Meta strikes deal with Zuckerberg to protect him from California wealth tax
Meta has struck a deal with Mark Zuckerberg to protect him from the threat of a California wealth tax targeting billionaires.
The arrangement is designed to keep Zuckerberg in California, where Meta is headquartered, while also shielding him from a potential tax bill.
Zuckerberg, worth $239bn according to Forbes, told Meta he was considering moving his primary residence elsewhere because Prop 40 could expose him to a massive tax liability, potentially forcing him to sell voting shares to pay it.
In response, Meta is creating a new class of non-voting shares via a two-for-one stock split for all existing shareholders.
This will allow Zuckerberg to sell some of this new class C shares to pay a potential tax bill, without diluting his control of the company.
“Every society is taxed. The only question is who will pay. In Trump’s America, working people pay more than they should, while billionaires are so unburdened that they are becoming trillionaires. In the America we seek, billionaires and trillionaires will pay their fair share, while working people will be unburdened,”
Californians will vote early next month on Proposition 40 – a one-time 5% tax on the roughly 250 billionaires who live in the state.
Recent polling has shown that Prop 40 remains short of majority support with voters. Tech billionaires have been spending heavily to fight the measure, including the Google co-founder Sergey Brin, the Palantir co-founder Peter Thiel, and former Google CEO Eric Schmidt.
Meta also reported a 26% rise in revenues for the last quarter to $64.6bn, beating expectations of $63.3bn.
But profits fell by 37% to $13bn, dragged down by a $9.9bn charge related to Meta’s landmark lawsuit over child protection and social media addiction failings.
In a separate case, a judge in New Mexico ordered Meta to pay $25bn on Wednesday after a trial found the company had misled the public about how it handled Facebook user data.
Meta also revealed it had cut its headcount to 66,775 at the end of September, 15% fewer than a year ago.
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