Meta board creates new shares to keep Zuckerberg in California amid wealth tax

Meta Platforms' board spent much of the summer negotiating a new share class and an eight-year California residency commitment with CEO Mark Zuckerberg, according to NLPC.org.

This move was designed to address Zuckerberg's personal exposure to a proposed California wealth-tax ballot measure, Proposition 40, which could impose a one-time tax of up to 5% on certain billionaire assets if passed on November 3.

The Wall Street Journal reported that Zuckerberg considered leaving California and nearly listed his Palo Alto home for sale before the board intervened and a revised agreement was reached.

The new Class C nonvoting shares will be issued as a stock dividend to all shareholders, with Zuckerberg's shares 'stapled' to his voting shares, restricting sales but allowing him to sell up to 20% of these new shares to cover potential tax liabilities under Proposition 40.

In exchange, Zuckerberg agreed to maintain his primary residence in California, where Meta's headquarters are located, securing his presence in the state for the foreseeable future.