--- title: "Meta Approves Class C Common Stock" url: https://noti.group/meta-approves-class-c-common-stock/ language: en publisher: "Noti Group" section: "Technology" published: 2026-10-22T23:50:41.000Z updated: 2026-10-23T01:36:20.717Z id: db30a02f-337a-40a9-bac8-52f9540541c5 source: "TechCrunch https://techcrunch.com/2026/10/22/mark-zuckerbergs-creative-plan-to-pay-californias-proposed-billionaire-tax-without-losing-control-of-meta/" attribution: "Link to https://noti.group/meta-approves-class-c-common-stock/ and name Noti Group when you quote or summarize this story." --- # Meta Approves Class C Common Stock Meta's board has approved a new class of non-voting stock called Class C common stock, which will come into effect in January. This type of share allows holders to own a stake in the company without having any say in its decision-making process. The introduction of Class C shares is intended to support Meta's capital raising efforts, employee compensation packages, and strategic acquisitions, including significant investments in artificial intelligence research. The company plans to maintain its current voting structure, which concentrates control in the hands of its founder and CEO Mark Zuckerberg. A recent report by The New York Times suggests an alternative reason for introducing Class C shares: enabling Mark Zuckerberg to cover potential tax liabilities stemming from California's proposed billionaire tax. This new class of shares would allow him to sell some without relinquishing voting control over the company. California's Proposition 40, a wealth tax initiative drafted by Berkeley tax law professors and backed by SEIU United Healthcare Workers West, is currently making its way through the state's electoral process. The proposal aims to impose a one-time 5% levy on the net worth of several hundred California billionaires who reside in the state. The proposed tax could generate up to $100 billion over five years, with most funds allocated towards addressing the state's healthcare needs and the remainder dedicated to food assistance and education programs. Meta's board has been working on a plan to protect Mark Zuckerberg from the proposed billionaire tax in California. The plan was prompted by concerns raised by Zuckerberg himself, who warned that if an agreement couldn't be reached, he might be forced to sell his Palo Alto property, potentially causing a media sensation. According to documents filed with the SEC, discussions about the billionaire tax began as early as July, when Zuckerberg started discussing it with Meta's board members. The topic was revisited in subsequent meetings and communications throughout that month and August, further emphasizing the urgency of finding a solution. Meta has created a new class of non-voting shares called Class C to mitigate the impact of the proposed billionaire tax. Under this plan, existing shareholders will receive one Class C share for every Class A or Class B share they own, effectively creating a two-for-one stock split. This move is being framed as a one-time stock dividend that won't alter any shareholder's voting power. The new Class C shares are designed to reduce the tax burden on Zuckerberg and other Meta shareholders by separating their voting rights from their economic interests. By doing so, Meta aims to minimize the impact of Proposition 40 on its leadership and stakeholders. Meta's plan to mitigate the impact of California's proposed billionaire tax is taking shape. The company has filed a document outlining the terms of its dividend payout, which will allow Mark Zuckerberg to sell or transfer up to 20% of his shares without losing control. The dividend is structured in such a way that it won't affect Zuckerberg's majority voting power. As a result, he'll be able to use this portion of his shares to pay any potential tax liability arising from Proposition 40. This move aims to minimize the financial burden on Zuckerberg, who could face a tax bill of up to $11 billion. Meta has stated that its motivation for creating this new stock class was to ensure Zuckerberg's continued leadership. The company believes it's crucial for him to remain in close coordination with management and in proximity to Meta Superintelligence Labs. California's proposed billionaire tax has sparked intense debate among business leaders in Silicon Valley. Critics of Prop 40, including Google co-founder Sergey Brin, have been vocal about their opposition to the measure, which they claim would drive a capital flight from the state and amount to economic suicide for California. Despite this, it appears that some tech giants are already finding ways to adapt to the potential tax. Democratic U.S. Representative Ro Khanna, a key supporter of Prop 40, has reacted with amusement to news of Meta's strategy. In a post on X, he quipped that billionaires would likely find a way to pay the tax if it passes. Meta's approach suggests that even if Prop 40 is approved, California's tech industry may not be significantly impacted by the new tax. Meta's approach to paying California's proposed billionaire tax suggests that even if Prop 40 is approved, the state's tech industry may not be significantly impacted by the new tax. The company's plan involves setting aside a portion of its cash reserves to cover the potential tax liability. This strategy allows Meta to maintain control over its finances and operations while still complying with the proposed tax law. --- Source: [TechCrunch](https://techcrunch.com/2026/10/22/mark-zuckerbergs-creative-plan-to-pay-californias-proposed-billionaire-tax-without-losing-control-of-meta/) Published by Noti Group: https://noti.group/meta-approves-class-c-common-stock/