Meta Stock Split Deal Will Keep Billionaire Mark Zuckerberg In California

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1:12In an SEC filing, Meta said Zuckerberg told a special committee of the company's board that he was considering relocating his primary residence outside California because he would be liable for a significant multi-billion dollar tax if voters in the state approved the wealth tax ballot measure in November. The billionaire was concerned that paying the proposed tax could force him to sell some of his super voting Class B shares, potentially reducing his voting control in the company from about 60.6 % to 53%, according to the filing. In a separate filing, Meta disclosed that Zuckerberg had signed a founder alignment agreement to remain a resident of California or any jurisdiction where Meta maintains its corporate headquarters while continuing to serve in a full-time leadership role.

1:59Under the agreement, Meta will create a new class of Class C non-voting shares, distributing one new share for every existing Class A or Class B share in January next year, allowing the company to raise money without diluting the voting power of existing shareholders. Meta's board committee argued that it was critically important to keep Zuckerberg in a leadership position near its California headquarters amid intensifying competition in AI. The filing read, the special committee was mindful about the difficulties the company faced during the COVID-19 pandemic, when Mr. Zuckerberg could not be physically present with the company's management team and did not want the company to face similar challenges going forward.

2:41California voters will decide on Proposition 40, a ballot measure that would impose a one-time tax of up to 5 % on certain taxpayers with covered assets valued over$1 billion. Such assets include businesses, securities, art, collectibles, and intellectual property. The state believes the measure could help raise up to tens of billions of dollars over several years. About 90 % of the taxes proceeds would fund public health services. According to our estimates, Zuckerberg's current net worth is$239.3 billion, dollars, making him the world's sixth richest person. Five percent of Zuckerberg's fortune would be about$12 billion, but the Meta CEO's actual liability under the tax, if it passes, would depend on assessment rules.

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3:58with Progressive's accident response. Learn more at Progressive.com. Progressive Casualty Insurance Company and Affiliates. Limited availability in California. Driver is responsible for emergency and towing charges not covered by the policy. Coverage subject to policy terms and conditions.