Financeupdated 1h ago2 min read
Meta Agrees With Mark Zuckerberg To Keep Him In California After Proposition 40 Threat
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
Meta reaches eight-year agreement to keep Zuckerberg living in California amid wealth tax. Zuckerberg will receive non-voting shares to cover possible wealth tax bill.
Save coverage image
Explore source coverage 5 source types
Directory totals describe our source library, not outlets checked for this story.
Deal after wealth tax threat
Meta entered an agreement with CEO Mark Zuckerberg to keep him living in California for eight years after Zuckerberg warned he was considering leaving the state if voters approved Proposition 40, the proposed billionaire wealth tax on the Nov. 3 ballot.
Meta said it would issue a new class of non-voting Class C common stock in January 2027 so Zuckerberg could sell shares to help cover a potential tax bill without relinquishing control of Meta.
Meta also said Zuckerberg was allowed to sell 20% of the Class C shares he receives, representing 10% of his overall economic stake, and it framed the arrangement as a way to preserve voting power while raising capital.
Meta’s filing described a commitment with an exception for "material unforeseen circumstances," and it tied the structure to the company’s need to finance its AI-related growth plan.
Meta’s special committee concluded it was "critically important" that Zuckerberg remain in a leadership role and continue to manage the company from its California headquarters.
How the shares protect control
Meta said Zuckerberg told its special committee he was considering moving his primary residence outside California because Proposition 40 could expose him to a massive tax liability, potentially forcing him to sell voting shares.
Meta said Proposition 40 would impose a one-time 5% tax on the wealth of California residents who own at least $1 billion in assets, and it described the measure as affecting about 250 businessmen with a fortune estimated at $2.3 trillion.
Meta said Zuckerberg could immediately sell 20% of the Class C shares he receives, and it said that would not affect his majority voting control.
Meta’s board and special committee negotiated terms that included a one-time dividend of one share of non-voting Class C stock for each Class A and Class B share, with the charter change taking effect Jan. 19, 2027.
Meta said the remaining 80% of the Class C shares was "stapled," requiring Zuckerberg to sell Class A or Class B shares or convert Class B to Class A for each share he sells.
Ballot stakes and broader fallout
Meta said the proposed wealth tax is aimed at raising $100 billion from the state's wealthiest residents, with the money earmarked for shoring up California's healthcare system. Meta’s filing and reporting around the deal placed the decision in the context of a public debate over Proposition 40, with the tax described as a one-time 5% state tax on billionaire wealth. Meta said it believed its board’s decision was necessary to keep Zuckerberg near its Menlo Park, California headquarters, which it described as "critically important" to its success.
“A group of billionaires has invested $300 million to campaign against the proposal.”
The reporting also said other billionaires, including Sergey Brin and David Sacks, announced they would leave California if the 5% wealth tax takes effect, and it described opposition that included a group of billionaires investing $300 million to campaign against the proposal. Meta’s structure also reflected the company’s view that it needed to raise "hundreds of billions of dollars" over several years, beginning as early as fall 2026, to finance its AI-related growth plan.