The pressure began with Meta’s growing AI bill. By late 2025, the company had concluded it would need outside capital for its build-out, even as stock buybacks that had helped protect Zuckerberg’s voting position were consuming cash. In the third quarter, Meta reported $34.9 billion in capital expenditures and negative $2.1 billion in free cash flow, then projected as much as $140 billion in 2026 capex.¹

That financing problem collided with California’s proposed Proposition 40, a one-time 5% levy on billionaire wealth due for a Nov. 3 vote. Zuckerberg owns roughly 13% of Meta economically but commands about 61% of its votes through super-voting Class B stock. Selling those shares to pay a multibillion-dollar tax bill would convert them into ordinary Class A shares, gradually eroding the control that lets him elect Meta’s board.²

In July and August, the filing shows, Zuckerberg warned directors that he was considering establishing residency outside California. The independent committee took the threat seriously—not simply as a tax dispute, but as an operational risk. It said it was “crucial that Mr. Zuckerberg remains in close coordination with the Company’s management and in close proximity to Meta Superintelligence Labs.”² Negotiations became tense enough that committee members considered resigning, while Zuckerberg resisted proposals that would eventually sunset his voting shares.¹

The September compromise was a new, nonvoting Class C share distributed one-for-one to all shareholders. Zuckerberg can immediately sell 20% of his Class C allocation—liquidity the company estimated at $20 billion—without surrendering his voting majority. In return, he agreed to remain in California, or wherever Meta is headquartered, for eight years barring unforeseen circumstances. “The goal is to keep Mr. Zuckerberg continuing to lead the Company from California,” Meta’s filing said.³

Meta insists the structure is broader than one founder’s tax planning. CFO Susan Li said the shares would support capital raising, employee compensation and acquisitions while preserving existing voting power. Critics may see a tailored shield for Zuckerberg; Meta’s case is that founder control and AI financing are now inseparable.²