Not a big fan since we now only get 2 links a month,
But it would have been easier to relocate to the border in Tahoe than fill out mountains of paperwork; he lives on an estate in a Maui bunker anyway, not spoilt for housing options...
Not very good with building technology; he lost 80 billion on a nonexistent metaverse fail. Is that now a tax loss?
I understand it's a move to keep his voting shares but... Why would the board care if the Zuck was to sell his big house in California? What was the threat to Meta/the board?
He owns enough shares that there would be a significant change in the supply/demand ratio when California forces him to sell to meet his tax burden. That would tank the stock price because way too much supply when he tries to sell.
So basically meta stepped in to say they'd pay a portion of zucks tax burden to protect the supply/demand ratio of the stock, which protects the overall market price of Facebook stock and the valuation of the company as a whole.
Wealth taxes are inherently stupid in our modern financial system and this is a clear example of why.
Your description of the scenario does not seem to be accurate. He is being gifted a new class of stock so that he does not need to relinquish control of the company for no apparent good reason. I'm indirectly a shareholder of this company through the major stock index inclusion, and I have not been similarly been gifted the same. I hope he pays his CA taxes fairly and as shareholders we are made whole by this chicanery.
> The solution is a quasi-share split: Meta is creating a new Class C stock, with zero votes per share. Shareholders will get one no-vote Class C share for every one-vote Class A share or 10-vote Class B share that they currently own. Zuckerberg, who owns about 341 million high-vote Class B shares (and like 1 million low-vote shares), will get about 342 million new zero-vote shares; all the other shareholders, who own about 3.4 billion low-vote shares, will get 3.4 billion new no-vote shares.
And in the footnotes:
> Stock exchange rules prevent already-public companies from creating new high-vote shares, or from distributing new low/zero-vote shares in non-proportional ways. So Meta could not, for instance, give Zuckerberg a big dividend of voting shares while giving everyone else a big dividend of zero-vote shares. But this mechanism — giving everyone the same dividend of zero-voting shares — works.
> Wealth taxes are inherently stupid in our modern financial system
"our modern financial system" is what is left of a reasonable but by now largely dismantled financial system that used to exist between roughly the 1930s and 1980s.
The entire phrase "Wealth taxes are inherently stupid in our modern financial system" has "throwing up my hands" and "there's nothing we can possibly do" written all over it. The financial system is a societal construct, not a natural constant like, say, the speed of light.
A company that's grown large enough to make its shareholders worth multiple hundred billions of dollars is itself too large.
One of the bigger failings of the US government over the last half century is allowing corporations to grow and merge their way to become as large as many have. Stronger enforcement of anti-trust would have both significantly reduced wealth inequality in this country as well as siphoned off much of the growing political power corporations have relative to regular citizens.
OK, to be more precise: it would still have a market cap of "multiple hundred billions of dollars" if it never acquired or merged with any other companies.
No one here seemed to understand your question, which is one I had too. Probably because no one but the board have the answer.
My guess is you can expect a stock price crash if your founder-star CEO moves away from HQ? It would mean tech stocks behave quite differently from e.g. Starbucks. Also seems like a literal chicken race since Mark would be affected even more than the board if that happened on top of everything else.
I guess most likely is they just needed a reason of some sort to report to the SEC so that's what they used. Much nicer sounding than Mark threatening to replace the board, or the board are obviously his puppets, or anything else that happens at a founder-controlled (via low-vote shares) company.
Is this hyperbole? Or did you actually look into details? I'm curious about your understanding of what happened here. I believe this is an exchange of share types, but I could be mistaken.
They gave every shareholder a non-voting share for each share they own. Effectively a stock split. Zuck can sell his non-voting shares to pay the tax without losing control of the company.
In some sense Meta has doubled the voting power of Zuckerberg's shares. Previously he had X shares with 10X votes. Now he has 2X shares, can sell half of them for close to the market price, and still keep his 10X votes.
"The board establishes a new Class C share type with no votes. It also announces a one-time dividend of a Class C share for each Class A and B share outstanding".
You changed your post. You mentioned Levine. I don't know what else you changed. But Levine posted this in his article. I don't know where you're getting the part where he can sell half his shares.
"If Zuckerberg needs to pay taxes, he can sell his new zero-vote shares to raise money without diluting his voting rights. Not too many: He can “immediately sell or transfer up to 20% of the shares of Class C common stock that he receives in the Dividend, representing 10% of his overall economic stake in the Company, for any reason,” but the board “negotiated for and obtained Mr. Zuckerberg’s agreement that 80% of the shares of Class C common stock that he receives in the Dividend be subject to the Stapling Condition,” under which he can’t sell those no-vote shares without also selling some high-vote shares. The basic deal remains intact — he needs to own a meaningful chunk of shares to keep voting control — but there’s a liquidity buffer for taxes."
But they aren't "shielding" him really. They are just making it possible for him to pay the tax by selling shares in the company without giving up voting shares...
I mean maybe that is "shielding" but it's not like they are getting him out of paying the tax if it passes
The point of the law is to reduce the power of billionaires. Billionaires Using their power to change the rules and systemically avoid loss of power using a mechanisim available to literally nobody else is pretty much the antithesis of this idea.
It depends on the day and how honest people feel. If it were truly about numbers they would probably find more success in getting their government to spend smarter.
I honestly don't see how this outcome isn't all but guaranteed. It is actually almost comically self-destructive. Taxes based on the same idea of (just take a bit from the rich) destroyed the Swedish financial markets (basically forever).
> As a result, revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.[4] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988
So off by an order of magnitude in their estimates _and_ nuked revenue from the capital gains taxes. Overall probably one of the dumbest ideas ever executed because it was so easy to forecast the second order effects.
A transaction tax is not the same as a wealth tax.
Property taxes, paid by every single homeowner, are a wealth tax. The difference is that for most homeowners, their house is their most valuable asset. Not the case for billionaires.
The point of the law was to generate money for the state to fund the same mistakes France and GB are currently reeling from. Reducing power had nothing to do with it.
> The point of the law was to generate money for the state to fund the same mistakes France and GB are currently reeling from.
Which mistakes of France and GB are you referring to? The money (90%) will go to health care spending. So, yes - vastly overpriced crap - France spends half for universal care with better outcomes.
Aiming to reduce the number of billionaires is not sound economic policy. You are taking away the incentives that have generated so much progress and job creation in America. Mostly when people complain about billionaires it’s either sour grapes, or a certain type of billionaire they disagree with politically.
If the stockholders are OK with it, who's to say otherwise?
I do think it would be a good idea to look at additional regulation regarding the public companies that pension and major index funds can invest in. I'm not crazy about being forced to own Musk properties just because I hold an S&P index, for example.
The SEC is very good at creating complexity, but has been terrible at protecting shareholders. The SEC has failed to detect and prosecute almost every massive fraud, including Madoff and Enron (despite being tipped off in both cases).
For the longest time, exchanges didn't list stock with super-voting/dual class shares. It was only in the late 80s/early 90s that this rule was dropped; you'll note that Microsoft and Apple don't use them, as they were banned when those companies went public.
How do you imagine it working, this regulation whereby an index designed to track the 500 largest companies is required to exclude some of those just because they happen to be run by a guy you dislike?
> … an index designed to track the 500 largest companies is required to exclude some of those just because they happen to be run by a guy you dislike?
Emotions about the executives and founders aside, it may be worthwhile to exclude securities with multiple concentrated voting classes (like Meta) or those with one owner with more than X% of the float (like SpaceX).
Yes since Zuck controls the board and negotiators he effectively dealt this outcome to himself, to large degree. Obviously "the shareholders" in a general sense have limited interest protecting the dual class structure.
Society? Why are you less crazy about Musk properties than any of the rest of the S&P? Does that suggest that a system that allows such concentrations of wealth and control in so few individuals might be flawed?
IMO, let the unicorns leave. Europe figured it out. Get the vast majority of the benefits of their contributions without being sucked dry and subjected to their whims in whatever other domains they fancy.
I guess only pirate billionaires born on 3rd base can imagine being this craven and petty.
My man renamed the damn corp to "Meta" and proceeded to YOLO nearly triple digit billions USD on fire, shamelessly pivots to AI like all the other bros, while holding a solid majority of voting stock, and now we have to listen to him and his pals complain they might have to give something back.
“Born on third base.” You make him seem like minor nobility. His dad is a dentist and his mom is a psychiatrist. Kids with a background like that are a dime a dozen.
If society truly did not like the company, society would stop using whatever the company made/did/provide. Since billions of people use the service he company uses, it's hard to say society does not like the company
Well then, you haven’t really read what the situation is, have you?
He is going to pay, he just didn’t want to sell his normal shares, so he doesn’t lose his voting control. So instead, they are creating new class of shares that he can sell to pay the taxes.
Not a big fan since we now only get 2 links a month,
But it would have been easier to relocate to the border in Tahoe than fill out mountains of paperwork; he lives on an estate in a Maui bunker anyway, not spoilt for housing options...
Not very good with building technology; he lost 80 billion on a nonexistent metaverse fail. Is that now a tax loss?
https://news.ycombinator.com/item?id=50217588
I understood 30 years ago (when a colleague suggested it as a plan) that "relocating to Tahoe" is something the California FTB views as a no-op.
We don't have to post hyperbole or speculation (there's social media for that.) This is a public company, we can read public documents such as...
https://www.sec.gov/Archives/edgar/data/1326801/000162828026...
NOTE: Look for "Founder Alignment Agreement" in the above doc as an example if you're doing a quick scan.
https://www.sec.gov/Archives/edgar/data/1326801/000162828026...
https://investor.atmeta.com/investor-news/press-release-deta...
https://archive.ph/2Dyp0
That's not a trusted service anymore
Comments:
Guardian: Meta strikes deal with Zuckerberg to protect him from California wealth tax (39 points, 2 days ago, 33 comments) https://news.ycombinator.com/item?id=50193581
Wired: Mark Zuckerberg Agrees to Stay in California Despite Billionaires' Tax Measure (5 points, 2 days ago, 3 comments) https://news.ycombinator.com/item?id=50188801
Telegraph: Meta strikes deal to protect Zuckerberg from California billionaire tax (9 points, 2 days ago) https://news.ycombinator.com/item?id=50191129
WSJ: Mark Zuckerberg Threatened to Leave California. Meta’s Board Cut Him a Deal (4 points, 2 days ago) https://news.ycombinator.com/item?id=50193052 (30 points, 1 day ago, 40 comments) https://news.ycombinator.com/item?id=50199284
This is good, punish the shareholders, wallstreet gets the news.
This wealth tax is poorly planned, tax the wealth, but find a better way.
[dupe] https://news.ycombinator.com/item?id=50199284
https://news.ycombinator.com/item?id=50193581
I understand it's a move to keep his voting shares but... Why would the board care if the Zuck was to sell his big house in California? What was the threat to Meta/the board?
He owns enough shares that there would be a significant change in the supply/demand ratio when California forces him to sell to meet his tax burden. That would tank the stock price because way too much supply when he tries to sell.
So basically meta stepped in to say they'd pay a portion of zucks tax burden to protect the supply/demand ratio of the stock, which protects the overall market price of Facebook stock and the valuation of the company as a whole.
Wealth taxes are inherently stupid in our modern financial system and this is a clear example of why.
Your description of the scenario does not seem to be accurate. He is being gifted a new class of stock so that he does not need to relinquish control of the company for no apparent good reason. I'm indirectly a shareholder of this company through the major stock index inclusion, and I have not been similarly been gifted the same. I hope he pays his CA taxes fairly and as shareholders we are made whole by this chicanery.
Yes you are [being gifted the same]. From yesterday's Money Stuff:
https://www.bloomberg.com/opinion/newsletters/2026-10-22/zuc...
> The solution is a quasi-share split: Meta is creating a new Class C stock, with zero votes per share. Shareholders will get one no-vote Class C share for every one-vote Class A share or 10-vote Class B share that they currently own. Zuckerberg, who owns about 341 million high-vote Class B shares (and like 1 million low-vote shares), will get about 342 million new zero-vote shares; all the other shareholders, who own about 3.4 billion low-vote shares, will get 3.4 billion new no-vote shares.
And in the footnotes:
> Stock exchange rules prevent already-public companies from creating new high-vote shares, or from distributing new low/zero-vote shares in non-proportional ways. So Meta could not, for instance, give Zuckerberg a big dividend of voting shares while giving everyone else a big dividend of zero-vote shares. But this mechanism — giving everyone the same dividend of zero-voting shares — works.
Check out the work of Gabriel Zucman. Many interviews online. Makes a good case for wealth taxes.
> Wealth taxes are inherently stupid in our modern financial system
"our modern financial system" is what is left of a reasonable but by now largely dismantled financial system that used to exist between roughly the 1930s and 1980s.
The entire phrase "Wealth taxes are inherently stupid in our modern financial system" has "throwing up my hands" and "there's nothing we can possibly do" written all over it. The financial system is a societal construct, not a natural constant like, say, the speed of light.
If not "wealth taxes", then what? Poverty taxes?
We tax houses every year, which is a wealth and land tax.
It isn't stupid. Multi hundred billionaires shouldn't exist. Then this wouldn't be a "problem".
It’s just a byproduct of owning shares of a company that becomes big. Which subpart do you object to?
A company that's grown large enough to make its shareholders worth multiple hundred billions of dollars is itself too large.
One of the bigger failings of the US government over the last half century is allowing corporations to grow and merge their way to become as large as many have. Stronger enforcement of anti-trust would have both significantly reduced wealth inequality in this country as well as siphoned off much of the growing political power corporations have relative to regular citizens.
Facebook didn't become large through mergers.
OK, to be more precise: it would still have a market cap of "multiple hundred billions of dollars" if it never acquired or merged with any other companies.
Yeah, the existence of billionaires is a problem. But then again, so is the existence of millionaires and thousandaires.
Honestly if any one has more than $999 the government should take it from them.
The US government collects and spends trillions every year, and is doing far more evil than anyone else, perhaps they shouldn't exist?
No one here seemed to understand your question, which is one I had too. Probably because no one but the board have the answer.
My guess is you can expect a stock price crash if your founder-star CEO moves away from HQ? It would mean tech stocks behave quite differently from e.g. Starbucks. Also seems like a literal chicken race since Mark would be affected even more than the board if that happened on top of everything else.
I guess most likely is they just needed a reason of some sort to report to the SEC so that's what they used. Much nicer sounding than Mark threatening to replace the board, or the board are obviously his puppets, or anything else that happens at a founder-controlled (via low-vote shares) company.
The board doesn’t care. Zuckerberg has total control of Meta, so if he wants to increase his pay for whatever reason, he can.
That is all this is, a guy giving himself a pay increase, which almost everyone would if they could.
Alternative headline: "Man asks for raise because his taxes went up"
FWIW I think this is better than avoiding the tax.
Is this hyperbole? Or did you actually look into details? I'm curious about your understanding of what happened here. I believe this is an exchange of share types, but I could be mistaken.
They gave every shareholder a non-voting share for each share they own. Effectively a stock split. Zuck can sell his non-voting shares to pay the tax without losing control of the company.
In some sense Meta has doubled the voting power of Zuckerberg's shares. Previously he had X shares with 10X votes. Now he has 2X shares, can sell half of them for close to the market price, and still keep his 10X votes.
Where did you get this information? We know how this works. This is a public company. This all happens in the open.
https://www.sec.gov/Archives/edgar/data/1326801/000162828026...
Your SEC link says the exact same thing.
"The board establishes a new Class C share type with no votes. It also announces a one-time dividend of a Class C share for each Class A and B share outstanding".
Please tell me what I got wrong.
You changed your post. You mentioned Levine. I don't know what else you changed. But Levine posted this in his article. I don't know where you're getting the part where he can sell half his shares.
"If Zuckerberg needs to pay taxes, he can sell his new zero-vote shares to raise money without diluting his voting rights. Not too many: He can “immediately sell or transfer up to 20% of the shares of Class C common stock that he receives in the Dividend, representing 10% of his overall economic stake in the Company, for any reason,” but the board “negotiated for and obtained Mr. Zuckerberg’s agreement that 80% of the shares of Class C common stock that he receives in the Dividend be subject to the Stapling Condition,” under which he can’t sell those no-vote shares without also selling some high-vote shares. The basic deal remains intact — he needs to own a meaningful chunk of shares to keep voting control — but there’s a liquidity buffer for taxes."
I was wrong about how much he's allowed to sell.
On the other hand, once the non-voting shares exist, he's going to sell them some day.
But they aren't "shielding" him really. They are just making it possible for him to pay the tax by selling shares in the company without giving up voting shares...
I mean maybe that is "shielding" but it's not like they are getting him out of paying the tax if it passes
The point of the law is to reduce the power of billionaires. Billionaires Using their power to change the rules and systemically avoid loss of power using a mechanisim available to literally nobody else is pretty much the antithesis of this idea.
I thought the point was to raise tax revenue from the people whose wealth increased the most.
It depends on the day and how honest people feel. If it were truly about numbers they would probably find more success in getting their government to spend smarter.
Or do both - tax billionaires and spend smarter - to reduce income taxes. Think how great that would be.
The tax will probably raise negative revenue but that will be fine because revenue was never the point of it.
Norway did not see negative revenue from their tax.
Remains to be seen. Sweden and France both repealed their wealth taxes.
A property tax is a wealth tax. You're already paying a wealth tax.
No you’re paying a property tax. It’s like saying “a housecat is a feline. You already have a feline” when talking about a bobcat.
I honestly don't see how this outcome isn't all but guaranteed. It is actually almost comically self-destructive. Taxes based on the same idea of (just take a bit from the rich) destroyed the Swedish financial markets (basically forever).
https://en.wikipedia.org/wiki/Swedish_financial_transaction_...
> As a result, revenues from these taxes were disappointing. For example, revenues from the tax on fixed-income securities were initially expected to amount to 1,500 million Swedish kronor per year. They did not amount to more than 80 million Swedish kronor in any year and the average was closer to 50 million.[4] In addition, as taxable trading volumes fell, so did revenues from capital gains taxes, entirely offsetting revenues from the equity transactions tax that had grown to 4,000 million Swedish kronor by 1988
So off by an order of magnitude in their estimates _and_ nuked revenue from the capital gains taxes. Overall probably one of the dumbest ideas ever executed because it was so easy to forecast the second order effects.
A transaction tax is not the same as a wealth tax.
Property taxes, paid by every single homeowner, are a wealth tax. The difference is that for most homeowners, their house is their most valuable asset. Not the case for billionaires.
The point of the law was to generate money for the state to fund the same mistakes France and GB are currently reeling from. Reducing power had nothing to do with it.
> The point of the law was to generate money for the state to fund the same mistakes France and GB are currently reeling from.
Which mistakes of France and GB are you referring to? The money (90%) will go to health care spending. So, yes - vastly overpriced crap - France spends half for universal care with better outcomes.
Cui bono?
Squishing the budget deficit for 1 cycle in 2 years.
No law is going to prevent billionaires overnight. At the stage we're in, any political change needs to aim for decades in the future.
Aiming to reduce the number of billionaires is not sound economic policy. You are taking away the incentives that have generated so much progress and job creation in America. Mostly when people complain about billionaires it’s either sour grapes, or a certain type of billionaire they disagree with politically.
"I would have worked hard and started a great company, but since I could only ever reach $900M in wealth, I decided to be a bum instead". Sure.
Look it's the temporarily embarrassed billionaire!
Billionaires are a symptom of a problem that the US had under control for almost half a century until Reagan basically broke American economic policy.
Public companies shouldn’t be allowed to have super majority shareholders that rule like a king.
If the stockholders are OK with it, who's to say otherwise?
I do think it would be a good idea to look at additional regulation regarding the public companies that pension and major index funds can invest in. I'm not crazy about being forced to own Musk properties just because I hold an S&P index, for example.
Shareholders are morons*. That's why the SEC was established in the first place.
*Source: am a moron.
As a moron, are you allowed to decide that Zuck knows how to run Meta better than the shareholders?
The SEC is very good at creating complexity, but has been terrible at protecting shareholders. The SEC has failed to detect and prosecute almost every massive fraud, including Madoff and Enron (despite being tipped off in both cases).
That’s counting one side of the ledger: what of fraud that never had the opportunity to happen?
“Some people still died in car crashes, so seatbelts shouldn’t be required in cars”
For the longest time, exchanges didn't list stock with super-voting/dual class shares. It was only in the late 80s/early 90s that this rule was dropped; you'll note that Microsoft and Apple don't use them, as they were banned when those companies went public.
How do you imagine it working, this regulation whereby an index designed to track the 500 largest companies is required to exclude some of those just because they happen to be run by a guy you dislike?
> … an index designed to track the 500 largest companies is required to exclude some of those just because they happen to be run by a guy you dislike?
Emotions about the executives and founders aside, it may be worthwhile to exclude securities with multiple concentrated voting classes (like Meta) or those with one owner with more than X% of the float (like SpaceX).
Somebody could just create an index fund like that.
I suspect they don’t because such a fund would have missed out on a ton of growth captured by the less “picky” indexes of the last quarter century.
Why have any regulations for corporate governance?
They don’t have voting rights anyway. They are more like fans than stock holders
They can buy and sell the stock. If they weren't okay with it, they could not buy, or sell if they already own.
Yes since Zuck controls the board and negotiators he effectively dealt this outcome to himself, to large degree. Obviously "the shareholders" in a general sense have limited interest protecting the dual class structure.
who's to say otherwise?
Society? Why are you less crazy about Musk properties than any of the rest of the S&P? Does that suggest that a system that allows such concentrations of wealth and control in so few individuals might be flawed?
IMO, let the unicorns leave. Europe figured it out. Get the vast majority of the benefits of their contributions without being sucked dry and subjected to their whims in whatever other domains they fancy.
The majority stockholders, as in Zuck?
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I guess only pirate billionaires born on 3rd base can imagine being this craven and petty.
My man renamed the damn corp to "Meta" and proceeded to YOLO nearly triple digit billions USD on fire, shamelessly pivots to AI like all the other bros, while holding a solid majority of voting stock, and now we have to listen to him and his pals complain they might have to give something back.
Gross.
“Born on third base.” You make him seem like minor nobility. His dad is a dentist and his mom is a psychiatrist. Kids with a background like that are a dime a dozen.
If you don't like the stock don't buy it.
What if I don't like the human
What if society doesn't like the company? We should be able to destroy it.
If society truly did not like the company, society would stop using whatever the company made/did/provide. Since billions of people use the service he company uses, it's hard to say society does not like the company
Well then, you haven’t really read what the situation is, have you?
He is going to pay, he just didn’t want to sell his normal shares, so he doesn’t lose his voting control. So instead, they are creating new class of shares that he can sell to pay the taxes.
if they are creating new class of shares, are they giving him this extra money from shareholders?
They did a stock split