Zuckerberg Agrees to Stay in California for Eight Years

Meta CEO Mark Zuckerberg has agreed to remain in California for eight years under a new stock agreement designed to discourage his departure amid a proposed billionaire wealth tax. A regulatory filing released Wednesday, October 21, 2026, detailed the arrangement, which could leave Zuckerberg facing billions of dollars in one-time taxes if California voters approve Proposition 40 next month. The ballot measure proposes a one-time 5 percent tax on stocks and other assets held by billionaires in California as of January 2026.

According to the filing, the proposal could face legal challenges even if voters approve it. During a September 9 dinner with Meta board members, Zuckerberg said he was considering leaving California because of the proposal. He also planned to list his Palo Alto home for sale four days later, according to the company's 109-page filing.

The prospect of losing Zuckerberg's physical presence raised concerns among Meta directors as the company pursues costly artificial intelligence projects. The board's special committee included attorney Robert Kimmitt, venture capitalist Charlie Songhurst, and DoorDash CEO Tony Xu.

The committee cited the company's experience during the COVID-19 pandemic, when Zuckerberg's inability to be physically present with management created challenges. The filing said the committee wanted to avoid a similar situation in the future. Within days of the September dinner, Zuckerberg and the special committee reached an agreement linking his ability to sell a new class of company shares to his continued residence in California. Meta finalized the arrangement a week before Wednesday's announcement.

The filing said, "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." Under the plan, Meta will create a class of nonvoting shares distributed automatically to existing shareholders in proportion to their current holdings. The new shares could help finance the company's substantial investments in AI data centers without reducing Zuckerberg's existing voting control.

Under the agreement, which Meta calls the Founder Alignment Agreement, Zuckerberg can sell 20 percent of his new shares to cover any taxes he owes. He can sell the remaining 80 percent in installments over eight years, provided he continues living in California. Early sales of those remaining shares would require him to sell some of his voting shares, unless unforeseen circumstances make it prudent or advisable for him to live elsewhere.

The agreement also ties his residency obligation to the location of Meta's headquarters, leaving open the possibility that both Zuckerberg and the company could relocate to another state. The filing stated, "The goal is to keep Zuckerberg continuing to lead the company from California and in close proximity to Meta Superintelligence Labs," the unit responsible for the company's recent Muse AI models.

The arrangement comes as some wealthy Californians have reportedly considered leaving the state over the proposed tax. Google cofounders Sergey Brin and Larry Page are among the billionaires widely believed to have departed California over the potential levy, while Zuckerberg purchased a home in Florida in February, according to The Wall Street Journal.

Many wealthy individuals reduce their taxable income by borrowing against their stock holdings and taking relatively small salaries. Zuckerberg's annual salary at Meta is $1, according to the source report. Polling cited in the report suggests Proposition 40 may fail to win enough votes. Opponents of the measure have spent approximately $129 million campaigning against it, according to the report.