Meta filing says Zuckerberg weighed leaving California over Proposition 40 billionaire tax
In short
A Meta SEC filing disclosed on Wednesday that Mark Zuckerberg told board members he was considering leaving California because of Proposition 40, a one-time 5% tax on billionaires. Meta and a board special committee then agreed a deal linking his ability to sell shares of a new nonvoting class to his continued residence in California.
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Meta disclosed in an SEC filing on Wednesday that its chief executive, Mark Zuckerberg, had considered leaving California because of Proposition 40, a ballot measure for a one-time tax on the state's billionaires. Bloomberg's summary said he was weighing leaving if the measure passes, while Wired's headline said he agreed to stay despite it. [ 1 , 2 , 3 ]
According to the 109-page filing, as reported by Wired, Zuckerberg told Meta board members at a dinner on September 9 that he was considering leaving California because of the measure. He said he planned to list his Palo Alto home for sale four days later. Wired said the proposal calls for a one-time 5 percent tax on stock and other assets held by billionaires in the state as of January 2026, and could face lawsuits even if voters approve it. Business Insider said Californians vote on it next month. [ 2 , 3 ]
A special committee of the board, whose members included Robert Kimmitt, Charlie Songhurst and DoorDash CEO Tony Xu, was concerned about the potential cross-country move. Wired quoted the filing as saying the committee was "mindful about the difficulties the company faced during the COVID-19 pandemic when Zuckerberg could not be physically present with the company's management team". Business Insider said the committee concluded it was "critically important" for him to run Meta close to its Silicon Valley headquarters, particularly its AI division, Meta Superintelligence Labs. [ 2 , 3 ]
Within days of the dinner, the committee and Zuckerberg reached an agreement linking his ability to sell special company shares to his continued residence in California, Wired reported. It was finalized a week before Wednesday, when Meta announced the details. Meta plans a new class of shares with no voting power, which all existing shareholders would receive automatically in proportion to their holdings. Wired said selling them could help raise money for Meta's AI data center investments without diluting Zuckerberg's voting control. [ 2 ]
Business Insider reported that the shares would give Zuckerberg $20 billion in "immediate liquidity" to cover the tax, if it passes, without losing control of Meta. It said the new shares would not add to his net worth or his percentage ownership. The filing says, "The goal is to keep Mr. Zuckerberg continuing to lead the Company from California." A person familiar with the matter told Business Insider the class totals $150 billion and is also intended to raise capital, compensate employees and support the stock price. Meta declined to comment. [ 3 ]
Wired noted that many wealthy people, including Zuckerberg, avoid large tax payments by borrowing against their shares and taking low salaries, which is $1 a year in his case. It said he bought a home in Florida in February, as the Wall Street Journal reported at the time. Business Insider said Sergey Brin and Eric Schmidt put hundreds of millions of dollars into attack ads against the proposal, while Zuckerberg took a lower-key approach. It said he has residences in California, including Palo Alto and Lake Tahoe, and property outside the state. [ 2 , 3 ]
Why it matters
The filing shows how one of the state's best-known billionaires is responding to the ballot measure, which Californians vote on next month. It also shows Meta tying its founder's stock sales to where he lives, as it plans a new share class to raise money for AI investments.
Key facts
- Proposition 40 would impose a one-time 5 percent tax on stock and other assets held by billionaires in California as of January 2026. [ 2 ]
- Californians vote on Proposition 40 next month. [ 3 ]
- At a Meta board dinner on September 9, Zuckerberg said he was considering leaving California and planned to list his Palo Alto home for sale four days later, according to the 109-page filing. [ 2 ]
- Meta plans a new class of nonvoting shares, to be distributed automatically to all existing shareholders in proportion to their holdings. [ 2 ]
- Under a "Founder Alignment Agreement", Zuckerberg's ability to sell the special shares is linked to his continued residence in California. [ 2 ]
- Business Insider reported that the shares would give Zuckerberg $20 billion in "immediate liquidity" to cover the tax by selling stock without losing control of Meta. [ 3 ]
- Meta declined to comment to Business Insider. [ 3 ]
Confirmed by several sources
- Meta disclosed in an SEC filing on Wednesday that Zuckerberg told board members he was considering moving out of California because of the billionaire tax measure, Proposition 40. [ 2 , 3 ]
- Meta is creating a new class of nonvoting shares as part of an arrangement with Zuckerberg that is meant to keep him leading the company from California. [ 2 , 3 ]
- Proposition 40 is a one-time 5% tax on billionaires. [ 1 , 2 , 3 ]
Still unclear
- Whether Zuckerberg will leave California. Bloomberg's summary says he is weighing leaving if the measure passes, while Wired's headline says he agreed to stay; the documents do not give his own statement on his plans.
- The total size and purposes of the new share class. A person familiar with the matter told Business Insider the class totals $150 billion and is also meant to raise capital, compensate employees and support the stock price; the other documents do not give these figures.
- Whether Proposition 40 will pass and survive legal challenge. Wired said the measure could be subject to lawsuits even if voters approve it.