Mark Zuckerberg threatened to move out of California over billionaire tax: Meta filing | Latest Tech News
He’s not Zucking around.
Meta CEO Mark Zuckerberg held detailed negotiations with the tech giant’s board of administrators about shifting out of California if the state passes Prop. 40, a 5% wealth tax on billionaires — which might pressure him to liquidate big chunks of stock, according to a new financial filing.
The social media firm made the disclosures about Zuckerberg’s threats to offload his $110 million Palo Alto compound and set up residency exterior the Golden State in a 109-page Securities and Exchange Commission filing posted Wednesday, which revealed for the first time the billionaire’s issues about how the wealth tax might rip away his control of the firm he based.
CEO of Meta Platforms Mark Zuckerberg attends a press briefing held by U.S. President Donald Trump with AI executives following a assembly on artificial intelligence exterior the West Wing of the White House in Washington, DC, Tuesday, Sept. 29, 2026. The assembly comes as some have called for a slowdown in AI development amid rising security issues. Getty Images
Meta wrote in the filing that over a collection of talks with the board, Zuckerberg said the tax on his web price of roughly $250 billion — which might quantity to a tax invoice of $12.5 billion — would pressure him to dump stock, diluting his voting shares.
Mark Zuckerberg and Priscilla Chan attend the seventh Annual Breakthrough Prize Ceremony at NASA Ames Research Center in Mountain View, Calif., Sunday, Nov. 4, 2018. Getty Images
Most of Zuckerberg’s immense wealth comes from his 13% possession stake in Meta, which incorporates specialised Class B shares that give him majority shareholder voting rights.
“Mr. Zuckerberg noted that he has taken only a $1 annual salary since 2013 for serving as the Company’s Chief Executive Officer, and he stated that if he needed to pay any such tax by selling down his Class B common stock, the tax liability could be large enough to reduce his voting interest in the Company to approximately 53%,” the filing read.
Talks over Prop. 40 gained steam in July, when Zuckerberg repeatedly raised issues about Prop. 40 with leaders such as Robert M. Kimmitt, a lead impartial director of Meta — saying the wealth tax would “impact his ability to remain resident in California and pay any tax assessed on him if it becomes law.”
Mark Zuckerberg’s home is seen in Palo Alto, California, Sunday, May 8, 2011. Splash News
An exterior of Zuckerberg’s home in Palo Alto, California, on Sunday, May 8, 2011. Splash News
His attorneys despatched a letter on Aug. 3 to a board particular committee demanding a revised comp settlement that would, in half, enhance his liquidity in the event of a huge tax invoice — triggering weeks of negotiations over how to revise his pay.
Zuckerberg insisted he meant to place his $110 million Palo Alto compound on the market by mid-September in order to set up residency elsewhere before the Nov. 3 election, and told administrators he didn’t need protracted negotiations in the event the wealth tax spreads to other jurisdictions.
“Mr. Zuckerberg stated his intention to remain with the Company for the foreseeable future but noted that, given the impending vote on California Proposition 40 and his personal circumstances, he would need to begin taking steps by mid-September in order to establish residency outside California by mid-October, and that he anticipated informing management of those steps immediately after the upcoming Board meeting that he would be taking steps to leave California,” the filing read.
The company detailed a recapitalization and dividend plan meant to guarantee Zuckerberg stays in management at the company’s Menlo Park headquarters, which entails spinning out new Class C shares in the firm.
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The company headquarters of Meta, previously Facebook, is seen in Menlo Park, California, Wednesday, Nov. 9, 2022. Facebook proprietor Meta announced it can lay off more than 11,000 employees members. AFP via Getty Images
According to the filing, Zuckerberg has agreed to stay a resident of California “or any other jurisdiction in which the Company maintains its corporate headquarters, absent material unforeseen circumstances rendering it prudent or advisable for him to reside elsewhere.”
The disclosures have been made alongside Meta’s second-quarter earnings report, which revealed a 26% soar in annual income.
Meta didn’t immediately reply to a request for remark.
Zuckerberg is only the latest billionaire to threaten to ditch California over the wealth tax, championed by the SEIU-United Healthcare Workers West as a salve to federal health care funding cuts.
Fellow tech titan Sergey Brin, a co-founder of Google, modified his residency to Nevada and has spent 9 figures this election cycle on efforts to kill the billionaire tax.
A view of Zuckerberg’s home in Palo Alto, California, Sunday, May 8, 2011. Splash News
Former Google CEO Eric Schmidt and cryptocurrency mogul Chris Larsen have joined him with eight-figure contributions.
Recent polls show Prop. 40 barely short of majority assist — with 46% of voters backing the tax in one ballot launched this week, and 43% of respondents against it.
Two propositions backed by Brin, Prop. 41 and Prop. 42, would also enact limitations to the wealth tax if they receive more votes.
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