Mark Zuckerberg planned to ditch California over the proposed 5% billionaire tax — so Meta created new stock to keep him

Meta, in their message, said that Zuckerberg informed them he was “evaluating relocating his primary residence outside California” and that a Special Committee representing the company “believed it is critically important” for him to remain based in the Sunshine State to manage the company in person and “effectively drive our performance during this era of unprecedented challenge and competition in our industry.”

Meta didn’t return Moneywise’s request for comment.

Prop 40 faces pushback — even as it’s projected to raise billions

Zuckerberg, however, isn’t the only one receiving the new Class C stocks. Meta confirmed that all shareholders will get “a dividend of one share of Class C common stock for each outstanding share of Class A common stock and Class B common stock” beginning in January 2027.

The news dropped the same day that a New Mexico judge levied a $25-billion judgement against Meta in a Cambridge Analytica-related privacy case, according to reporting in The New York Times — and a few months after the company agreed to an $18-billion settlement in a case revolving around social media safety.

Meanwhile, it’s far from a sure thing that Proposition 40 will even pass. Recent polls show a slim advantage for those against the proposition — a pushback partially fuelled by opposition from billionaires including Mark Cuban and Google co-founder Sergey Brin — the latter of whom spent $100 million to fight it.

Even Gov. Gavin Newsom, a Democrat, opposes it, citing worries about an overall revenue shortfall and how that would impact public service funding if the tax causes many of the state’s wealthy to relocate — as Zuckerberg suggested he might.

One analysis argues the tax revenue could hit $30 billion, adding the “value of permanently lost income tax collections from departures more than offsets the one-time wealth tax revenue, yielding a net present value of negative $38.9 billion.”

But proponents of Proposition 40 believe the tax could be a boon for the state, with a May 2026 study claiming it “could raise about $100 billion, with comparatively minor impacts on income tax revenue” if enacted.