Meta Platforms has reached an agreement with CEO Mark Zuckerberg to keep him residing in California amid concerns over a proposed billionaire wealth tax. The deal, announced Wednesday, involves the issuance of a new class of non-voting shares that Zuckerberg can sell to cover a potential tax liability if voters approve Proposition 40 in November.
The arrangement ensures Zuckerberg remains in California—or wherever Meta’s headquarters are located—for the next eight years. Under the terms, Zuckerberg will receive Class C non-voting shares in January 2027, which he can immediately sell up to 20% of to fund a potential tax bill. The shares represent 10% of his total economic stake in Meta, allowing him to raise cash without sacrificing voting control. Zuckerberg currently holds approximately 61% of Meta’s voting power through super-voting shares.
Meta stated the new shares will also help fund acquisitions and retain top talent while preserving Zuckerberg’s leadership. The company’s filing noted it expects to raise hundreds of billions of dollars over several years to finance AI-related growth initiatives. Zuckerberg’s net worth is estimated at $240 billion, making him the sixth-richest person globally, according to Forbes.
Proposition 40, a ballot measure proposing a one-time 5% tax on the assets of California residents worth over $1 billion, will be voted on November 3. If passed, the tax could impose a billions-dollar liability on Zuckerberg. Earlier this year, he informed Meta’s board he was considering relocating his primary residence outside the state to avoid the tax. The new deal was structured to address those concerns while ensuring Zuckerberg remains tied to Meta’s operations in California.
The agreement underscores the company’s efforts to balance financial flexibility with leadership stability. Meta’s board emphasized the importance of retaining Zuckerberg’s control over the company’s strategic direction, given his outsized voting power. The deal also reflects broader discussions about the impact of wealth taxes on high-net-worth individuals and corporate headquarters decisions in states with such policies.