Mark Zuckerberg considered packing up and leaving California altogether this year, rattled by a proposed billionaire wealth tax that could have cost him billions — before Meta stepped in with a deal designed to keep him based near its headquarters. The company disclosed the episode in a securities filing, revealing just how seriously its CEO weighed an exit over Proposition 40, the statewide measure California voters are set to decide next month.
According to SFGATE, the disclosure came in a Wednesday Securities and Exchange Commission filing in which Zuckerberg told Meta he was considering relocating because of the proposed tax. Meta reported that he raised the relocation concerns to a special committee as a potential company risk, and the company said his departure could raise employee questions about management. Separately, Politico reports that Zuckerberg informed Meta's special committee he was evaluating relocating his primary residence outside California entirely.
Meta's response was twofold: a commitment for Zuckerberg to remain in California or another jurisdiction where Meta has its headquarters, and to be based near the headquarters, for the next eight years, along with a structural fix for his stock. Politico notes the company would create a new class of share allowing Zuckerberg to sell up to half his economic stake in Meta without giving up voting control. CNBC reports that this new nonvoting Class C common stock will take effect in January 2027, and that Meta said Zuckerberg could face a significant, multi-billion-dollar tax payment based on his Meta stock ownership if Proposition 40 becomes law, according to CNBC.
A September Dinner and a Palo Alto Listing
The timeline behind the filing stretches back weeks. Per Wired, Zuckerberg told Meta board members on September 9 that he was considering leaving California, and he planned to list his Palo Alto home for sale just four days after that board dinner. Zuckerberg owns multimillion-dollar properties in both Palo Alto and Lake Tahoe, per SFGATE's reporting.
Meta has also pointed to pandemic-era precedent in explaining why it values having its CEO nearby. The company said it faced challenges during COVID-19 when Zuckerberg could not be physically present with management, and it told regulators that keeping him near Meta's Menlo Park headquarters remains important. Meta did not immediately respond when asked for comment, according to SFGATE's account of the filing.
Voting Control at the Center of the Deal
Zuckerberg draws just a $1 annual salary from Meta, a figure confirmed by the same Wired report that detailed the September board meeting. His wealth is tied overwhelmingly to his Meta shares, and he currently maintains 61% voting control as the company's chairman. Meta's filing indicates he opposes financing or other actions that would cause him to lose that voting control, which is why the company agreed to issue him additional shares structured to provide liquidity without reducing his voting interest.
Meta said that if Proposition 40 passes, Zuckerberg would likely sell or borrow against his Meta shares to pay the tax — a scenario the new share class is meant to soften without touching his grip on the company.
What Proposition 40 Would Actually Do
Proposition 40 is built around global net worth rather than annual income. According to the California Secretary of State's official voter guide analysis, California residents who were billionaires as of January 1, 2026 would owe a one-time state tax equal to 5% of their net worth, due in 2027 with an option to spread out payments. The tax would be assessed only once, and Zuckerberg would remain responsible for it even if he moved after January 2026.
The measure matters well beyond one CEO's stock portfolio. California depends heavily on progressive taxes on the wealthy to fund its government, and the state's billionaires already pay billions of dollars in income taxes. Proposition 40 supporters argue passing the tax will not trigger an exodus of billionaires, while the broader debate over the measure has become a flashpoint for how California taxes its wealthiest residents.
Economists Split on the Long-Term Math
Independent research adds a wrinkle to that debate. A paper published by the National Bureau of Economic Research estimates the 2026 California Billionaire Tax Act would collect approximately $30 billion, within a range of $28 billion to $36 billion. But the same researchers estimate that publicly confirmed taxpayer migration has already eliminated nearly 30% of the act's wealth-tax base, and they calculate a negative $38.9 billion net present value for state revenues once permanently lost income-tax collections from departures are weighed against the one-time windfall. Across 100,000 simulated revenue and discount-rate scenarios, the NBER authors found 85% produced a negative net present value for the state.
CalMatters notes that experts say there is simply no way to know whether the tax will spark a large-scale exodus of billionaires from the state. Opponents have poured enormous resources into stopping it: campaign finance records show opponents have raised more than $205 million to defeat Proposition 40, with Google co-founder Sergey Brin alone contributing $102 million to the opposition campaign, which also backs Propositions 41 and 42, according to the outlet.
Opponents have raised more than $340 million to defeat Proposition 40. Voters remain divided on the measure according to polling cited in SFGATE's reporting. California voters will decide the measure's fate next month.
