Meta strikes deal to keep Zuckerberg in California after wealth tax concerns

Meta Platforms, the parent company of Facebook and Instagram, has reached an agreement with CEO Mark Zuckerberg to ensure he remains a California resident for eight years following concerns over a proposed wealth tax. Zuckerberg expressed worries that the proposed Proposition 40, a ballot measure aimed at imposing a 5% tax on billionaires, could force him to sell shares and pay a substantial tax bill, potentially requiring him to relinquish voting control.

To address this, Zuckerberg will receive non-voting shares, which he can sell to cover potential tax liabilities. In return, Meta agreed to issue a new class of non-voting Class C common stock in January 2027, effectively splitting shares two-for-one, to fund acquisitions and retain top talent while preserving Zuckerberg's control.

The company stated that it is crucial for Zuckerberg to continue leading the company from California's headquarters amidst the current challenges and competition in the industry, particularly driven by AI.