Meta CEO Mark Zuckerberg has warned that he could leave California if voters approve a first-of-its-kind billionaire wealth tax on Nov. 3, according to a new regulatory filing from the company.
Zuckerberg told Meta that he was “evaluating relocating his primary residence outside California,” the filing said. Any move-related steps—including listing his California homes for sale—would become public and likely draw attention from Meta employees, potentially creating questions for the company’s management, it added.
With Zuckerberg’s proximity to Meta’s Menlo Park headquarters deemed “critically important” to the company’s performance, the board approved an unusual measure. It authorized a new class of nonvoting common stock that Zuckerberg could sell to generate cash for the tax if the measure passes.
Without the new arrangement, Zuckerberg might have needed to sell voting shares to cover the tax bill, weakening his control over Meta.
In exchange for the stock decision, Zuckerberg has told Meta that he will remain a California resident for eight years. Should the company relocate its headquarters to another state, he would move there as well, according to the filing.
The disclosure adds a major corporate dimension to the debate over Proposition 40, the proposed billionaire wealth tax appearing on California’s Nov. 3 ballot. The initiative would impose a one-time state levy of 5% on billionaire wealth. Based on the Bloomberg Billionaires Index estimate of Zuckerberg’s $247 billion fortune, his potential tax bill would be about $12.4 billion.
Meta said “it is critically important to keep Mr. Zuckerberg in a leadership position with our company” and for him to continue living in California and running Meta from its headquarters. The company said his continued presence is necessary to help steer performance during a period of “unprecedented challenge and competition” in the industry.
Proposition 40 is expected to raise $100 billion from California’s wealthiest residents, with the proceeds designated to strengthen the state’s healthcare system. Economists at Stanford University have questioned whether the plan could produce the opposite result, noting that some billionaires have already left California. Further departures, they said, could reduce both wealth-tax revenue and broader income-tax collections.
Nonvoting Class C shares
Meta’s proposed stock structure is intended to serve purposes beyond keeping Zuckerberg close to its headquarters, according to the filing.
The publicly traded, nonvoting Class C common stock is scheduled to take effect in January. Meta also plans to use the shares to help finance artificial-intelligence infrastructure, compensate employees, fund acquisitions and support other corporate needs.
“Meta plans to issue nonvoting shares to fund AI investments without diluting CEO Mark Zuckerberg’s control,” said Andrew Rocco, a stock strategist at Zacks Investment Research.
