Meta signs eight-year residency deal with Zuckerberg and issues him Class C shares
In short
Meta Platforms has agreed with CEO Mark Zuckerberg that he will keep living in California, or in any other jurisdiction where the company is headquartered, for eight years. Meta said the Class C share issue is partly meant to stop a proposed California wealth tax from forcing him to sell voting shares. He may sell 20% of the Class C shares at once, equal to 10% of his overall economic interest.
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Meta Platforms has signed an agreement with CEO Mark Zuckerberg requiring him to keep living in California, or in any other jurisdiction where the company is headquartered, for eight years. Chinese outlets reported the deal on 22 October, citing a Meta filing made on Wednesday. They said Zuckerberg had earlier said he was considering leaving California if the state passed a wealth tax. [ 1 , 2 , 3 , 4 , 5 ]
Meta said in the filing that Zuckerberg considered leaving because the proposed wealth tax could give him a tax bill of billions of dollars and might force him to sell voting shares to pay it. The company said it will issue Class C shares, partly to prevent that outcome. IT Home, citing Bloomberg, said the filing was a PRE 14C dated 20 October 2026. [ 1 , 2 , 3 , 4 , 5 ]
According to 36Kr, Jiemian and IT Home, Zuckerberg can immediately sell 20% of the Class C shares he receives, equal to 10% of his overall economic interest. IT Home said the money could be used to meet the tax burden that California's Proposition 40 might bring. IT Home also said the other 80% carries initial transfer restrictions that lift gradually over eight years as long as he keeps running the company, and that he pledged to stay in California, or wherever Meta's headquarters later moves, while he holds a full-time leadership role. [ 3 , 4 , 5 ]
Proposition 40 goes to a vote by California voters next month. IT Home said it was pushed by a local healthcare workers' union and progressive state politicians, with Congressman Ro Khanna involved. It said the tax would apply to people whose net worth exceeded $1 billion on 1 January 2026, and that some of the world's top billionaires, including Google co-founder Sergey Brin, have opposed it and left California. It added that recent polls show support and opposition evenly matched. [ 3 , 5 ]
IT Home, citing the filing, said Meta's special committee called it essential for Zuckerberg to work from the company's headquarters, especially as AI competition intensifies and he needs to work closely with Meta Superintelligence Labs. The committee also cited difficulties the company faced when he was away from his management team during the Covid pandemic. According to the filing, Zuckerberg first raised the tax with Meta's lead independent director, Robert M. Kimmitt, in July, and warned it could force him to sell Class B shares and cut his voting power below 53%. Within weeks his lawyer wrote to the special committee saying he was considering leaving California, and proposed that Meta issue a non-voting share class to raise equity capital for its AI plans. [ 5 ]
IT Home said CFO Susan Li told the quarterly earnings call that Class C shares are mainly a financing tool giving the company more room to invest in AI projects without diluting existing voting power. She did not mention the filing's terms for Zuckerberg. IT Home put Zuckerberg's net worth at $247 billion on the Bloomberg Billionaires Index. [ 5 ]
Why it matters
The arrangement answers one argument against California's Proposition 40, that a wealth tax would push billionaires out of the state. The ballot measure goes to California voters next month, and IT Home reported that recent polls show support and opposition evenly matched.
Key facts
- Meta said in a filing on Wednesday that Zuckerberg will remain a California resident, or a resident of any other jurisdiction where the company is headquartered, for eight years. [ 1 , 2 , 3 , 5 ]
- Meta said Zuckerberg considered leaving California because the proposed wealth tax could give him a tax bill of billions of dollars and force him to sell voting shares. [ 1 , 2 , 3 , 4 , 5 ]
- Meta said in the filing that it will issue Class C shares to Zuckerberg, partly to prevent that outcome. [ 1 , 2 , 3 , 4 , 5 ]
- Under the agreement Zuckerberg can immediately sell 20% of the Class C shares he receives, equal to 10% of his overall economic interest. [ 3 , 4 , 5 ]
- California's Proposition 40 goes to a vote by state voters next month. [ 3 , 5 ]
- IT Home, citing Bloomberg, reported that the remaining 80% of the Class C shares carry initial transfer restrictions that lift gradually over eight years while Zuckerberg continues to lead the company. [ 5 ]
Confirmed by several sources
- Meta and Zuckerberg signed an agreement under which he will keep living in California, or in the jurisdiction where Meta is headquartered, for eight years. [ 1 , 2 , 3 , 4 , 5 ]
- Meta said Zuckerberg considered leaving California because the proposed wealth tax could create a multibillion-dollar tax bill and force him to sell voting shares. [ 1 , 2 , 3 , 4 , 5 ]
- Zuckerberg can immediately sell 20% of the Class C shares he receives, equal to 10% of his overall economic interest. [ 3 , 4 , 5 ]
Still unclear
- Whether the Class C shares carry no voting rights. Only IT Home, citing Bloomberg, describes them as non-voting; the other outlets do not describe their voting rights.
- Terms for the remaining 80% of the Class C shares. Only IT Home reports that transfer restrictions on them lift gradually over eight years.
- How Meta's Class C shares relate to the residency terms in its public explanation. IT Home said CFO Susan Li described the Class C shares on the earnings call mainly as a financing tool for AI projects without diluting existing voting power, and did not mention the filing's terms for Zuckerberg.
What local media are saying
Timeline, local time
- CLS reported the agreement and Meta's filing. [ 1 ]
- CLS published a second report with the eight-year residency detail. [ 2 ]
- 36Kr published the report, adding the 20% sale term and the Proposition 40 vote next month. [ 3 ]
- Jiemian published its report. [ 4 ]
- IT Home published a detailed report citing Bloomberg. [ 5 ]