Zuckerberg agrees to keep California residence for eight years

Meta CEO Mark Zuckerberg has committed to keeping his primary residence in California for eight years under an agreement with the company that gives him new non-voting shares he could sell to pay a possible one-time billionaire wealth tax, Foxbusiness reported.

The arrangement was prompted by Proposition 40, a ballot initiative before California voters in November that would levy a 5% tax on the net worth of people who were state residents on Jan. 1, 2026, according to Foxbusiness. Zuckerberg, ranked sixth on Forbes’ wealth list with a net worth approaching $250 billion, had earlier told Meta he might move his primary residence out of California over the measure.

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Key facts

• Under the deal reported by Reuters, Zuckerberg can immediately sell 20% of the non-voting Class C shares he receives — equivalent to 10% of his economic stake in Meta — while preserving his voting control, Foxbusiness reported.
• If approved, the Proposition 40 tax would be due in 2027 and could be spread over five years at an additional cost; real estate, pensions and retirement accounts would generally be excluded.
• Meta said Wednesday it plans to issue a new class of non-voting Class C common stock in January 2027, aimed at funding acquisitions and retaining talent without changing its voting structure.
• Wired reported that at a board dinner on September 9, Zuckerberg said he was considering leaving the state and planned to list his Palo Alto home for sale four days later, according to a 109-page regulatory filing.
• Wired also reported that recent California polling suggests Proposition 40 will fail, with about $129 million spent campaigning against it.

What the filing and the company said

In a statement to Foxbusiness, Meta pointed to remarks from Chief Financial Officer Susan Li, who said the new share class was built to create publicly traded non-voting stock usable for capital raising, employee compensation, acquisitions and other general corporate purposes while preserving the voting power of existing Class A and B shareholders. Li spoke during Meta’s third-quarter earnings call.

Meta said the decision followed a unanimous recommendation from a special committee of independent directors, which concluded the new stock class would help finance growth and keep Zuckerberg in charge. Per a company filing, the committee stressed that his staying in California would keep him close to Meta’s management and to its Superintelligence Labs unit.

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Wired described the committee’s makeup — attorney Robert Kimmitt, venture capitalist Charlie Songhurst and DoorDash CEO Tony Xu — and quoted the filing recalling the difficulty the company faced during the COVID-19 pandemic when Zuckerberg could not be physically present with management. Wired reported the agreement was finalized a week before Wednesday’s announcement and that all existing shareholders will receive the new non-voting shares in proportion to their holdings.

Why it matters

The arrangement lets Meta retain its founder and controlling shareholder while he faces a potential tax bill that could otherwise force share sales. Wired reported the board’s concern that a departure could disrupt Meta’s AI ambitions, given that much of the company’s most advanced work sits in Silicon Valley. The reports diverge on timing: Foxbusiness framed the vote as an open question while noting the California Democratic Party endorsed the measure and Gov. Gavin Newsom opposed it; Wired reported polling points toward failure. Cryptobriefing, meanwhile, framed the episode around prediction-market pricing and noted the outcome hinges on the November 3, 2026 election.

Opposition to the tax has been loud. Economist Art Laffer, a former adviser to President Ronald Reagan, warned it could cause “an exodus of billionaires,” while California entrepreneur Eric Schiffer told Foxbusiness it could produce “a giant sucking sound” of departing founders. The nonpartisan Legislative Analyst’s Office said some billionaires may leave and that resulting behavioral changes could cut state income tax revenue by less than $1 billion annually, though the tax could still raise tens of billions over several years, per Foxbusiness.

What to watch

California voters decide Proposition 40 in November, and the tax, if passed, would come due in 2027. Wired noted the measure could face lawsuits even if approved. Meta’s planned January 2027 issuance of the new non-voting shares is the next corporate milestone.

Written by

Benjamin

Benjamin Carter covers business, finance, and the stock market for StockPil, focusing on the trends and data that matter to everyday investors.

Sources: Fox Business, Wired, Cryptobriefing