Mark Zuckerberg reaches deal to stay in California over proposed tax
Meta CEO Mark Zuckerberg secured a deal with a special committee to prevent his departure from California over a proposed state tax on billionaires. The agreement allows Zuckerberg to sell shares without losing voting control of the company if he faces a multi-billion-dollar tax liability under Proposition 40.
The Stock Structure Behind the Deal
To keep the chief executive in California, Meta announced it would issue a new class of non-voting Class C stock through a one-for-one stock dividend distributed to all shareholders. The arrangement lets Zuckerberg sell up to half his economic stake in the firm without diluting his voting control. Zuckerberg agreed to drop a separate pay request, maintain his $1 salary, and commit to staying in California or wherever Meta maintains its headquarters for eight years. The negotiations between Zuckerberg and a special committee were described in regulatory filings as thorough and contentious at times.
Zuckerberg told the board he was evaluating relocating his primary residence outside California. He noted that listing his home on the real estate market would become public and inevitably raise questions for management among company employees. Under the SEC regulatory filing, the special committee deemed it critically important to keep Zuckerberg leading the firm from its headquarters during a period of intense competition and heavy spending on artificial intelligence infrastructure.
Tech Leaders Oppose Proposed Tax on Billionaires
Californians will vote on November 3 on Proposition 40, a one-time 5% tax on state residents with a net worth exceeding $1 billion. The Americans for Tax Fairness campaign group estimates that about 225 billionaires reside in California, which hosts the majority of major United States technology companies. The Bloomberg Billionaires Index lists Zuckerberg’s net worth at $246 billion, placing him fifth.
The state measure has drawn heavy financial opposition from tech leaders, including Google co-founder Sergey Brin, Palantir co-founder Peter Thiel, and former Google CEO Eric Schmidt. Recent polling shows the measure falling short of majority support among voters. US Representative Rohit Khanna defended the proposed tax in a public essay, framing it as a choice between working people and oligarchs.
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NEW —The extraordinary story of how Mark Zuckerberg wheeled and dealed to get Meta’s board of directors to protect him from California’s wealth tax.With @elitanjourno https://t.co/ZYnxhazGDo
This is huge.A just-released SEC filing makes an extraordinary revelation: Mark Zuckerberg is getting ready to pay California’s 5% billionaire wealth tax and has signed an agreement to remain in California for 8 years.We are witnessing a global turning point unfold before our… pic.twitter.com/Wmg5dGxyi2