Meta disclosed in a filing with the U.S. Securities and Exchange Commission that Chief Executive Mark Zuckerberg considered leaving California because of a proposed billionaire tax. The company’s special committee said it viewed his continued leadership near Meta’s Silicon Valley headquarters as important, particularly as the company expands its artificial intelligence operations.
The disclosure links California’s tax proposal to Meta’s plan to grant Zuckerberg a new class of shares. California residents are due to vote next month on Proposition 40, which would impose a one-time tax on the assets of billionaires living in the state. The proposal’s impact would depend on the final policy language and how it is implemented.
New shares could provide $20 billion in liquidity
Meta said the proposed shares would give Zuckerberg about $20 billion in “immediate liquidity.” If the tax measure passes, he could raise funds by selling part of his holdings without giving up control of Meta.
The filing said the new shares would neither increase Zuckerberg’s net worth nor raise his ownership percentage in Meta. The company said the arrangement is intended to allow him to continue leading Meta from California, rather than alter the existing structure of his economic interests.
The proposed share class would have an aggregate value of about $150 billion. People familiar with the matter said the arrangement also relates to funding Meta’s artificial intelligence operations, employee compensation and efforts to support the company’s share-price performance. Meta has not provided further comment on the disclosure.
Meta ties Zuckerberg’s location to its AI strategy
Meta is increasing its investment in artificial intelligence, with the company’s Meta Superintelligence Labs receiving specific attention from the special committee. The committee said Zuckerberg’s continued presence near the Silicon Valley headquarters and the unit was “critical” to the company’s management and execution of its business plans.
As a result, Zuckerberg’s decision to remain in California is not solely a personal tax matter. It also touches on Meta’s leadership structure, capital-raising plans and investment in artificial intelligence. The proposed share structure is designed to provide liquidity while preserving his control of the company.
Tech billionaires take different approaches to Proposition 40
Zuckerberg’s estimated fortune is about $240 billion. He owns several homes in California, including properties in Palo Alto and Lake Tahoe, as well as substantial real estate outside the state, including a retreat in Hawaii, a waterfront mansion in Miami and a castle in Ireland.
Sergey Brin, Google’s co-founder, and Eric Schmidt, the company’s former chief executive, have committed hundreds of millions of dollars to advertising opposing the proposal. Zuckerberg has not taken similarly public action on that scale, but Meta’s filing shows that the tax measure has been incorporated into planning for his shareholding and role at the company.
The vote will determine whether the one-time tax is enacted. Meta’s filing indicates that, before the vote, the company had already assessed how a potential tax could affect Zuckerberg’s holdings, his management location and its artificial intelligence investment plans.