Mark Zuckerberg’s plans to sell a new class of Meta shares are tied to where he lives. A company regulatory filing says he agreed to remain wherever Meta maintains its headquarters for eight years, as California weighs a proposed one-time tax on billionaire-held assets.
A tax proposal puts residence in focus
At a dinner with Meta board members on September 9, Zuckerberg said he was considering leaving California because of Proposition 40, according to the 109-page filing. He also said he planned to list his Palo Alto, California home for sale four days later.
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. The filing notes the measure could face lawsuits even if voters approve it.
Many wealthy individuals, including Zuckerberg, avoid significant tax payments by borrowing against their shares and taking low salaries. In Zuckerberg’s case, the filing says his salary is $1 annually. The Wall Street Journal reported that he purchased a home in Florida this past February.
Meta links share sales to staying near its headquarters
Zuckerberg’s possible move concerned a special committee of Meta’s board. Its members included attorney Robert Kimmitt, venture capitalist Charlie Songhurst, and DoorDash CEO Tony Xu.
The committee was concerned about the practical effect of a move across the country. The filing says it remembered the difficulties Meta faced during the COVID-19 pandemic when Zuckerberg could not be physically present with the management team, and did not want similar challenges in the future.
Within days of the board dinner, Zuckerberg and the committee reached an agreement linking his ability to sell special company shares to his continued residence in California. Meta finalized the agreement a week ago and announced its details on Wednesday.
New nonvoting shares offer a way to raise funds
Meta plans to create a new class of shares without voting power. Selling them could help raise money for the company’s expensive investments in AI data centers while preserving Zuckerberg’s existing voting control.
All current shareholders will automatically receive the new nonvoting shares in proportion to their existing holdings. Under what Meta calls a “Founder Alignment Agreement,” Zuckerberg can sell 20 percent of his new shares to help pay any taxes he may owe.
The other 80 percent would become available for sale in chunks over the next eight years, provided he remains in California. If he tries to sell them earlier, he would have to offload some of his voting shares, unless “there are material unforeseen circumstances that would render it prudent or advisable for Zuckerberg to reside elsewhere.”
The commitment follows Meta’s headquarters
The agreement does not specifically require Zuckerberg to stay in California if Meta moves. It says he must remain wherever the company maintains its headquarters, leaving open the possibility that both could relocate to another state.
Several California companies have left for Texas, Nevada, and other states in recent years. Google cofounders Sergey Brin and Larry Page are among the billionaires widely believed to have left California over the potential tax.
Still, leaving Menlo Park could be difficult for Meta’s board to accept. The filing says the goal is for Zuckerberg to keep leading the company from California and stay close to Meta Superintelligence Labs, the unit behind the company’s recent Muse AI models.
The agreement may not ultimately be needed. Recent polling in California suggests Proposition 40 will fail to muster enough votes, despite about $129 million spent campaigning against it.