Meta gives Zuckerberg a way to pay California's billionaire tax and keep control: 8-year residency pledge

Meta Platforms has agreed to give Mark Zuckerberg a way to pay a possible California wealth tax without surrendering voting control, in return for a promise to stay put. Fox Business, citing Reuters, reports that Zuckerberg will remain a resident of California, or of the state where Meta is headquartered, for eight years. In exchange he receives new non-voting Class C shares, 20% of which he can sell immediately.

The arithmetic behind it

Proposition 40 is a one-time tax of 5% of net worth on people who were California residents on January 1, 2026 and are worth more than $1 billion, according to CNBC's explainer. Fox Business cites Forbes putting Zuckerberg's net worth near $250 billion. Five percent of that is a little under $12.5 billion. That is our arithmetic, not a figure from Meta or the state.

If voters approve the measure, the tax would be due in 2027, and payments could be spread over five years at extra cost, Fox reports. Real estate, pensions and retirement accounts generally would be excluded.

The share sale is sized to match. Because Meta will pay one Class C share for every existing share, the 20% Zuckerberg can sell equals about 10% of his total economic stake, Fox reports. He could raise cash without selling the voting Class B shares that give him control.

What Meta said, and what it did not

We covered the Class C announcement on Wednesday: Meta creates a non-voting stock class to fund AI spending. Meta's stated purpose was raising capital, paying employees and making acquisitions. CFO Susan Li said on the earnings call the shares were designed to preserve the voting power of existing Class A and B holders, per Fox.

The residency link comes from a company filing, as Fox describes it. A special committee of independent directors recommended the structure unanimously and stressed that Zuckerberg should stay in California to work closely with management and with Meta's Superintelligence Labs. Neither the company statement quoted by Fox nor the CNBC piece ties the new class to the wealth tax directly. CNBC does say Zuckerberg's raising the threat of leaving helped him win the new stock plan. We have not seen the filing itself; the SEC's site blocked our automated request, so the details above are as reported.

Will it pass?

CNBC reports a September UC Berkeley poll with 45% of likely voters for Proposition 40, 42% against and 13% undecided. A later Mason-Dixon poll for NBC Universal and Telemundo showed a 10-point lead for yes. Kalshi and Polymarket both put passage under 30%, though CNBC notes those markets do not use polling methods.

The revenue estimates differ sharply. Backers say about $100 billion, which allows for 10% avoidance. The state's nonpartisan Legislative Analyst says "tens of billions" spread over several years, with a possible loss of less than $1 billion a year in income tax from billionaires. The Hoover Institution study, including Stanford's Joshua Rauh, estimates $30 billion and says lost income tax from departures could outweigh it; we reported that paper this morning.

Who this touches

• Meta shareholders: the Class C shares will be freely tradable. Any Zuckerberg sale would add supply of a new, non-voting class, whose pricing relative to Class A is unknown until it trades in 2027.
• Other founder-controlled companies: this is a template. Dual-class firms with California-resident founders now have a worked example of liquidity without voting dilution.
• California's budget: backers want the money for healthcare after federal cuts. A one-time payer who stays is easier to tax than one who leaves, which is the point of the pledge.

The vote is November 3. Nothing here takes effect unless voters approve the measure.

Sources: Fox Business, citing Reuters; CNBC; Meta filings on SEC EDGAR. This is market information, not investment advice.