SACRAMENTO (Azat TV) — Meta Platforms Inc. has reached a definitive agreement with Chief Executive Officer Mark Zuckerberg to issue a new class of non-voting stock through a stock split, creating a corporate mechanism designed to help him settle a potential multibillion-dollar tax liability tied to California’s Proposition 40. According to regulatory filings published this week and reported by ABC News, the arrangement hinges on Zuckerberg committing to maintain his primary residence in California for the next eight years while continuing to lead the technology giant.
The ballot initiative, slated for the November 3 election, proposes a one-time 5% wealth tax on resident Californians whose net worth exceeds $1 billion as of January 1, 2026. Zuckerberg, whose net worth is estimated by Forbes at more than $220 billion, could face a tax bill exceeding $11 billion if the measure is approved by voters. The corporate restructuring announced by Meta on Wednesday ensures Zuckerberg retains his majority voting control over the company while giving him the flexibility to sell a portion of the new non-voting shares to cover prospective tax obligations.
Corporate Structure and Residency Commitment
Regulatory filings reveal that the compromise was reached after Zuckerberg informed the Meta board last month that he was considering selling his Palo Alto home to evade the prospective tax burden by relocating outside California. Under the newly finalized terms, Zuckerberg has agreed to stay in the state for eight years, unless unforeseen material circumstances make relocation prudent. Meta’s board argued in filings that because Zuckerberg has taken an annual salary of $1 since 2013, enforcing a California wealth tax without structural adjustments would effectively require him to pay out of pocket to serve as CEO.
The newly created stock class will represent roughly 10% of Zuckerberg’s overall economic stake in the company. Beyond addressing the executive’s potential tax liability, Meta executives noted that the stock split will expand the firm’s financing capabilities. Meta Chief Financial Officer Susan Li stated during an earnings call that the maneuver will provide essential flexibility to fund heavy investments in artificial intelligence infrastructure, employee compensation, and corporate acquisitions.
Broader Political Stakes and Campaign Fundraising
The proposed ballot measure has triggered intense political polarization across California, drawing substantial capital from wealthy tech executives and organized labor. Proponents, including SEIU United Healthcare Workers West and Vermont Senator Bernie Sanders, argue that the levy ensures the ultra-wealthy contribute fairly to public services. Supporters project that the majority of the revenue would backfill federal funding cuts to healthcare, with 10% allocated toward education and food assistance programs.
Conversely, opponents led by business groups and figures such as California Governor Gavin Newsom have cautioned that a punitive wealth tax will drive high-net-worth individuals out of the state, eroding the income tax base that funds core public programs. A political action committee opposing the tax, Building a Better California, has amassed more than $333 million, with Google co-founder Larry Page and other tech leaders contributing heavily. Meanwhile, the “Yes on 40” campaign has raised $32.7 million. Suzanne Jimenez, chief of staff for SEIU United Healthcare Workers West, asserted in a statement to ABC News that Zuckerberg’s agreement with Meta decisively refutes claims that billionaires are permanently abandoning California.