Meta Strikes Deal to Keep Zuckerberg in California Over Proposed Billionaire Tax

Meta has agreed a deal with Mark Zuckerberg to stop the Facebook co-founder from leaving California after he threatened to move from the state because of a proposed tax on billionaires. The agreement allows Zuckerberg to sell shares in Meta without losing control of the Californian-based company if he needs to pay a large tax bill.

The measure itself has not yet come into force. It would impose a one-time 5% tax on state residents with a net worth of more than $1bn (£750m). Californian residents will vote on the proposal on 3 November.

Nevertheless, Zuckerberg secured the deal with a special committee at Meta after negotiations described as 'robust' and 'at several points, contentious'.

California is home to most of the US's technology giants, and there are around 225 billionaires who reside in the state, according to the Americans for Tax Fairness campaign group. In other words, if the proposed tax passes, its impact would reach many of the technology sector's leading figures.

Zuckerberg has a $226bn fortune according to Forbes' billionaires tracker. He is reportedly one of the world's richest people, and his position at the head of Meta sits at the centre of the company's structure.

Zuckerberg had told Meta's board that it was his intention to remain with the firm for 'the foreseeable future'. However, he said he was evaluating relocating his primary residence outside California and, if he listed his home on the real estate market, it 'would be public and inevitably noted and commented upon by company employees'.

In his words, that 'would raise questions for management of the company going forward'. In other words, even a personal decision by him to move could create uncertainty about the company's stability — an argument that carried weight in the special committee's consideration.

A special committee within Meta decided it was 'critically important' to keep Zuckerberg in a leadership role and in California to manage the firm from its headquarters 'during this era of unprecedented challenge and competition in our industry'.

Tech companies in the US and globally are spending billions of dollars on developing artificial intelligence and the infrastructure around it. Against that competition, Meta said the share deal was appropriate to ensure Zuckerberg 'remains working closely' with the company's AI at its headquarters.

Meta also said his 'talent and leadership have been crucial to our growth, strategy, and stability since our inception, and the special committee wants that to continue'.

The episode also offers a concrete picture of the larger debate over California's proposed wealth tax. Whether the tax will pass at the ballot remains uncertain; but even before the vote, one of the state's best-known technology founders has entered negotiations with his own company over his position.

The result of the 3 November vote will now determine where this debate goes. Until then, Zuckerberg's deal stands as a step by Meta to ensure continuity of leadership.