Meta’s latest AI wager has produced an unusual corporate bargain: more financial flexibility for the company, and more protection for its founder’s control.

The pressure built as Meta’s spending accelerated. The company reported third-quarter revenue of $64.6 billion, up 26%, but capital expenditures reached $34.9 billion and free cash flow turned negative. With buybacks paused for four consecutive quarters, Meta faced a familiar problem: raising money, paying employees and pursuing acquisitions through ordinary shares would dilute Zuckerberg’s voting power.¹

Meta’s answer, announced alongside earnings, was a new non-voting Class C share. The stock is intended for AI investment, acquisitions and compensation, with trading set to begin in 2027. Chief Financial Officer Susan Li said the structure would “expand our funding tools” and give Meta flexibility to invest behind AI-driven momentum across its business.²

For Zuckerberg, however, the negotiations were about more than capital. He owns roughly 13.4% of Meta economically but controls about 60.6% of the vote through super-voting Class B shares. Selling those shares would convert them into ordinary Class A stock, eroding the control that lets him elect directors and dominate shareholder votes.¹

That tension sharpened in July and August, as California’s proposed Proposition 40 wealth tax threatened a multibillion-dollar bill for the state’s richest residents. According to Meta’s filing, Zuckerberg warned directors that he was considering establishing residence outside California, while an independent committee pressed for shareholder-friendly limits on his voting stock. The committee at one stage discussed resigning or dissolving if no compromise could be reached.¹

The September deal avoided that rupture. Zuckerberg dropped a request for a larger pay package, kept his $1 salary and agreed to remain in California—or wherever Meta is headquartered—for eight years. In exchange, every Class A and B share will receive one Class C share; Zuckerberg can immediately sell 20% of his allocation without surrendering votes. The arrangement gives Meta a bigger AI-financing toolkit while ensuring its founder remains firmly at the controls.¹

The deal was the most visible sign of how a prospective tax on California billionaires is reshaping corporate planning, with Zuckerberg negotiating directly with his own board to stay in the state.³