Anders Melin (Bloomberg Law): Mark Zuckerberg Plots Deal to Pay Wealth Tax, Keep Meta Control

Mark Zuckerberg’s months of wrangling with his own board came to a head with a dinner-table ultimatum.

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His announcement came on Sept. 9, during the board’s regularly scheduled dinner. He was taking steps to leave California after the wealth-tax proposal made it onto the November ballot. Zuckerberg, who’s currently valued at $247 billion by the Bloomberg Billionaires Index, would face a multibillion-dollar bill from the potential levy, which would apply to people whose net worth exceeded $1 billion on Jan. 1, 2026.

Zuckerberg had been warning the board for weeks that this was a possibility. But now he had a timeline: He would list his home for sale in just four days — a move, he reminded them, that would quickly become public information.

Within days, the two sides reached an agreement: Meta would offer a new class of non-voting shares to existing investors, and Zuckerberg would have a special agreement that would give him the ability to sell some of that stock without diluting his majority voting power.

Meta currently has Class A shares, which give holders one vote, and Class B, which come with 10 votes. Zuckerberg holds a combination of the two, resulting in his controlling about 13% of Meta’s total shares but more than 60% of all votes. He told the board this year that he wouldn’t support an issuance of shares that could hamper his voting control, the filing shows.

Instead, Meta agreed to create a third category of shares – Class C – that will have no votes. Zuckerberg and every other Meta investor will receive one Class C share for every share they own from the other two categories.

Because the deal will effectively spread Meta’s market value among a greater number of shares, it won’t impact Zuckerberg’s fortune. He’s currently the fifth-richest person in the world, according to Bloomberg’s wealth index.

Investors will be able to trade Class C shares freely in the public market, although Zuckerberg will initially be able to sell only 20% of his — giving him immediate liquidity to pay the billionaires tax if voters approve the levy. While an early proposal would only have taken effect if the billionaires tax kicks in, the final agreement will be implemented regardless of what happens with the vote.

In return, he will remain a resident wherever the company’s headquarters are — currently in Silicon Valley’s Menlo Park — for the next eight years, and won’t ask for a moonshot compensation package that could hit Meta’s bottom line.

An ancillary benefit of the new class of non-voting shares, according to Meta, is that it will allow them to pursue financing deals with sovereign wealth funds “for which non-voting shares could help mitigate the regulatory and compliance issues.”