In case there was any doubt, Mark Zuckerberg will stay in California. Meta was apparently concerned enough that its founder and CEO might leave his home state that the company launched a new stock plan that could help offset the burden of higher taxes should a tax on billionaires, known as Proposition 40, pass on Election Day on November 3. Zuckerberg, the world’s sixth-richest person, is one of the few among his peers who still resides in the state, along with Nvidia CEO Jensen Huang. Elon Musk and Michael Dell live in Texas, while Amazon founder Jeff Bezos’ primary residence has always been elsewhere. Google co-founders Larry Page and Sergey Brin moved out of California before the election and bought luxury homes in Florida, the same state that Oracle founder Larry Ellison officially calls home. Proposition 40 would impose a 5% tax on Californians worth more than $1 billion. Zuckerberg’s net worth is currently about $225 billion. “If the California estate tax is enacted and Mr. Zuckerberg becomes liable for a tax payment, Mr. Zuckerberg would effectively be paying to serve as CEO of the company while residing in California,” the document said, noting the CEO’s “salary of just $1 each year.” Meta said in the document that Zuckerberg committed to remain in California for eight years, “unless there are unforeseen material circumstances that would make it prudent or advisable for Mr. Zuckerberg to reside elsewhere.” The company created a new class of non-voting Class C common stock that will take effect in January. Basically, Zuckerberg will be given a portion of the new shares through a dividend. You will be able to “immediately sell or transfer up to 20%” of the shares awarded to you “for any reason, including to satisfy your potential tax liability under California Proposition 40, if enacted into law, without affecting your majority voting control,” the document says. “There were many determining factors that led the board and special committee to approve the Class C shares, and it would be misleading to attribute it to a single reason,” Meta told CNBC in a statement. large, has appeared unified in its objection to the ballot measure. In addition to Google’s co-founders, several big-name tech experts have poured money into opposing Proposition 40. They include former Google CEO Eric Schmidt, Stripe CEO Patrick Collison, venture capitalist Peter Thiel and DoorDash CEO Tony Xu, according to multiple media reports based on campaign filings. Collison and Xu are members of Meta’s board, while Thiel will leave the company’s board in 2022, having served since 2005. Brin told The New York Times in April that he fled the Soviet Union with his family in 1979, saying, “I don’t want California to end up in the same place.” However, Huang recently told CBS Sunday Morning that it would be a “privilege” to pay the tax. Huang is just behind Zuckerberg on Forbes’ billionaire rankings, with a net worth of $185 billion. Although Proposition 40 advocates, including Sen. Bernie Sanders, I-Vt., have been urging voters to approve the ballot measure, recent polls have suggested it may not achieve the majority support needed to sign it into law. A recent Citrin-Politico poll showed 46% favor the measure compared to 43% who oppose it. Meta, with the help of a special committee, sees Zuckerberg as key to the company’s future and its efforts to become a major player in artificial intelligence, according to the document. In particular, the company said it does not want to jeopardize Zuckerberg’s close working arrangement with Meta Superintelligence Labs, led by AI chief Alexandr Wang. “The Special Committee believes that Mr. Zuckerberg’s talent and leadership have been crucial to our growth, strategy and stability since our inception, and the Special Committee wants that to continue,” the document said. Although Meta considered issuing Class A common stock to help raise funds, the document noted that Zuckerberg made it clear “that he would not support significant equity financing that would have the effect of reducing his voting power in the Company.” Instead, the new equity incentive will help Meta receive “critical equity capital without affecting Mr. Zuckerberg’s voting power and the unique, creative vision and exceptional management capabilities that helped drive the long-term value as noted above,” the document said.
