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Zuckerberg Secures Deal to Stay in California Amid Billionaire Tax Threat
· Confirmed
In Short: Meta CEO Mark Zuckerberg secured a deal with the company to help him pay a proposed California billionaire tax without losing control of Meta.
Meta CEO Mark Zuckerberg has secured a deal with the company to help him pay a proposed California billionaire tax without losing control of Meta, according to a Wednesday financial disclosure.
The deal allows Zuckerberg to sell or transfer up to 20% of Class C stock, ensuring his voting majority remains intact even if he has to pay the tax.
Proposition 40, which would impose a one-time 5% tax on the assets of California billionaires, has divided Democratic politicians, labor unions, and other groups.
Zuckerberg holds roughly 60% of voting power over Meta despite owning only about 13% of the company’s total shares due to Meta's dual-class share structure.
Zuckerberg’s continued leadership role in Meta and his presence at the company’s headquarters in California are critical for the company and the tech industry, according to a filing.
Supporters of the wealth tax proposal say fears that billionaires will flee the state are overblown, but the ultrawealthy have made moves to avoid paying the tax or are funding campaigns to defeat it.
Zuckerberg has received an annual salary of $1 since 2013, according to Meta's regulatory filings, and his net worth is estimated at around $240 billion.
The proposed tax could leave Zuckerberg facing an estimated $11 billion bill, prompting him to consider selling his Palo Alto compound and moving his primary residence outside California.
Zuckerberg’s deal with Meta offers a glimpse into how the ultrawealthy are bracing for the proposed tax, which targets the main way they make money through their investments.
Meta’s board said the stock deal would give Zuckerberg $20 billion in immediate liquidity to cover the tax by selling stock without losing control of the company.
Proposition 40 is aimed at levying a one-time 5% tax on the net worth of all of California's billionaires, targeting around 200 individuals who could raise $100 billion.
The agreement gives Zuckerberg even more shares in Meta to make up for the fraction of his fortune he may lose if the tax wins voter approval in November.
What this adds
This report adds details on Zuckerberg's deal with Meta to maintain his control over the company while potentially paying the proposed California billionaire tax.
The sources have not established whether Zuckerberg will ultimately decide to sell his Palo Alto compound or move his primary residence outside California.
The sources have not established the exact number of shares Zuckerberg will sell or transfer to cover the tax liability.
Background
Mark Zuckerberg secured a deal with a special committee of Meta to help him pay a proposed California billionaire tax without losing control of the company, according to a Wednesday financial disclosure.
Meta CEO Mark Zuckerberg secured a deal with a special committee of the company to help him pay a proposed California billionaire tax without losing control of Meta, according to a Wednesday financial disclosure.
What's confirmed
- SACRAMENTO, Calif. (AP) — Mark Zuckerberg made a deal with Meta's board to help him pay a proposed California tax on billionaires without losing his ownership stake in the company he founded, according to regulatory filings published this week.
- Zuckerberg is the sixth-richest person in the world with a net worth estimated at more than $220 billion, according to Forbes.
- Zuckerberg’s estimated net worth is about $239 billion, making him the 6th richest person in the world, according to Forbes.
- Meta CEO Mark Zuckerberg listens as President Donald Trump speaks in the East Room of the White House in Washington, Tuesday Sept.
- Most of his wealth is tied to his approximately 13% ownership stake in Meta, the parent company of Facebook and Instagram.
- “It will expand our funding tools and give us flexibility to invest behind the unprecedented momentum we’re seeing across every part of our business driven by AI,” Meta Chief Financial Officer Susan Li said on an earnings call.
What's still developing
- The Service Employees International Union-United Healthcare Workers West is backing the wealth tax proposal and says it applies to roughly 200 billionaires who have resided in California as of January 1, 2026, and could raise $100 billion.
- "I believe this is the first billionaire tax - meaning a wealth tax that is targeting a very extreme percentile of the wealth distribution," says Francesco Trebbi, a public policy professor at the University of California, Berkeley.
- One billionaire businessman says he's brought jobs to California, but the proposition made him feel "a little bit like I wasn't wanted".
- He launched Facebook from a Harvard dorm in 2004, took it public in 2012, renamed the company Meta in 2021, and remains its controlling shareholder through dual-class stock.
- 2008 — Becomes world’s youngest self-made billionaire (age 23) 2015 — Chan Zuckerberg Initiative pledge (99% of Meta stake over lifetimes) 2016–2018 — Cambridge Analytica scandal and congressional scrutiny 2023–2025 — Threads launch; Llama open-weight models; “Year of Efficiency” cost cuts then AI reinvestment Oct.
- The compromise came after Zuckerberg told the board he was considering selling his Palo Alto home last month in anticipation of the proposed tax.
- The company alluded to problems the company experienced during the Covid-19 pandemic, when Zuckerberg began working outside of the office and mostly from his large compound in Kauai, Hawaii.
- California is home to most of the US's technology giants and there are around 225 billionaires who reside in the state, according to the Americans for Tax Fairness campaign group.
- Meta said on Wednesday it planned to spend as much as $145bn this year on AI projects.
- With Zuckerberg leading the company's efforts to catch up in the AI race, Meta's board said it sees a future of "tremendous market opportunity" for the company.
- After a surge in hiring at Meta during the pandemic, a whistleblower scandal that led to renewed focus on child safety, and a refocus within the company to building out the "metaverse," which included renaming the company Meta from Facebook, the company began mass layoffs and restructuring.
- "dramatic and unprecedented transformation taking place in the tech industry and global economy related to artificial intelligence."
Sources
- BBClink
- CEO Todaylink
- Fox Businesslink
- Indiaweeklylink
- Los Angeles Timeslink
- Washington Examinerlink
- Ibtimeslink
- BBClink
- Ottumwacourierlink
- Economictimeslink
- Readtheprofilelink
- Businessinsiderlink
- Thetimestribunelink
- Thestarlink
- WarpBeat — background on Zuckerberg wins Meta deal to help him foot bill for possible California billionaire tax link
- WarpBeat — background on Zuckerberg Secures Meta Deal to Stay in California Amid Billionaire Tax Threat link
- Fox Business — video link