Meta has reached an agreement with Mark Zuckerberg to safeguard him from a potential California wealth tax aimed at billionaires. The announcement was made on Wednesday night, confirming that the deal will allow Zuckerberg to continue residing in California, where Meta's headquarters are located.
Details of the Agreement
Under the terms of the deal, Zuckerberg will receive new shares that could be sold to cover a multibillion-dollar tax bill if California implements a one-time billionaire tax. In exchange, he has committed to remain a resident of California, or wherever Meta maintains its base, for a period of eight years.
Proposition 40
Californians are set to vote early next month on Proposition 40, which proposes a one-time 5% tax on approximately 250 billionaires residing in the state. Zuckerberg, whose net worth is estimated at $239 billion by Forbes, expressed concerns about moving his primary residence due to the potential tax liability from Prop 40, which could compel him to sell voting shares to meet the tax obligations.
In response to these concerns, Meta is creating a new class of non-voting shares through a two-for-one stock split for all existing shareholders. This strategy will enable Zuckerberg to sell some of the new Class C shares to cover any potential tax bill without diminishing his control over the company.
