Meta Platforms has reached an agreement with Mark Zuckerberg to keep him living in California for the next eight years, despite the Facebook CEO’s previous warnings that he might leave the state if voters approve a new wealth tax next month.
The deal announced on Wednesday will grant Zuckerberg non-voting shares that he can sell to cover a potential multi-billion-dollar tax bill, should Proposition 40 pass. In exchange, Zuckerberg commits to remaining a resident of California or wherever Meta’s headquarters are located for eight years.
Proposition 40 asks Californians to approve a one-time 5% tax on the state’s billionaires, a move that could affect Zuckerberg directly. The CEO, currently the world’s sixth-richest person with a net worth around $240 billion according to Forbes, had told Meta he was considering relocating his primary residence to avoid the tax liability.
The company’s filing said Zuckerberg could immediately sell 20% of the new Class C shares he receives, which would represent 10% of his overall economic stake. This would allow him to pay the tax without sacrificing his voting control over Meta.
Meta also announced it will issue a new class of non-voting Class C common stock in January 2027. This will effectively create a two-for-one stock split designed to fund acquisitions and retain top talent while preserving Zuckerberg’s control.
The company’s long-term forecasts indicate a need to raise “hundreds of billions of dollars” starting as early as fall 2026 to support its growth strategy in artificial intelligence. Meta described the current industry environment as an “unprecedented challenge and competition” driven by AI advancements.
A special committee of Meta’s board said it was “critically important” that Zuckerberg stay in a leadership role and continue managing the company from its California headquarters during this period.
California is home to an estimated 250 billionaires with a combined net worth exceeding $2 trillion. Political analysts say the outcome of Proposition 40 is uncertain, but Zuckerberg’s move points to the scale of potential financial impact on the state’s ultra-wealthy.
The new Class C shares Zuckerberg will receive do not carry voting rights, allowing him to sell some to cover taxes without losing influence over company decisions. This move comes as Meta prepares to navigate a costly expansion into AI technologies while maintaining tight leadership control.
Zuckerberg’s decision to stay in California under these terms reflects the company’s priority to keep its founder at the helm amid growing competition. The introduction of the non-voting shares and the residency commitment form part of a broader financial strategy to ensure Meta can raise the capital it sees necessary for its next phase of growth.
The arrangement also signals Zuckerberg’s calculated approach to managing his tax exposure while safeguarding his stake in the company. Meta’s announcement on Wednesday detailed these plans alongside the launch of the new share class, which will take effect in early 2027.
The outcome of California’s wealth tax ballot remains to be seen, but Meta’s move sets a precedent for how ultra-wealthy executives might respond to such measures in the future.
According to Joy Online.
