Meta strikes deal to stop Mark Zuckerberg leaving California over billionaire tax

ByDearbail Jordan Business reporter.

Key points

• The measure, which would impose a one-time 5% tax on state residents with a net worth of more than $1bn (£750m), is yet to pass.
• Nevertheless, Zuckerberg secured a accord with a special committee at Meta after "robust", and "at several points, contentious" negotiations.
• Meta remarked the share agreement was appropriate to ensure Zuckerberg "remains working closely" with the company's AI at its headquarters.
• This, he informed the board, "would raise questions for management of the company going forward".
• Tech firms in the US and globally are spending billions of dollars on developing artificial intelligence and the infrastructure around it.

Meta has agreed a accord with Mark Zuckerberg to stop the Facebook co-founder from leaving California after he threatened to move from the state as of a proposed tax on billionaires.

In practice, the agreement allows Zuckerberg – reportedly one of the world's richest individuals – to sell shares in Meta without losing control of the Californian-based business if he needs to pay a sizeable tax bill.

Notably, the measure, which would impose a one-time 5% tax on state residents with a net worth of more than $1bn (£750m), is yet to pass. Californian residents will vote on 3 November.

California is home to most of the US's technology giants and there are around 225 billionaires who reside in the state, according to the Americans for Tax Fairness campaign group.

Zuckerberg – who has a $226bn fortune according to Forbes' billionaires tracker – had informed Meta's board that it was his intention to remain with the firm for "the foreseeable future".

Nevertheless, he stated he was evaluating relocating his primary residence outside California and, if he listed his home on the real estate market, it "would be public and inevitably noted and commented upon by company employees".

Notably, a special committee within Meta decided it was "critically important" to keep Zuckerberg in a leadership role and in California to manage the firm from its headquarters "during this era of unprecedented challenge and competition in our industry".

It remarked his "talent and leadership have been crucial to our growth, strategy, and stability since our inception, and the special committee wants that to continue".

For now, meta strikes deal to stop Mark Zuckerberg leaving California over billionaire tax remains the part of the story worth watching, and further updates are likely as more details are confirmed.