Zuckerberg Says He May Leave California Over a 5% Billionaire Tax
When Mark Zuckerberg privately told Meta's board he planned to sell his Palo Alto home and leave California, the board did not try to change his mind. It rewrote the company's stock structure instead.
Mark Zuckerberg told the board of Meta Platforms (NASDAQ:META | META Price Prediction) that he might leave California over a proposed billionaire tax. The board responded by creating a new class of stock to keep him in the state. An information statement filed with the SEC on October 21, 2026 shows that from July to September he told the board’s Special Committee he was first evaluating, and later planning, a move of his primary residence out of California.
Under the final deal, he commits to remain a resident of California, or of wherever Meta has its headquarters, for eight years, absent “material unforeseen circumstances.” He made these statements in private to directors, and the filing reports them.
On earnings day, Meta closed at $697.52, up 0.47%. After hours, it traded at $712.61, up 2.16%, which lines up with the quarterly results.
What Zuckerberg Told the Board, Month by Month
On July 8, the committee heard that if he paid the tax by selling Class B shares, his voting interest could fall to about 53% from around 60.6% now. An August 3 letter said he “was considering establishing residence outside of California.”
By August 4, he “intended to establish residence outside California” and had been told he needed to do so before the November 3, 2026 election. At a September 9 board dinner, he said he planned to list his Palo Alto home for sale on September 13, 2026. No source has confirmed that he actually listed it.
The September 10 term sheet then stated “Mr. Zuckerberg’s intention to remain a resident of California.” That pledge moves with Meta’s headquarters to “any other jurisdiction” and applies only while he leads the company. The filing names no penalty for breaking it.
Proposition 40 Puts a Multi-Billion Dollar Bill in Play
Proposition 40 would charge a one-time excise tax of up to 5% on California residents worth more than $1 billion. The rate phases in fully at $1.1 billion, and the tax can be paid over five annual installments. Residency is fixed as of January 1, 2026, so it is unclear how moving before the vote would have helped him.
The filing describes the potential bill only as “multi-billion dollar.” KTVU estimates his bill at around $12 billion, says the measure would apply to about 200 Californians, and expects it to raise about $100 billion. The Telegraph puts his liability at $11.45 billion.
Polls disagree on whether it will pass. A TrueDot poll showed 46% yes and 43% no. A Manhattan Institute poll showed 35% yes and 50% no. Two rival measures on the ballot would cancel it if either gets more yes votes.
Why Meta’s Board Paid in Share Structure
The committee called it “critically important to keep Mr. Zuckerberg in a leadership position.” Without a fix, it said, he “would effectively be paying to serve as the Company’s chief executive officer while residing in California.”
The fix is a non-voting Class C stock that takes effect in January 2027. Of his Class C dividend shares, 20% can be sold freely, which Reuters estimates is about 10% of his overall economic stake. That gives him cash for a tax bill without giving up any votes.
Bloomberg estimates his net worth at $246 billion, and he owns about 13.4% of Meta. The deal reduces key-person risk, meaning the risk of losing an executive the company depends on. It also sets a precedent of a board restructuring its capital structure around one holder’s personal taxes.
What the Class C Deal Means for Meta Shareholders
Third-quarter revenue of $64.60 billion rose 26.07%. GAAP EPS of $3.83 missed expectations because of a $9.89 billion litigation charge. Without that charge, EPS would have been $7.40.
Anyone who bought Meta already accepted founder control, so this deal keeps the arrangement shareholders signed up for. It also removes the distraction of a chief executive moving out of state in the middle of an AI spending cycle.
The date to watch is November 3, 2026. If Proposition 40 fails and Meta still issues Class C stock in January 2027 on these terms, the board will have restructured the company for a tax that never came, and shareholders will have reason to question its judgment.
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Omor Ibne Ehsan is a writer at 24/7 Wall St. He is a self-taught investor with a focus on growth, cyclical, and dividend equities that have strong fundamentals, value, and long-term potential. He also has an interest in high-risk, high-reward investments such as penny stocks.
