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’s deal with Meta offers another glimpse into how the ultrawealthy are bracing for the proposed tax, which targets the main way they make money, through their investments, instead of by raising taxes on the paycheck they receive from work. Other billionaires have taken a different approach by starting to cut ties with the state, including Google co-founders Sergey Brin and Larry Page. If passed by voters in the November 3 election, the measure would levy a one-time 5% tax on the wealth of Californians whose net worth exceeds $1 billion. Zuckerberg is the sixth-richest person in the world with a net worth estimated at more than $220 billion, according to Forbes. That would put his tax liability at more than $11 billion. The tax would apply to anyone with a primary residence in the state as of January 1, 2026. Zuckerberg has taken a salary of $1 each year since 2013 as Meta’s CEO. The company said the new stock he will be allowed to sell — representing 10% of his overall economic stake in the company — would help mitigate that.
Actions announced by the tech giant on Wednesday will keep Zuckerberg as the majority owner of the company — and also give him the ability to sell some of a new class of non-voting shares “for any reason,” including to pay potential bills from the wealth tax. The compromise came after Zuckerberg told the board he was considering selling his Palo Alto home last month in anticipation of the proposed tax. 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. A few hundred billionaires live in California, according to the nonpartisan Legislative Analyst’s Office. In its regulatory filings, Meta maintained that Zuckerberg would not receive additional compensation — and argued that he would “effectively be paying to serve as the Company’s chief executive officer while residing in California” if the state’s wealth tax is enacted. Beyond securing Zuckerberg’s future in California, Meta’s new class of shares is intended to boost the company’s ability to raise capital for its investments in artificial intelligence infrastructure, according to the filings. Meta also said it established the new shares for employee compensation and acquisitions, among other reasons.
