Image source, Getty Images Image caption, Meta chief executive Mark Zuckerberg
Meta has agreed to a new deal with chief executive Mark Zuckerberg to prevent him from leaving California over a proposed state tax on billionaires.
The agreement gives Zuckerberg, whose wealth is estimated to exceed $200bn (£149bn), even more shares in Meta to make up for the fraction of his fortune he may lose if the tax wins voter approval in November.
The measure would impose a one-time 5% tax on residents with a net worth of more than $1bn. It would likely see the Facebook co-founder pay around $10bn in additional state taxes.
He secured the deal with a special committee of Meta after "robust" and "at several points, contentious" negotiations, according to a Wednesday financial disclosure.
California is home to most of the US's technology giants and there are around 225 billionaires who reside in the state, according to the Americans for Tax Fairness campaign group.
The wealth of such people, including Zuckerberg, has ballooned in recent years. Meanwhile, his estimated effective tax rate in California was less than 1% , external each year.
Nevertheless, Zuckerberg told Meta's board last month that he was thinking of moving his primary residence out of California, and even selling his property in the state. His main homes in Californa are in Palo Alto and Lake Tahoe.
Such a move "would be public and inevitably noted and commented upon by company employees", Zuckerberg told the board.
It would also "raise questions for management of the company going forward", he claimed.
In response, Meta decided to create more shares of stock in the company in order to give Zuckerberg a way to essentially make up any wealth he may lose through the tax proposal.
Through what's known as a stock split announced by the company on Wednesday , Meta created an entirely new type of stock and gave one new share to each existing shareholder. Zuckerberg is one of the company's largest shareholders and famously controls the company through the design of his holdings.
Through the deal, he will receive more stock, more often, and also be able to sell it on a quarterly basis, according to the company's financial filing. The shares will not change his level control over Meta, but they will allow him to cash in more easily on the company's value.
The deal appears to be effective even if the one-time tax in California does not pass, and will go on for eight years - as long as Zuckerberg remains a resident of California.
Meta called the deal with Zuckerberg its "Founder Alignment Agreement," saying it was "critically important" to keep him leading the company from California given the "dramatic and unprecedented transformation taking place in the tech industry and global economy related to artificial intelligence."
The company alluded to problems the company experienced during the Covid-19 pandemic, when Zuckerberg began working outside of the office and mostly from his large compound in Kauai, Hawaii.
After a surge in hiring at Meta during the pandemic, a whistleblower scandal that led to renewed focus on child safety, and a refocus within the company to building out the "metaverse," which included renaming the company Meta from Facebook, the company began mass layoffs and restructuring.
Layoffs have continued into this year. The company's headcount is down 15% from a year ago, meaning it has shed at least 10,000 workers.
Today, the com…