Zuckerberg reaches deal with Meta to address California billionaire tax proposal
Mark Zuckerberg and Meta have agreed to issue a new class of non-voting shares that could be sold to meet a potential California wealth tax, while keeping his majority ownership and committing to remain in the state for eight years.
Mark Zuckerberg has arranged with Meta’s board to create a new class of non-voting shares that can be sold to cover a possible California wealth-tax bill, according to regulatory filings released this week. The measure, which would appear on the Nov. 3 ballot, proposes a one-time 5% levy on the net worth of Californians with assets above $1 billion, potentially costing Zuckerberg more than $11 billion.
The deal allows Zuckerberg to retain his majority stake in Meta while giving him the option to sell up to 10% of his economic interest in the company to meet any tax liability. In return, he has pledged to stay in California for eight years, unless “material unforeseen circumstances” arise that make relocation prudent.
"This is the nail in the coffin to months of scare tactics claiming that billionaires are fleeing California," Suzanne Jimenez, chief of staff for SEIU United Healthcare Workers West, said in a statement, citing the agreement as evidence that opponents of the tax are wrong.
The proposed tax would apply to anyone whose primary residence is in California as of Jan. 1, 2026, and would direct most of the revenue to offset federal cuts to health care, with 10% earmarked for education and food-assistance programs. Critics, including Governor Gavin Newsom, warn the tax could drive wealthy residents out of the state, potentially shrinking the tax base.
Meta’s filing also notes that the new share class is intended to broaden the company’s financing options, particularly for investments in artificial-intelligence infrastructure.
"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.
Zuckerberg has taken a $1 annual salary as Meta’s CEO since 2013, and the company stated that the share sale would not constitute additional compensation but rather a means for him to meet any state tax obligations while continuing to lead the firm.