NewzOct 21 (Reuters) - Meta Platforms has struck a deal with Mark Zuckerberg to keep him living in California after the CEO warned he was considering leaving the state that houses the company's headquarters if voters pass a wealth tax proposal next month. Meta Platforms has struck a deal with Mark Zuckerberg to keep him in California after the CEO warned he was considering leaving the state that houses the company’s headquarters if voters pass a wealth tax proposal next month. Under the deal, Zuckerberg will receive non-voting shares he can sell to potentially cover a multi-billion-dollar tax bill if the proposal passes, in exchange for committing to remain a resident of California, or wherever Meta maintains its headquarters, for eight years, Meta said on Wednesday.
Zuckerberg, the world’s sixth-richest person according to Forbes, told Meta he was considering moving his primary residence outside California because Proposition 40, a ballot measure dubbed the “California wealth tax”, could expose him to a massive tax liability, potentially forcing him to sell voting shares to pay it. Proposition 40, which asks Californians whether to impose a one-time 5% tax on the state’s billionaires, is far from certain to pass, political analysts say. The state is home to as many as 250 billionaires collectively worth upwards of $2 trillion.
Zuckerberg, who has a net worth of about $240 billion, can immediately sell 20% of the Class C shares he receives, representing 10% of his overall economic stake in the company, allowing him to pay a potential tax bill without losing voting control. The company said on Wednesday it will issue a new class of non-voting Class C common stock in January 2027, effectively creating a two-for-one split, to fund acquisitions and retain top talent while maintaining Zuckerberg’s control. Meta’s long-term forecasts, as described in the filing, showed it would need to raise “hundreds of billions of dollars” over several years, beginning as early as fall 2026, to finance its AI-related growth plan.
Facebook and Instagram’s parent company said a special committee of its board concluded it was “critically important” that Zuckerberg remain in a leadership role and continue to manage the company from its California headquarters, particularly during what it described as an “unprecedented challenge and competition in our industry” driven by AI. Mark Zuckerberg owned more than 342 million Meta shares at the end of 2025, mostly carrying enhanced voting rights that effectively gave him over 60% control of the company. (EPA Images pic)SAN FRANCISCO: Meta CEO Mark Zuckerberg will get a new chunk of shares in the company he founded, and in return, he has agreed to stay in California, where the company is headquartered, for at least eight more years.It's partly a financial carrot intended to keep Zuckerberg in California, where voters in November will decide whether to approve a temporary tax on wealth held by billionaires who reside in the state.Meta announced the deal on Wednesday in a securities filing that coincided with its quarterly earnings report, where it said it would offer a new class of nonvoting shares and give all existing shareholders a one-time bump for every share they own.That includes Zuckerberg, who owned more than 342 million Meta shares at the end of 2025, most of which are considered super-voting shares, effectively giving him more than 60 percent control over the company, according to a filing related to its annual report.In a securities filing, Meta expressed concern that Zuckerberg's voting power "could drop to approximately 53% or lower" if he has to sell a significant portion of his shares to pay increased taxes.The deal is structured to give Zuckerberg the ability to sell shares without significantly diluting his voting power, in case California voters approve the tax measure known as Proposition 40, which could trigger "a significant, multibillion-dollar tax payment based on his ownership" in Meta, the company said in the filing.There are an estimated 39 million people who live in California.
Of those, "a few hundred" have net worths of US$1 billion or more, according to the California Legislative Analyst's Office, which is a nonpartisan agency.If approved by voters, Proposition 40 would impose a one-time 5% tax on billionaires, with 90% of the proceeds earmarked for health care services.Some of the state's billionaires have preemptively relocated elsewhere, including Google founders Sergey Brin and Larry Page, and PayPal and Palantir co-founder Peter Thiel, according to Politico.By contrast, Nvidia CEO Jensen Huang has brushed off concerns."I don't mind paying taxes; the more you make, the more taxes you pay, so I'm okay with that," Huang told CBS News on Sunday."I'm not af…
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