Meta share deal ties Zuckerberg to California amid wealth tax vote

On Wednesday, Meta announced a new deal with its founder and CEO Mark Zuckerberg. The agreement entails Zuckerberg receiving a fresh allocation of shares in Meta, while he commits to residing in California for another eight years. The company disclosed this news in a securities filing alongside its latest quarterly earnings report. This arrangement aims to incentivize Zuckerberg to stay in California, where voters will soon decide on a wealth tax proposal, known as Proposition 40, set to appear on the November ballot.

Meta's securities filing revealed that Zuckerberg currently owns over 342 million Meta shares, most of which are enhanced voting shares. This ownership gives him control exceeding 60% of the company. Despite this substantial influence, Meta expressed concern that Zuckerberg's voting power could be reduced to around 53% if he were to part with a significant portion of his shares to fulfill potential tax obligations under Proposition 40.

The proposed tax, if passed, would impose a 5% levy on billionaires and allocate 90% of the funds towards healthcare services.

Meta reasoned that by structuring the deal in this manner, Zuckerberg would maintain a measure of voting power, even if he had to sell a substantial chunk of his shares to cover increased tax liabilities. The proposed tax, should it be approved by California voters, could result in a multibillion-dollar financial burden for the company's wealthiest shareholder.

In a related development, tech magnate and Meta competitor Nvidia CEO Jensen Huang dismissed the prospect of the tax, stating, "I'm not afraid of paying taxes, even if that means an $8 billion tax bill."