Meta CEO Mark Zuckerberg has agreed to remain a California resident for eight years after the company's board approved an unusual measure to address his concerns about a proposed state billionaire wealth tax. According to Meta's regulatory filing, Zuckerberg initially threatened to relocate his primary residence outside California over the tax proposal, known as Proposition 40, which voters will decide on November 3. The company said in its filing that any steps toward relocation, including listing residential real estate for sale, would be public and likely raise questions among employees and management.
To keep Zuckerberg in place, Meta's board created a new class of nonvoting common stock that allows him to raise cash to pay the wealth tax without selling voting shares that would dilute his control of the company. The filing stated that Meta considers Zuckerberg's presence near the company's Menlo Park headquarters 'critically important' to its success. If Meta relocates its headquarters to another state, Zuckerberg committed to moving to that jurisdiction. The new stock class, set to take effect in January, will become publicly traded and is intended to help the company raise capital for artificial intelligence infrastructure investments, compensate employees, fund acquisitions and serve other corporate purposes, according to Meta's filing.
Proposition 40 would impose a one-time 5% tax on billionaire wealth in California. Based on the Bloomberg Billionaires Index, Zuckerberg's estimated net worth is $247 billion, which would result in approximately $12.4 billion owed under the tax. The proposal aims to raise $100 billion from the state's wealthiest residents, with proceeds earmarked for California's healthcare system. Stanford University economists have expressed concerns that the tax could backfire, noting that several billionaires have already moved out of California, potentially resulting in lower projected wealth tax revenues and reduced overall income tax collections.
For California savers, borrowers, business owners and investors, Zuckerberg's decision to stay means Meta's headquarters and employment base remain anchored in the state, though the wealth tax's actual impact depends on voter approval.