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Zuckerberg wins Meta deal to help him foot bill for possible California billionaire tax
Confirmed
In Short: 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.
The agreement gives Zuckerberg, whose wealth is estimated at over $200 billion, 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.
Zuckerberg told the company he was considering moving his primary residence out of California because of 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.
The deal allows Zuckerberg to sell 20% of the Class C shares he receives, representing 10% of his overall economic stake in the company, potentially allowing him to pay the tax without giving up voting control.
The compromise came after Zuckerberg told the board he was considering selling his Palo Alto home last month in anticipation of the proposed tax.
Zuckerberg’s estimated net worth is about $239 billion, making him the 6th richest person in the world, according to Forbes. If the tax is approved, his tax liability could be more than $11 billion.
The agreement also includes a commitment from Zuckerberg to remain a resident of California for eight years, unless “material unforeseen circumstances” arise that make it “prudent or advisable for him to reside elsewhere.”
Meta said it plans to spend as much as $145 billion this year on AI projects, with Zuckerberg leading the company's efforts to catch up in the AI race.
The company reported revenue of $64.6 billion for the third quarter, up 26% from the same period last year.
Entities linked to Zuckerberg and his wife, Priscilla Chan, which hold a majority of the votes, approved the change, so no shareholder vote is needed.
Zuckerberg told Meta's board last month that he was considering moving his primary residence out of California and even selling his property in the state.
The Service Employees International Union-United Healthcare Workers West is backing the wealth tax proposal, which applies to roughly 200 billionaires who have resided in California as of January 1, 2026, and could raise $100 billion.
Proposition 40, the so-called California Billionaire Tax Act, would impose a one-time 5 percent charge on billionaires' net worth.
What's confirmed
- He secured the deal with a special committee of Meta after "robust" and "at several points, contentious" negotiations, according to a Wednesday financial disclosure.
- 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.
- The agreement gives Zuckerberg, whose wealth is estimated to exceed $200bn (£149bn), 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.
- Meta said on Wednesday it planned to spend as much as $145bn this year on AI projects.
- Zuckerberg, Meta's CEO, previously told the company he was considering moving his primary residence outside California because of 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, if approved.
- 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.
- The compromise came after Zuckerberg told the board he was considering selling his Palo Alto home last month in anticipation of the proposed tax.
- That would put his tax liability at more than $11 billion.
- But he later struck the deal and committed to staying in California for eight years, unless “material unforeseen circumstances” arise that make it “prudent or advisable for him to reside elsewhere,” according to the filings.
- 29, 2026, during a meeting with top executives of AI firms.
What's still developing
- 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.
- But the 42-year-old tech mogul considered leaving the state because he feared that a ballot measure to impose a one-time 5% tax on the assets of California billionaires could reduce the amount of control he has over Meta, a recent regulatory filing shows.
- “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.
- Meta CEO Mark Zuckerberg listens as President Donald Trump speaks in the East Room of the White House in Washington, Tuesday Sept.
- Proponents say it would help ensure the ultra-rich pay their fair share.
- “The goal is to keep Mr. Zuckerberg continuing to lead the Company from California and in close proximity to Meta Superintelligence Labs. In light of that importance, the Special Committee secured Mr. Zuckerberg’s commitment to remain a resident of California, or any other jurisdiction in which the Company maintains its corporate headquarters, for eight years from the date of the Founder Alignment Agreement,” Meta wrote in the filing.
- The tech giant's board said in a securities filing Wednesday that it would create a new class of non-voting stock in part to keep Zuckerberg in control and give him a financial incentive to continue living near its headquarters.
- Billionaire Louis Bacon's Panama foundation is backing the fight against American developer John McKeown's planned $250 million port beside protected mangroves.
- During Meta’s earnings call on Wednesday, the company revealed its board had approved a new class of nonvoting stock, called Class C common stock.
- Meta says it will use the stock for capital raising, employee pay, and acquisitions — including its expensive push into AI — while maintaining the current voting structure that favors its founder and CEO, Mark Zuckerberg, who controls around 60% of the vote.
- Becerra has called Prop. 40 "sketchy" and argued the state needs a long-term solution to address health care funding challenges Opponents of Proposition 40 qualified Props 41 and 42 for the November ballot as countermeasures to the billionaire tax, potentially preventing it from taking effect even if it passes. "If passed, Prop 41 would nullify any new state taxes enacted after Jan. 1, 2026 that do not count toward California's spending cap."
- Nearly a decade after shipping billionaire Chang Yung-fa died, his foundation is pursuing his heirs and estate executors over a disputed charitable commitment worth NT$1 billion.