Meta chief executive Mark Zuckerberg has decided to stay in Silicon Valley for the next eight years, a move that could expose him to billions of dollars in one‑time taxes if California voters approve Proposition 40, a controversial ballot measure slated for next month, according to a regulatory filing released on Wednesday.
At a dinner with Meta’s board on September 9, Zuckerberg told directors that he was weighing a move out of California because of the measure and that he intended to put his Palo Alto home on the market four days later, the 109‑page filing said. Proposition 40 would impose a one‑time 5 percent tax on stock and other assets owned by billionaires in the state as of January 2026, and could face legal challenges even if it passes.
Many high‑net‑worth individuals, including Zuckerberg, currently avoid large tax bills by borrowing against their shares and taking minimal salaries – Zuckerberg draws a $1 annual salary from Meta. He bought a residence in Florida in February, the Wall Street Journal reported at the time.
A special committee of the board, comprising attorney Robert Kimmitt, venture capitalist Charlie Songhurst and DoorDash chief Tony Xu, expressed concern about the prospect of the CEO leaving. “The special committee was mindful about the difficulties the company faced during the COVID‑19 pandemic when Zuckerberg could not be physically present with the company’s management team and did not want the company to face similar challenges going forward,” the filing noted.
Within days, the committee and Zuckerberg reached an accord that ties his ability to sell a new class of company shares to his continued residence in California. The agreement was finalized a week ago and disclosed by Meta on Wednesday. The plan creates a new class of non‑voting shares that could be sold to fund Meta’s costly AI data‑center projects without diluting Zuckerberg’s voting power. All existing shareholders will automatically receive the new shares in proportion to their current holdings.
Under a “Founder Alignment Agreement” with Zuckerberg, he may sell 20 percent of the new shares to cover any taxes that may arise. The remaining 80 percent can be sold in portions over the next eight years, provided he stays in California. An early sale would require him to dispose of some voting shares “unless there are material unforeseen circumstances that would render it prudent or advisable for Zuckerberg to reside elsewhere.”
The agreement specifies that Zuckerberg only needs to remain where Meta’s headquarters are located, leaving open the possibility that both he and the company could relocate together to another state. In recent years, several California firms have moved to Texas, Nevada and other states, and Google co‑founders Sergey Brin and Larry Page are widely believed to have left California over the proposed tax.
Nevertheless, much of the cutting‑edge AI work continues in Silicon Valley, making a move from Menlo Park a difficult proposition for the board. “The goal is to keep Zuckerberg continuing to lead the company from California and in close proximity to Meta Superintelligence Labs,” the filing stated, referring to the unit behind the recent Muse AI models.
Recent polling suggests that, despite roughly $129 million being spent campaigning against Proposition 40, the measure may not gather enough votes to pass.