The pressure began with California’s proposed Proposition 40, a one-time 5% levy on the net worth of billionaires living in the state. Zuckerberg owns roughly 13% of Meta but commands about 61% of its votes through supervoting Class B shares; selling those shares to pay a tax bill would convert them into ordinary shares and erode that control.¹

By July, Zuckerberg had told Meta’s independent directors that a wealth-tax payment could push his voting stake down to about 53%. The board’s special committee, meanwhile, saw a separate corporate risk: Meta was preparing for huge AI-related spending and needed capital without relying as heavily on buybacks that had helped preserve Zuckerberg’s voting majority.²

The negotiations turned combative. Zuckerberg resisted proposed limits on his voting shares and indicated he was considering establishing residency outside California. In September, he told directors he planned to list his Palo Alto home, effectively putting a deadline on the talks. The committee considered whether members might resign if no shareholder-friendly compromise emerged.²

Meta’s directors nevertheless argued that it was “crucial” for Zuckerberg to remain close to management and Meta Superintelligence Labs, citing the difficulties of operating when he was not physically present during the pandemic.¹ Zuckerberg ultimately agreed to remain in California, or wherever Meta is headquartered, for eight years absent unforeseen circumstances.³

The deal, finalized in September and announced with quarterly results, creates nonvoting Class C shares for all shareholders. Zuckerberg can immediately sell 20% of his new shares—providing potential liquidity for a tax bill—without sacrificing his majority vote. Meta says the structure also broadens its options for capital raising, employee pay and acquisitions as AI costs surge.¹ The compromise preserves a founder-led company while exposing the unusual leverage a founder retains when control and ownership no longer move together.