SAN FRANCISCO: Meta CEO Mark Zuckerberg will get a new chunk of shares in the company he founded, and in return, he has agreed to stay in California, where the company is headquartered, for at least eight more years.
It's partly a financial carrot intended to keep Zuckerberg in California, where voters in November will decide whether to approve a temporary tax on wealth held by billionaires who reside in the state.
Meta announced the deal on Wednesday in a securities filing that coincided with its quarterly earnings report, where it said it would offer a new class of nonvoting shares and give all existing shareholders a one-time bump for every share they own.
That includes Zuckerberg, who owned more than 342 million Meta shares at the end of 2025, most of which are considered super-voting shares, effectively giving him more than 60 percent control over the company, according to a filing related to its annual report.
In a securities filing, Meta expressed concern that Zuckerberg's voting power "could drop to approximately 53% or lower" if he has to sell a significant portion of his shares to pay increased taxes.
The deal is structured to give Zuckerberg the ability to sell shares without significantly diluting his voting power, in case California voters approve the tax measure known as Proposition 40, which could trigger "a significant, multibillion-dollar tax payment based on his ownership" in Meta, the company said in the filing.
There are an estimated 39 million people who live in California. Of those, "a few hundred" have net worths of US$1 billion or more, according to the California Legislative Analyst's Office, which is a nonpartisan agency.
If approved by voters, Proposition 40 would impose a one-time 5% tax on billionaires, with 90% of the proceeds earmarked for health care services.
Some of the state's billionaires have preemptively relocated elsewhere, including Google founders Sergey Brin and Larry Page, and PayPal and Palantir co-founder Peter Thiel, according to Politico.
By contrast, Nvidia CEO Jensen Huang has brushed off concerns.
"I don't mind paying taxes; the more you make, the more taxes you pay, so I'm okay with that," Huang told CBS News on Sunday.
"I'm not afraid of paying taxes" even if that means an US$8 billion tax bill, Huang continued.