Mark Zuckerberg has 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, the Associated Press reported from Sacramento.
Source: Associated Press via KCAU 9
If voters pass the measure in the November 3 election, it 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 — yaani more than 220 arab dollars — which would put his tax liability at more than $11 billion.
Actions announced by the tech giant on Wednesday will keep Zuckerberg as the company's majority owner and 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. Meta said the new stock he will be allowed to sell represents 10% of his overall economic stake in the company.
The compromise came after Zuckerberg told the board he was considering selling his Palo Alto home last month in anticipation of the proposed tax. 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 tax aimed at wealth, not salary
A few hundred billionaires live in California, according to the nonpartisan Legislative Analyst's Office, and the tax would apply to anyone with a primary residence in the state as of January 1, 2026. Most of the money would be used to backfill federal funding cuts to healthcare, with 10% going toward education and food-assistance programs.
Proponents, including SEIU United Healthcare Workers West and Vermont Senator Bernie Sanders, say the tax would help ensure the ultra-rich pay their fair share. The union said the Zuckerberg deal proves opponents wrong: 'This is the nail in the coffin to months of scare tactics claiming that billionaires are fleeing California,' Suzanne Jimenez, the union's chief of staff, said in a statement.
Opponents, including California Governor Gavin Newsom, a Democrat, have warned the tax could prompt the state's wealthiest residents to leave, causing budget problems because the state relies heavily on the rich for income tax revenue. AP reported that other billionaires have taken a different approach from Zuckerberg: Google co-founders Sergey Brin and Larry Page have begun cutting ties with the state, and Brin and other tech figures have poured millions into a political action committee opposing the tax.
Zuckerberg has taken a salary of $1 a year since 2013 as Meta's CEO. In its filings, Meta argued that he would 'effectively be paying to serve as the Company's chief executive officer while residing in California' if the wealth tax is enacted, and said the new shares would help mitigate that. Beyond the tax question, Meta said the new class of shares is intended to raise capital for its artificial intelligence infrastructure investments and to fund employee compensation and acquisitions. '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.
Bloomberg Law also reported the arrangement on October 22, describing non-voting shares Zuckerberg can sell to cover a multibillion-dollar tax bill without relinquishing control, in return for his commitment to stay in California — or wherever Meta keeps its headquarters — for the next eight years while he remains its full-time leader.
Source: Bloomberg Law