Meta’s deal to keep Zuckerberg in California adds fuel to wealth tax debate ahead of election — SkimNews
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- Meta disclosed in a Wednesday filing alongside third-quarter earnings that new non-voting Class C stock takes effect in January, with a portion granted to Zuckerberg through a dividend; the disclosure was a first among California megacap tech companies.
- Zuckerberg committed to remain in California for eight years unless material unforeseen circumstances made leaving prudent, and can immediately sell or transfer up to 20% of his granted shares—including for potential Proposition 40 tax liability—without affecting his majority voting control.
- Proposition 40 would impose a 5% tax on Californians worth more than $1 billion; Zuckerberg's net worth is about $225 billion, while his annual Meta salary is $1.
- Meta’s special committee said Zuckerberg’s talent and leadership were crucial to growth, strategy and stability, and that the company did not want to jeopardize his close working relationship with Meta Superintelligence Labs, led by Alexandr Wang.
- Meta considered issuing Class A stock to help raise funds, but said its new structure would bring in “critical equity capital” without reducing Zuckerberg’s voting power; he said he would not support significant financing that would dilute his control.
- Jensen Huang called paying Proposition 40 a “privilege,” contrasting with broad tech-industry opposition to the measure; Huang and Zuckerberg are among the few tech chiefs still living in California.
- Citrin-Politico reported a recent poll with 46% of respondents favoring Proposition 40 and 43% opposed, ahead of the measure's November 3 vote.
Why it matters: Proposition 40 turns Zuckerberg’s residence into a corporate-governance issue: a 5% tax on fortunes above $1 billion meets a founder worth about $225 billion whose AI leadership Meta wants to preserve. The Class C design lets Meta raise equity capital while Zuckerberg can sell up to 20% of his shares and retain majority voting control.
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