Meta moves to keep Zuckerberg in California amid wealth tax risk

Skip to Content News Archives Economy Defence Energy Oil & Gas Renewables Electric Vehicles Mining Commodities Agriculture Real Estate Mortgages Mortgage Rates Finance Banking Insurance Fintech Cryptocurrency Defence Work Wealth Smart Money Wealth Management Investor Personal Finance Family Finance Retirement Taxes High Net Worth FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials More Innovation Information Technology FP500 Podcasts Small Business Lives Told Tails Told Shopping Financial Post Store Obituaries Place a Notice Advertising Advertising With Us Advertising Solutions Postmedia Ad Manager Sponsorship Requests Classifieds Place a Classifieds ad Working Profile Settings My Subscriptions My Offers Newsletters Customer Service FAQ News Economy Energy Mining Real Estate Finance Defence Work Wealth Investor FP Comment Executive Women Puzzmo Newsletters Financial Times Business Essentials This advertisement has not loaded yet, but your article continues below.HomePersonal FinanceTaxesMeta moves to keep Zuckerberg in California amid wealth tax riskThe company is giving him non-voting shares that he can sell to cover a multibillion-dollar tax billAuthor of the article:Felipe Marques and Ed LudlowMark Zuckerberg, chief executive of Meta Platforms Inc., reveals the Muse Charm device during the Meta Connect event in Menlo Park, Calif. on Sept. 23, 2026. Photo by Minh Connors/BloombergWe independently select everything we recommend. Buying through us may earn us a commission, which supports our work.Meta Platforms Inc. is taking no chances that Mark Zuckerberg ends up living far away from the company he co-founded.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountAfter Zuckerberg warned that a proposed California wealth tax could push him to leave the state, Meta struck an unusual bargain with its billionaire chief executive. The company is giving him non-voting shares that he can sell to cover a multibillion-dollar tax bill without relinquishing control of Meta.This advertisement has not loaded yet, but your article continues below.In return, Zuckerberg has committed to staying in California — or wherever Meta keeps its headquarters — for the next eight years while he remains a full-time leader.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againThe arrangement, outlined in a Wednesday filing, shows how an effort to tax some of Silicon Valley’s largest fortunes is rippling to the corporate world. Billionaires such as Sergey Brin and David Sacks have taken steps to leave California, fueling criticism that the one-time five per cent levy, which will be put to a vote in November, would drive away some of the state’s wealthiest individuals.Meta’s deal offers a striking counterpoint: Rather than watch Zuckerberg leave, the company created a financial incentive for him to stay.A special committee charged with negotiating the agreement said having Zuckerberg work from the company’s headquarters was “critically important,” particularly as the intensifying race over artificial intelligence has him collaborating closely with Meta Superintelligence Labs.The committee pointed out to the “difficulties” the company faced during the COVID-19 pandemic, when Zuckerberg was away from the management team, and said it wanted to avoid similar challenges.This advertisement has not loaded yet, but your article continues below.Zuckerberg, the world’s fifth-richest person, is worth US$247 billion, according to the Bloomberg Billionaires Index. The billionaire tax could leave him owing a multibillion-dollar bill and potentially force him to sell some of the voting shares that underpin his control of Meta, the company said on a filing.That possibility had been worrying Zuckerberg — and Meta’s board — for months.The subject came up in July, when Zuckerberg briefly discussed the upcoming election with Robert M. Kimmitt, Meta’s lead independent director, according to the filing. Zuckerberg warned that the proposed tax could force him to sell his Class B common stock, leaving him with less than 53 per cent voting interest in the company.Within weeks, Zuckerberg’s legal counsel sent a letter to the board’s special committee saying he was considering leaving California because of the billionaire tax. He proposed also creating a class of non-voting stock, which would give Meta another way to raise the enormous sums of capital needed for its AI ambitions.The letter went further, asking the committee to discuss a revised compensation arrangement “comparable to those recently approved for other founders of a similar profile and importance to their companies,” consisting of equity grants tied to performance benchmarks, according to the filing.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.The arrangement that emerged allowed Meta to address two problems at once.Zuckerberg sought flexibility to raise money without weakening his grip on the company. Meanwhile, Meta got another way to finance its expensive AI buildout and give its founder a powerful incentive to stick around.Meta’s Chief Financial Officer Susan Li said during the company’s quarterly earnings call that the new non-voting stock would primarily serve as a financing tool, giving Meta greater flexibility to fund its AI ambitions without diluting voting power. She didn’t mention the Zuckerberg-specific elements detailed in the filing.Under the agreement, Zuckerberg can immediately sell 20 per cent of the non-voting Class C shares he receives, the equivalent to 10 per cent of his overall economic stake. That would give him liquidity to help cover a potential tax bill triggered by Proposition 40, the ballot measure that would allow the billionaire tax, if enacted into law.While the remaining 80 per cent of the Class C stock is initially restricted, those limits gradually lapse over eight years as long as Zuckerberg continues leading the company.This advertisement has not loaded yet, but your article continues below.Whether Zuckerberg will ultimately have to face the tax will depend on Californians. Recent polls show voters split over Proposition 40, which was pitched by a healthcare workers union as a way to backfill federal cuts. Governor Gavin Newsom opposes the measure, which would impact people whose net worth exceeded US$1 billion on Jan. 1, 2026.A group of billionaires has spent roughly US$300 million to defeat the proposal, led by Google co-founder Brin, who now lists Nevada as his address in campaign donation filings.But even if Zuckerberg keeps his main residence in California, the 42-year-old billionaire has a growing portfolio of homes elsewhere.Earlier this year, he paid US$170 million for a Miami mansion, setting a record for that market. Besides houses in Palo Alto and near Lake Tahoe, Zuckerberg owns properties in Washington, DC, and Kauai, the Hawaiian island.With assistance from Jenny Surane and Kristine OwramThis advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.