaires Raise $300M to Fight Proposition 40 Wealth Tax

California Billionaires Raise $300M to Fight Proposition 40 Wealth Tax

by | Oct 17, 2026 | Fight the FUD

California billionaires are intensifying efforts to defeat Proposition 40, a proposed wealth tax targeting the state's billionaires, ahead of the November 3, 2026 election. Notable figures such as Google co-founder Sergey Brin, venture capitalist John Doerr, and Ripple co-founder Chris Larsen have collectively raised over $300 million in opposition to the measure.

The increased funding suggests stronger opposition to Proposition 40, and market pricing implies a decreased likelihood of the wealth tax passing. Support for the measure has declined in recent polling, consistent with the stepped-up opposition efforts.

Proposition 40 wealth tax details

Proposition 40 is a one-time, 5% levy on the state's more than 200 billionaires, proposed by SEIU United Healthcare Workers West last year to address lost revenue from federal cuts, with 90% of the dollars raised going to healthcare and 10% to food assistance or education-related programs, according to The San Diego Union-Tribune. The tax would apply to individuals with more than $1 billion in net worth who were California residents as of January 1, 2026, with real estate and some pensions and retirement accounts excluded.

Those subject to the tax could pay it in full in 2027 or make annual payments over five years with added interest, the Union-Tribune reported. Proponents claim it will raise $100 billion, while the nonpartisan Legislative Analyst's Office estimates the yield at tens of billions of dollars but said it could reduce ongoing state income tax revenues by less than $1 billion per year if billionaires leave.

The measure's backers say the tax is necessary to prevent hospitals and clinics from closing and low-income residents from losing Medi-Cal coverage, while critics argue it will drive wealthy residents out of the state and inflict long-term damage to the economy, according to the Union-Tribune. California could lose at least $30 billion in annual federal funding as a result of President Donald Trump's spending bill, according to the California Budget and Policy Center.

Billionaire opposition to Proposition 40

Google co-founders Larry Page and Sergey Brin are among the billionaires who moved out of California last year as talk of the wealth tax grew, the Union-Tribune reported. Brin has shelled out more than $100 million to Building a Better California, a newly formed group opposing Proposition 40.

Larsen has been particularly vocal, contributing significantly to campaigns opposing the tax and supporting initiatives that could nullify it, according to Crypto Briefing. The initiative has roiled California politics for months, dividing state leaders and labor unions, the Union-Tribune reported.

Governor Gavin Newsom, who opposes the measure and is eyeing a potential presidential bid, recently called for a national wealth tax instead. "Wealth is movable, and it shops for the state with the lowest taxes," Newsom wrote in a June Substack post, adding that "the fight belongs at the federal level, where this broken system was created in the first place."

Competing measures could void Proposition 40

Even if voters approve Proposition 40, the tax may not take effect. Propositions 41 and 42, which appear on the same ballot, each contain provisions that would void Proposition 40 if either receives more affirmative votes, according to JD Supra.

Proposition 41 would require the state auditor to review proposed special taxes before they go to voters and invalidate taxes that do not comply with the state spending limit, while Proposition 42 would prohibit new state personal property taxes, the Union-Tribune reported. Thad Kousser, a professor of political science at the University of California, San Diego, said the situation poses a "triple challenge" for proponents.

"They don't know where the end zone is," Kousser said. "They're going to have to both make an argument for a wealth tax that has split the progressive coalition, but also make an argument against two other initiatives that may be appealing to voters who see them probably for the first time when they open their ballots."

Supporters and opponents make their case

Dave Regan, the president of SEIU United Healthcare Workers West and the architect of the tax, said in an interview that the tax would prevent a "healthcare catastrophe" in California. "We're either going to watch this train wreck or we're going to pass Proposition 40," he said, calling it "a solution to a problem that was put in all of our laps."

Regan argues the tax will give California five years to figure out a long-term solution for healthcare funding and brushed off claims it would push wealthy residents out, calling that a "disingenuous argument." "A one-time tax creates no incentive for billionaires to leave the state and we felt that was important," Regan said.

Opponents argue the money would only temporarily stem the budgetary bleeding. The No on 40 coalition, which includes the California Medical Association, the California Teachers Association, the California Chamber of Commerce and Planned Parenthood Affiliates of California, positions the initiative on its website as a flawed, reckless tax, the Union-Tribune reported.

The billionaires tax has been endorsed by Rep. Bernie Sanders, the California Democratic Party and the California Federation of Labor Unions. Nvidia CEO Jensen Huang has also voiced his support, recently saying he is "perfectly fine" with having to pay more in taxes; Forbes estimates Huang is worth $198 billion.

What comes next for the Proposition 40 wealth tax

A September poll conducted for The San Diego Union-Tribune found the measure drawing more support than opposition from likely voters statewide, but still shy of a majority, with about 48% of respondents saying they would vote for it. The poll had a credibility interval of 4.6 percentage points.

Just over a month before Election Day, Kousser said he expects the three measures will trigger a massive amount of spending that will blanket the airwaves and fill voters' mailboxes. While the opposition, funded largely by billionaires like Brin, will almost certainly outspend the yes campaign, Kousser said it gives supporters an opportunity to make a David-versus-Goliath argument.

The outcome could reverberate long past Election Day. Many of the progressives who've been uneasy about Prop. 40… my hunch is that if this fails in progressive California, it slows down the momentum for this as a policy nationwide, Kousser said, according to the Union-Tribune.

Conclusion

California voters will decide on November 3, 2026 whether to approve the first-in-the-nation wealth tax, but the fate of Proposition 40 will rest not only on a simple majority but on how much support two competing initiatives receive. With billionaires having raised over $300 million in opposition and market pricing implying a decreased likelihood of passage, observers are watching upcoming polls and public statements from key political figures such as Governor Gavin Newsom, who opposes the measure.

Frequently Asked Questions

What is California Proposition 40?

Proposition 40 is a one-time, 5% wealth tax on California residents with more than $1 billion in net worth as of January 1, 2026. Proposed by SEIU United Healthcare Workers West, it would direct 90% of proceeds to healthcare and 10% to food assistance or education-related programs.

How much have billionaires raised to fight Proposition 40?

Google co-founder Sergey Brin, venture capitalist John Doerr, Ripple co-founder Chris Larsen and others have collectively raised over $300 million in opposition to the measure. Brin alone has contributed more than $100 million to Building a Better California, a newly formed opposition group.

When is the vote on California's Proposition 40 wealth tax?

California voters will decide Proposition 40 on November 3, 2026. Even if approved, the tax may not take effect because Propositions 41 and 42 on the same ballot could void it if either receives more affirmative votes.

How much revenue would the Proposition 40 wealth tax raise?

Proponents claim the tax will raise $100 billion. The nonpartisan Legislative Analyst's Office estimates the yield at tens of billions of dollars, but said it could also reduce ongoing state income tax revenues by less than $1 billion per year if billionaires leave California.

Who supports and who opposes California Proposition 40?

The tax is endorsed by Rep. Bernie Sanders, the California Democratic Party, the California Federation of Labor Unions and Nvidia CEO Jensen Huang. Opponents include Governor Gavin Newsom, the California Chamber of Commerce, the California Medical Association and a billionaire-funded campaign led in part by Sergey Brin.

Sources