Meta CEO Mark Zuckerberg has agreed to remain in Silicon Valley for eight years, a decision that could expose him to a substantial one-time tax if California voters approve a contentious ballot measure next month, according to a company regulatory filing released Wednesday.
During a dinner with Meta board members on September 9, Zuckerberg told them he was considering leaving California because of the measure, Proposition 40, and planned to list his Palo Alto, California, home for sale four days later, the 109-page filing stated. The ballot proposal, which could face lawsuits even if voters approve it, calls for a one-time 5 percent tax on stock and other assets held by billionaires in the state as of January 2026.
Many wealthy individuals, including Zuckerberg, currently avoid significant tax obligations by borrowing against their shares and taking low salaries—in the case of the Meta CEO, $1 annually. Zuckerberg purchased a home in Florida this past February, the Wall Street Journal reported.
His potential move across state lines concerned a special committee of the board, whose members included attorney Robert Kimmitt, venture capitalist Charlie Songhurst, and DoorDash CEO Tony Xu. “The special committee was mindful about the difficulties the company faced during the COVID-19 pandemic when Zuckerberg could not be physically present with the company’s management team and did not want the company to face similar challenges going forward,” according to Wednesday’s filing.
Within days of the Meta board dinner, the special committee and Zuckerberg reached an agreement linking his ability to sell special company shares to his continued residence in California. It was finalized a week ago, and on Wednesday, Meta announced the details. Meta plans to create a new class of shares that hold no voting power. Selling these shares could help raise funds for Meta’s expensive investments in AI data centers without diluting Zuckerberg’s existing voting control.
All existing shareholders will receive the new nonvoting shares automatically in proportion to their existing holdings. Under what Meta called a “Founder Alignment Agreement” with Zuckerberg, he can sell 20 percent of those new shares to help pay any taxes he may owe. The remaining 80 percent would be available for sale in chunks over the next eight years as long as he remains in California. Any attempt to sell them early would require offloading some of his voting shares “unless there are material unforeseen circumstances that would render it prudent or advisable for Zuckerberg to reside elsewhere.”
Notably, the agreement specifies that Zuckerberg merely has to remain wherever Meta maintains its headquarters, so it is possible that both he and the company could move together to another state. A number of California companies have moved to Texas, Nevada, and other states in recent years. Google cofounders Sergey Brin and Larry Page are among the handful of billionaires widely believed to have left California over the potential tax.
But with much of the most pioneering AI development happening in Silicon Valley, leaving the city of Menlo Park could be difficult for the Meta board to accept. “The goal is to keep Zuckerberg continuing to lead the company from California and in close proximity to Meta Superintelligence Labs,” the filing stated, referring to the company unit behind its recent Muse AI models.
In the end, the exercise may have been for naught. Recent polling in California suggests that with about $129 million spent campaigning against Prop 40, it will fail to muster enough votes.
