Mark Zuckerberg considered selling his $110 million Palo Alto home over California’s proposed billionaire wealth tax. (Photo: Facebook/Splash News)
Meta CEO Mark Zuckerberg has struck a deal with the company to remain in California after reportedly warning that he could move out of the state if voters approve a proposed 5% wealth tax on billionaires. Most of Zuckerberg’s wealth is tied to his approximately 13% ownership stake in Meta, the parent company of Facebook and Instagram. The filing reportedly stated that selling enough of those shares to meet a substantial tax bill could reduce his voting interest to approximately 53%, potentially affecting his control of Meta. As reported by Reuters, Meta plans to issue a new class of non-voting Class C common stock in January 2027. Under the agreement, Zuckerberg can immediately sell 20% of the Class C shares he receives. Those shares represent approximately 10% of his overall economic stake in Meta, according to the Reuters report. The filing also indicated that Meta could need to raise hundreds of billions of dollars over several years, beginning as early as autumn 2026, to support its long-term growth plans. California Post reported that Zuckerberg had discussed selling his Palo Alto compound, estimated to be worth $110 million, as part of plans to establish residency outside California. He told directors that he would need to begin taking steps by mid-September to establish residency elsewhere by mid-October, ahead of the November 3 election, according to the publication. The report also said Zuckerberg’s lawyers sent a letter to a special committee of Meta’s board on August 3 seeking changes to his compensation arrangements, including measures to improve his access to liquidity in the event of a substantial tax bill. California Post cited a recent poll showing 46% of respondents supporting the tax and 43% opposing it, suggesting that the proposal had yet to secure majority backing in that survey. Two other ballot measures backed by Brin, identified in the reports as Propositions 41 and 42, could also introduce restrictions affecting the proposed wealth tax if approved by voters. The disclosures about Zuckerberg’s negotiations came alongside Meta’s second-quarter earnings report, which showed a 26% year-on-year increase in revenue.
According to a Securities and Exchange Commission filing reported by Reuters and California Post, Zuckerberg raised concerns that the proposed levy could leave him facing a multibillion-dollar tax bill and potentially force him to sell shares in Meta.
Zuckerberg discussed the potential consequences with Meta’s directors, including lead independent director Robert M, according to the filing cited by California Post. He reportedly said the proposed tax could affect his ability to remain a California resident and meet any tax obligation if the measure became law. The company said the new share structure would also support acquisitions, help retain key employees and provide capital flexibility as Meta continues investing in artificial intelligence.
Kimmitt. His Class B shares carry enhanced voting rights, allowing him to retain control over the company despite owning a minority of its overall equity. The arrangement is intended to provide Zuckerberg with additional liquidity while preserving his voting control over the company. Meta’s board reportedly considered it critically important for Zuckerberg to remain in a leadership position as the company faces growing competition and the financial demands of its AI expansion. The discussions subsequently led to negotiations over a revised agreement intended to address his concerns while ensuring his continued leadership at Meta. Under the final arrangement, Zuckerberg has agreed to remain a resident of California, or another jurisdiction where Meta maintains its headquarters, unless significant unforeseen circumstances make it advisable for him to live elsewhere. Zuckerberg is not the only technology billionaire whose residency and finances have come under scrutiny amid the proposed tax. Google co-founder Sergey Brin has reportedly changed his residency to Nevada and spent substantial sums supporting efforts to defeat the measure. Former Google CEO Eric Schmidt and cryptocurrency entrepreneur Chris Larsen have also contributed significant amounts to campaigns opposing the proposal. The proposed tax has been championed by the Service Employees International Union-United Healthcare Workers West as a way to offset healthcare funding cuts at the federal level. However, the measure faces an uncertain electoral outcome. The company’s plans to introduce non-voting shares reflect its efforts to balance Zuckerberg’s long-term leadership and voting control with the need to raise capital for future investments.
The proposed California wealth tax, referred to as Proposition 40 in the reports, would impose a one-time 5% tax on the net worth of billionaires in the state if approved by voters. Zuckerberg, whose estimated net worth is around $240 billion, reportedly warned Meta’s board that the measure could expose him to a tax liability running into billions of dollars. The agreement will allow Zuckerberg to receive a new class of non-voting shares that he can sell to help cover a potential tax liability without significantly affecting his voting control of the company. In return, he has committed to remaining a resident of California, or any other jurisdiction where Meta maintains its corporate headquarters, for eight years, subject to certain exceptions. With artificial intelligence reshaping competition across the technology industry, Meta’s board has indicated that retaining Zuckerberg at the helm remains a priority as the company prepares for its next phase of growth. You use AI every day. Now get your AI Quotient. Take the AIQ test.