Meta agrees share deal with Zuckerberg tied to California tax

What was agreed Meta has agreed a new deal with chief executive Mark Zuckerberg intended to stop him leaving California over a proposed state tax on billionaires, the BBC reported on 22 October 2026 ^[1]. The agreement gives Zuckerberg more Meta shares to make up for the part of his fortune he could lose if voters approve the tax in November ^[1].

The proposed measure would be a one-time 5% tax on residents with a net worth above $1bn. The BBC says it would likely cost Zuckerberg around $10bn in additional state taxes, and that his wealth is estimated to exceed $200bn ^[1].

How it works According to a financial disclosure on Wednesday, the deal was reached with a special committee of Meta after negotiations described as "robust" and, at several points, "contentious" ^[1]. Meta announced a stock split that created a new type of share and gave one to each existing shareholder. Under the deal Zuckerberg will receive more stock, more often, and can sell it quarterly ^[1]. The BBC says the shares will not change his level of control, and that the arrangement appears to apply even if the California tax does not pass, running for eight years as long as he remains a California resident ^[1].

The company's reasoning Meta calls it the "Founder Alignment Agreement" and says it is "critically important" to keep him leading the company from California during what it describes as an unprecedented transformation driven by AI ^[1]. The BBC reports that Zuckerberg told the board last month he was considering moving his primary residence out of the state, and that a move would raise questions for management ^[1].

Supporters of the tax have a different view. The BBC cites the Americans for Tax Fairness campaign group as saying around 225 billionaires live in California, and notes that Zuckerberg's estimated effective tax rate in the state was below 1% a year ^[1].

AI spending and investors The deal landed alongside heavy AI spending. Meta said it plans to spend as much as $145bn this year on AI projects and has posted negative cash flow for the first time since it went public 14 years ago, the BBC reports ^[1]. Chief financial officer Susan Li said the stock split would also give Meta more ways to fund future AI spending ^[1]. Meta's shares fell more than 7% on Thursday, wiping more than $100bn off its market value ^[1]. The BBC says headcount is down 15% from a year ago, meaning at least 10,000 fewer workers ^[1].

What it means The story links personal tax policy to the AI race. A single founder-led company is arranging its share structure around both a state ballot measure and a very large investment in AI. For business readers, it is a reminder that capital for AI is costly, that investors react to spending without a clear new revenue stream, and that governance choices at the biggest technology firms can move markets.

Source: BBC News — Zuckerberg wins Meta deal to help him foot bill for possible California billionaire tax