New Delhi: Mark Zuckerberg may be worth billions of dollars, but a proposed tax on California’s wealthiest residents could force the Meta chief executive to make a decision that few people in his position would welcome–sell a slice of his fortune or leave the state.
Meta Platforms has struck an unusual deal with Zuckerberg to help him meet a potential multi-billion-dollar tax bill if California voters approve a proposed one-time tax of five per cent on billionaires. The arrangement follows his warning that he was considering moving out of California to avoid the potential tax liability, Bloomberg reported.
Under the agreement, Zuckerberg will receive non-voting shares that he can sell to raise money to pay the tax, while committing to remain a resident of California, or live wherever Meta maintains its headquarters, for eight years.
In a statement, Meta said Zuckerberg could face a “significant, multi-billion dollar tax payment” because of his ownership of the company’s stock. Given the potential exposure, the company said he had informed a special committee of the board that he was evaluating relocating his primary residence outside California.
The proposed wealth tax, which voters are due to decide on next month, would apply to individuals whose net worth exceeded one billion dollars on 1 January 2026. The measure is aimed at taxing the enormous fortunes accumulated by the state’s richest residents, including technology entrepreneurs whose wealth is largely tied up in company shares.
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Mark Zuckerberg’s voting controls at Meta
Zuckerberg, whose net worth is estimated at $ 240 billion, could face a substantial bill under the proposal. Much of his fortune is linked to his Meta holdings, making the question of how to raise cash to pay the levy particularly significant.
The agreement offers a way to address that problem without requiring him to surrender voting control of the company. Zuckerberg can immediately sell 20 per cent of the new Class C shares he receives, equivalent to 10 per cent of his overall economic stake in Meta, according to the terms outlined in the agreement.
The distinction matters because Zuckerberg’s influence over Meta extends beyond his financial stake. The company’s share structure allows him to retain substantial voting power, giving him control over major decisions despite owning only a portion of its economic value. Meta’s board special committee said retaining Zuckerberg’s leadership in California was “critically important”, particularly as the company faces what it described as unprecedented competition driven by artificial intelligence.
The arrangement highlights the tension between California’s efforts to tax concentrated wealth and the ability of billionaires to move their assets, businesses or residences in response to changes in policy.
California is home to some of the world’s wealthiest technology founders and investors. A one-time 5 per cent tax on billionaires could generate substantial revenue, but the prospect of prominent residents leaving has become a contentious issue in the debate over the proposal.
Supporters of the tax argue that the wealthiest individuals should contribute more toward public services, while critics warn that higher taxes could encourage wealthy residents and investment to move elsewhere.
(Edited by Ratan Priya)