In brief
Meta has struck a new deal with CEO Mark Zuckerberg to keep him in California by granting additional stock shares, cushioning him against a one‑time 5 % wealth tax on fortunes over $1 billion. The agreement—deemed a “Founder Alignment Agreement”—provides annual share allocations without altering Zuckerberg’s control, extending the benefit for eight years as long as he remains a California resident. Meanwhile Meta ramps up AI investment, planning $145 billion this year, which has pushed its shares below $1 billion per share and wiped over $100 billion of market capitalisation. Despite the tax proposal’s uncertainty, the deal signals the company’s commitment to retain its head despite looming regulatory and economic pressures.
Meta has announced a new 'Founder Alignment Agreement' with chief executive Mark Zuckerberg aimed at keeping him in California amid a proposed one‑time 5% wealth tax on net worths exceeding "$1 billion".
The deal gives Zuckerberg, whose wealth is estimated to top "$200 bn" (£149 bn), extra shares on a quarterly basis that he can sell, helping to offset the potential tax haul if the measure passes.
The California bill would levied a 5% levy on residents with a net worth above "$1 billion", which could cost Zuckerberg around "$10 bn" in state taxes.
Meta’s board called the agreement 'critically important' for maintaining its leadership from California amid rapid AI development and restructuring after the pandemic.
Under the agreement, a new class of stock has been created via a split; Zuckerberg will receive one new share for each existing share, allowing him to liquidate holdings more frequently without changing his control.
The arrangement lasts eight years, as long as Zuckerberg remains a California resident, and it will continue even if the one‑time tax does not pass.
Beyond the tax deal, Meta is pushing a $145 billion AI budget this year, the largest ever spent by a single tech company in a single calendar year, which has led to a negative cash flow and a >7% drop in its shares, wiping over $100 billion in market cap.
The split also gives Meta a tool to finance future AI work, CFO Susan Li said, noting that the new shares provide liquidity for future investment rounds.
