Zuckerberg commits to remain a California resident for eight years under Meta share deal, filings show

As of 12:40 a.m. ET, Thursday, Oct. 22, 2026

Meta Platforms founder, chairman and chief executive Mark Zuckerberg has "separately committed, for eight years following the date of the Founder Alignment Agreement, and so long as the Continued Leadership Condition is met, to remain a resident of California or any other jurisdiction in which the Company maintains its corporate headquarters, absent material unforeseen circumstances rendering it prudent or advisable for him to reside elsewhere," according to a Form 8-K that Meta filed with the Securities and Exchange Commission on Wednesday, Oct. 21.

The commitment is part of a Founder Alignment Agreement that Meta and Zuckerberg entered into on Oct. 20 in connection with a recapitalization that creates a new class of non-voting Class C common stock. The Continued Leadership Condition, as the filing defines it, requires that Zuckerberg remain "employed by the Company on the executive team or as the executive chair of the Board, in either case, on a full-time basis."

A preliminary information statement Meta filed the same afternoon links the deal to Proposition 40, a California ballot measure. "If California's Proposition 40, a statewide ballot measure on the November 3, 2026 general election ballot and commonly referred to as the 'California wealth tax,' is enacted as law in California, it is expected that Mr. Zuckerberg could become liable for a significant, multi-billion dollar tax payment based on his ownership of stock in the Company," the statement says.

What the filing says about Proposition 40

According to the information statement, Zuckerberg told the board's special committee that, in light of that potential tax exposure, "he was evaluating relocating his primary residence outside California." The statement describes Proposition 40 as "an initiative on the November 3, 2026 California General Election ballot that would impose a one-time wealth tax."

The statement's account of the negotiations says that at an Aug. 4 meeting Zuckerberg said that, "in light of California Proposition 40, he intended to establish residence outside California, which he had been advised he would need to do before the November 3, 2026 election." At a Sept. 6 meeting, it says, he said he would need to begin taking steps by mid-September in order to establish residency outside California by mid-October.

At a board dinner on Sept. 9, according to the statement, Zuckerberg told the directors present that he planned to list his home in Palo Alto, California, for sale on Sept. 13.

The special committee concluded that Zuckerberg's continued leadership and "his continuing presence at the Company's headquarters in California" were critical, the statement says. "Again, the goal is to keep Mr. Zuckerberg continuing to lead the Company from California and in close proximity to Meta Superintelligence Labs."

The share terms

Meta's board approved the restated certificate of incorporation creating the Class C stock on Oct. 19, based on the unanimous recommendation of a special committee of independent directors chaired by Robert M. Kimmitt, with Charles Songhurst and Tony Xu as members, according to the filings. CZI Holdings, LLC and six Chan Zuckerberg Holdings entities, together holding about 56.1% of the company's voting power, approved it by written consent on Oct. 20. The restated charter is to take effect Jan. 19, 2027.

The board declared a one-time dividend of one share of non-voting Class C common stock for each outstanding share of Class A and Class B common stock, contingent on the restated charter taking effect. The record and payment dates are to be set by the board later, with payment no later than the fifth business day after the charter takes effect, subject to applicable law, according to the filings.

Under the agreement, 20% of the Class C shares issued to Zuckerberg and certain permitted transferees will be freely saleable. The information statement says that portion represents "10% of his overall economic stake in the Company" and that he may sell or transfer it "for any reason, including so that he may pay his potential tax liability under California Proposition 40, if enacted into law, without affecting his majority voting control."

The other 80% is subject to what the filings call the Stapling Condition. For each of those shares sold, Zuckerberg's group must, within two business days after settlement, sell one share of Class A or Class B common stock, convert one Class B share into Class A, or apply previously accrued credits, subject to an adjustment set out in the agreement.

A number of the restricted shares equal to 2.5% of the Class C stock issued to Zuckerberg's group in the dividend is to be released from that condition at the end of each calendar quarter, starting with the first full calendar quarter after the dividend is paid, in which he meets the Continued Leadership Condition at all times. After the 32nd such quarter, which need not be consecutive, all remaining restricted shares are released.

The agreement also requires the board, subject to Delaware law on dividends, to declare a further one-for-one Class C dividend to all shareholders after the first date on which two conditions are both met: the 30-day volume weighted average price of the Class C stock reaches a successive doubling of the Class A stock's 30-day volume weighted average price on Sept. 10, 2026, of $580.60 per share, as adjusted, and the compound annualized shareholder return from that date is no less than 10%. No more than one such dividend may be paid for each doubling.

The information statement says Zuckerberg confirmed he is not seeking additional compensation, that the agreement does not provide for any, and that his $1 annual salary will remain unchanged. As of Oct. 1, he beneficially owned shares representing about 60.6% of Meta's voting power and about 13.4% of its economic interests, the statement says.

How the deal was reached

The board formed the special committee on Feb. 12, 2026, to evaluate possible changes to Meta's capital structure, according to the information statement. The company's stated purposes include creating a publicly traded, non-voting stock it may use for capital raising, employee compensation and acquisitions without diluting the voting power of existing Class A and Class B shares.

The statement says Zuckerberg proposed a dividend of 20 Class C shares for each existing share on Aug. 4 and four for one on Sept. 5, and that a term sheet from his counsel reduced it to one for one on Sept. 10. The committee had earlier proposed a Class C dividend payable only if Proposition 40 became law and a tax payment by Zuckerberg came due. The two sides agreed to a final term sheet on Sept. 14, and the committee approved the agreement on Oct. 14. "These negotiations were protracted and, at several points, contentious," the statement says.

Shareholder approval of the dividend and the Founder Alignment Agreement was not required, according to the statement, and holders of Class A stock were not asked to vote on the restated charter.

What is not known

Whether Proposition 40 will pass. Voters decide the measure on Nov. 3, and the information statement says the special committee discussed "the uncertainty that it would ultimately be approved and introduced into law."

How much tax Zuckerberg could owe if it passes. The filing describes it only as "a significant, multi-billion dollar tax payment."

What would count as "material unforeseen circumstances" allowing Zuckerberg to live elsewhere. The agreement does not define the phrase.

Whether the Palo Alto home was listed for sale. The information statement says Zuckerberg told directors he planned to list it on Sept. 13 but does not say whether he did.

When the Class C dividend will be paid. The record and payment dates have not been set, and the listing of Class C shares on Nasdaq is subject to Nasdaq's approval, according to the filings.