In brief
Meta has agreed to a new Founders Alignment Agreement with CEO Mark Zuckerberg to stay in California in spite of a looming 5% one‑time tax on billionaires. The deal includes a stock split that will issue a share to each shareholder quarterly for eight years, giving Zuckerberg a larger sharehold to offset potential tax costs. While the measure would slap the billionaire class with up to £10bn, Zuckerberg’s $200bn fortune means the tax would be a small fraction of his wealth. The announcement sent Meta shares down more than 7%, wiping over $100bn from its market cap, but the company says the split will also fund its aggressive AI spending plans.
Meta has agreed to a new Founders Alignment Agreement with CEO Mark Zuckerberg to stay in California in spite of a looming 5% one‑time tax on billionaires.
As part of the deal the company will issue a new share to each existing shareholder every quarter for eight years. The extra shares give Zuckerberg a larger pool to offset any tax losses if the California measure passes.
California has proposed a tax that would cost holders of more than £1bn net worth up to £10bn. Zuckerberg’s estimated $200bn fortune means the tax would be only a small fraction of his wealth.
The agreement was approved after “robust” and “at several points, contentious” negotiations. Zuckerberg had told the board last month he was considering selling his Californian home and possibly relocating, a move that could spark internal commentary.
Meta says the split also helps the company’s cash‑flow projections. CFO Susan Li said the extra shares will fund its aggressive AI investment, which the board plans to spend $145bn this year.
Stock fell over 7% after the announcement, erasing more than $100bn in market capitalisation, but the deal is seen as a strategic step to keep a familiar leader on board while the state turns a potentially costly tax into a financial safety net.
