Meta strikes deal with Zuckerberg to keep him in California
What's the story
Meta has struck a deal with its CEO Mark Zuckerberg, allowing him to sell shares without losing control of the company. In return, Zuckerberg has agreed to stay in California even if a proposed wealth tax is approved by voters. The agreement was reached after lengthy negotiations and is part of Meta's efforts to keep its founder as CEO and at its headquarters in California.
Tax details
Proposed wealth tax and voting power
The proposed wealth tax, which will be voted on November 3, seeks to impose a one-time levy of 5% on California residents with wealth exceeding $1 billion.
Zuckerberg controls about 61% of Meta's votes through super-voting shares.
The new stock structure will allow him to cash out up to half his stake over time without losing voting power.
CEO's pledge
Zuckerberg's 8-year commitment and capital restructuring
Zuckerberg, the world's fifth-richest person with a net worth of $246 billion, has pledged to stay in California for eight years while leading Meta.
The deal was part of a broader effort that started in late 2025 to reassess Meta's capital structure and ensure funding for its AI ambitions.
The new class of non-voting shares will be created via a two-for-one stock split for existing shareholders, with trading expected to begin in January.
Funding strategy
Funding AI investments and potential shareholder pushback
The new stock structure will also enable Meta to sell shares in the future to fund its AI investments without diluting Zuckerberg's control.
Internal forecasts show that Meta will need to raise "hundreds of billions of dollars" over several years, starting this autumn, for its AI initiatives.
However, the move could face opposition from shareholders.
Financial results
Meta's financial performance amid legal challenges
Meta's revenue for the third quarter rose 26% year-on-year (YoY) to $64.6 billion, beating its guidance of $61 billion-$64 billion and analysts' estimates of $63.3 billion.
The company's net income for the period was $9.9 billion after a charge of the same amount for a settlement with US states over teen mental health harm in August.
Despite legal challenges, including a recent $25 billion judgment related to Cambridge Analytica, Meta's financial performance has been strong amid its AI push.