Meta agrees deal to keep Zuckerberg in California
?s chief executive Mark Zuckerberg agreed to remain in California for eight years under a deal tied to the sale of a new class of nonvoting shares. The…
Meta agrees deal to keep Mark Zuckerberg in California for eight years, tying his ability to sell a new class of company shares to where he lives. The arrangement, disclosed in a company regulatory filing, comes as California voters prepare to consider a proposed tax on billionaires’ assets.
The deal could let Zuckerberg sell some of the shares to pay taxes he may owe, while preserving his existing voting control at Meta. The company says the new shares will carry no voting power and will be distributed automatically to all existing shareholders in proportion to their holdings.
Share sales linked to California residence
Meta finalized the agreement a week before announcing its details on Wednesday, according to the filing. Under the Founder Alignment Agreement, Zuckerberg can sell 20 percent of the new shares to help pay any taxes he may owe. The remaining 80 percent would become available for sale in portions over the next eight years, provided he remains in California.
There is a condition. If Zuckerberg tries to sell those remaining shares early, he would have to sell some of his voting shares, unless unforeseen circumstances make it prudent or advisable for him to live elsewhere.
The filing says the agreement requires Zuckerberg to live wherever Meta maintains its headquarters. That leaves open the possibility that the company and its chief executive could move together to another state.
The arrangement followed a board dinner on September 9. Zuckerberg told directors he was considering leaving California because of Proposition 40 and planned to list his Palo Alto home for sale four days later, the filing says. His possible departure prompted concern from a special committee of Meta’s board.
The committee cited the company’s experience during the COVID-19 pandemic, when Zuckerberg could not be physically present with Meta’s management team. “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,” the filing stated.
Proposed tax and Meta’s AI spending
Proposition 40 calls for a one-time 5 percent tax on stock and other assets held by billionaires in California as of January 2026. The measure could face lawsuits even if voters approve it. Zuckerberg’s potential exposure to the tax was part of the backdrop to his consideration of leaving the state.
For Meta, the arrangement also relates to financing. The company says the nonvoting shares could help it raise money for investments in AI data centers without reducing Zuckerberg’s existing voting control. The filing said the board wanted him to lead Meta from California and stay close to Meta Superintelligence Labs, the unit behind the company’s recent Muse AI models.
That proximity matters to the board, the filing indicates, as Meta continues its work on AI. The agreement offers Zuckerberg a path to sell shares while keeping his leadership and residence tied to the company’s California base.
The tax proposal’s prospects remain uncertain. Recent polling in California suggests Proposition 40 will fail to win enough votes, despite about $129 million spent campaigning against it.
Source: wired.com
