Meta Platforms has reached an agreement with its chief executive, Mark Zuckerberg, to keep him residing in California for the next eight years amid concerns over a proposed wealth tax targeting billionaires in the state.
Under the arrangement, Zuckerberg will receive non-voting shares that he can sell to raise funds to cover a potential multibillion-dollar tax bill if voters approve the proposed measure next month.
In return, he has committed to maintaining his residence in California, or wherever Meta’s headquarters is located, for eight years, the company said on Wednesday.
Zuckerberg, ranked the world’s sixth-richest person by Forbes, had reportedly considered moving his primary residence outside California because of Proposition 40, a ballot initiative seeking to impose a one-time 5 per cent tax on the wealth of billionaires living in the state.
The proposal could expose Zuckerberg to a substantial tax liability, potentially requiring him to sell voting shares in Meta to meet his obligations.
However, political analysts say the measure’s passage remains uncertain.
California is home to as many as 250 billionaires, whose combined wealth exceeds $2 trillion.
Zuckerberg, whose net worth is estimated at approximately $240 billion, will be able to immediately sell 20 per cent of the Class C shares allocated to him.
The shares represent 10 per cent of his overall economic stake in Meta and would provide funds to settle a potential tax bill without compromising his voting control of the company.
Meta announced on Wednesday that it would introduce a new class of non-voting Class C common stock in January 2027.
The move will effectively create a two-for-one stock split and is intended to support acquisitions and help the company retain key employees while preserving Zuckerberg’s control.
The company’s long-term financial projections indicate that it may need to raise “hundreds of billions of dollars” over several years, potentially beginning in the autumn of 2026, to finance its artificial intelligence expansion plans.
Meta, which owns Facebook and Instagram, said a special committee of its board had determined that retaining Zuckerberg in a leadership position was “critically important” to the company’s future.
The committee also emphasised the importance of having him continue to oversee the business from its California headquarters amid what Meta described as “unprecedented challenge and competition in our industry” driven by artificial intelligence.
The agreement comes as Meta prepares for significant investments in AI development and faces increasing competition across the technology sector.
