Mark Zuckerberg has reached an agreement with Meta's board that will allow him to pay a proposed California tax on billionaires without relinquishing his ownership stake in the company, according to regulatory filings.
The wealth tax measure is on the California ballot for the election concluding November 3. If approved, it would impose a one-time 5% tax on the net worth of Californians exceeding $1 billion. Zuckerberg, with an estimated net worth surpassing $220 billion, could face a tax liability exceeding $11 billion under the proposal.
The tech giant's recent actions enable Zuckerberg to maintain his majority ownership and provide him the flexibility to sell a new class of non-voting shares for any reason, including to cover potential tax obligations. This development follows Zuckerberg's initial consideration of selling his Palo Alto home in anticipation of the tax. He has since committed to residing in California for eight years, barring unforeseen circumstances that necessitate relocation.
Meta did not immediately comment on the arrangement.
California is home to several hundred billionaires, according to the Legislative Analyst’s Office. The proposed tax would affect individuals with a primary residence in the state as of January 1, 2026. Revenue generated from the tax is earmarked for backfilling federal funding cuts in healthcare, with 10% allocated to education and food assistance programs. Proponents, including SEIU United Healthcare Workers West and Senator Bernie Sanders, argue the tax ensures the ultra-wealthy contribute their fair share.
Conversely, opponents, such as Governor Gavin Newsom, have expressed concerns that the tax could encourage wealthy residents to leave the state, potentially impacting state budget revenues derived from income taxes paid by high earners.
Suzanne Jimenez, chief of staff for SEIU United Healthcare Workers West, stated that Zuckerberg's deal counters claims that billionaires are leaving California. "This is the nail in the coffin to months of scare tactics claiming that billionaires are fleeing California," she said.
The deal offers insight into how some of the wealthiest individuals might be preparing for the proposed tax, which targets wealth derived from investments rather than salary income. Other billionaires have taken different actions, such as Google co-founders Sergey Brin and Larry Page, who have begun to disassociate from the state.
Brin and other tech figures have contributed significantly to a political committee opposing the wealth tax. The committee, Building a Better California, has amassed over $333 million, with Brin providing 30% of those funds. In contrast, the campaign supporting the tax, "Yes on 40," has raised $32.7 million.
Beyond addressing Zuckerberg's California residency, Meta's creation of a new class of non-voting shares is intended to enhance the company's capacity to raise capital for its investments in artificial intelligence infrastructure.
Zuckerberg has drawn a $1 annual salary as Meta's CEO since 2013. Meta has stated that he will not receive additional compensation and that he would