Meta Strikes Deal to Keep Zuckerberg in California Ahead of Billionaire Tax Vote

Meta has agreed to give CEO Mark Zuckerberg a new class of non-voting shares that he could sell to pay a possible California wealth tax, in exchange for a commitment to stay in the state for eight years, Fox Business reported, citing Reuters.

The deal comes as California voters prepare to decide in November on Proposition 40, a ballot initiative that would impose a one-time tax equal to 5% of net worth on billionaires who were California residents on Jan. 1, 2026.

What Meta and Zuckerberg agreed to

According to Reuters, Zuckerberg will receive non-voting shares in return for committing to remain a resident of California, or of the state where Meta has its headquarters, for eight years. He had earlier told the company he was weighing a move of his primary residence out of California because of the proposed tax, Fox Business reported.

Reuters reported that Zuckerberg can immediately sell 20% of the Class C shares he receives. That amounts to 10% of his overall economic stake in the company, and it could let him cover a tax bill without giving up voting control.

Meta said Wednesday that it plans to issue the new class of non-voting Class C common stock in January 2027. The company said the shares are meant to help fund acquisitions and keep top talent while preserving Zuckerberg's control.

How Meta explains the move

In a statement to Fox Business, Meta pointed to remarks by Chief Financial Officer Susan Li on the company's third-quarter earnings call. Li said the new stock is designed for raising capital, paying employees, making acquisitions and other general corporate purposes, while keeping the voting power of existing Class A and Class B shareholders intact.

Meta also said the decision followed a unanimous recommendation from a special committee of independent directors. According to a company filing, the committee stressed that Zuckerberg's presence in California supports close coordination with management and proximity to Meta's Superintelligence Labs.

What the proposed tax would mean

Forbes puts Zuckerberg's net worth close to $250 billion and ranks him as the world's sixth-richest person, according to Fox Business. A tax of 5% of net worth could therefore produce a very large bill, one that might force him to sell company shares.

If voters approve the measure in November, the tax would be due in 2027. Payments could be spread over five years at an additional cost. Real estate, pensions and retirement accounts would generally be excluded.

What it means for California's finances

California's nonpartisan Legislative Analyst's Office said some billionaires may leave the state in response to the tax, which could cut the income tax revenue they generate. The office estimated that departures and other changes in behavior could reduce state income tax revenue by less than $1 billion a year. It also estimated that the wealth tax could raise tens of billions of dollars over several years.

For most Californians the tax would not apply directly, since it targets billionaires. The practical stakes are the public revenue the state could collect and whether the wealthiest residents stay to pay it.

The political fight over Proposition 40

The California Democratic Party has endorsed the measure, though Gov. Gavin Newsom and some other prominent Democrats oppose it, Fox Business reported.

Economist Art Laffer, a former economic adviser to President Ronald Reagan, has warned that the tax could speed up an exodus of California's wealthiest residents. He argued that billionaires have stayed because state income taxes affect them little, while this tax would hit them directly.

California entrepreneur Eric Schiffer, chairman of the family office Patriarch, told Fox Business earlier that passage could push wealthy entrepreneurs to leave the state.

What happens next

Voters will decide on Proposition 40 in November. Meta plans to issue the new Class C shares in January 2027, and the tax, if approved, would come due in 2027.

Around Prague, based on reporting by Fox Business