Mark Zuckerberg threatened to leave California, then Meta board gave him an offer he couldn't refuse

Mark Zuckerberg threatened to leave California as his fight with Meta's board over money and power turned tense. He wanted to sell shares without losing control of the company. But with the CEO's exit on the table, Meta's board eventually came up with a deal he couldn't refuse.

In Short

• Meta needed more money to fund its AI ambitions, but Zuckerberg wanted to retain control
• Zuckerberg’s concerns over a proposed California wealth tax added to the boardroom tensions
• After months of negotiations, Meta made an offer in favour of Zuckerberg

Meta CEO Mark Zuckerberg reportedly threatened to leave California amid a growing dispute with the company’s board over his compensation and voting power. The disagreement also involved concerns over a proposed wealth tax. However, after months of tense negotiations, the board made Zuckerberg stay with a deal that allowed the billionaire to sell some of his Meta shares without immediately weakening his voting control over the company.

The disagreement between Zuckerberg and Meta’s board centred on his compensation, his control over the company and Meta’s growing need for cash to fund its artificial intelligence ambitions. The board of Meta wanted to raise money by creating a new class of shares, but Zuckerberg wanted to ensure that selling his stock would not dilute his voting power. Details of the dispute emerged in a financial document released by Meta on Wednesday, according to a report by The Washington Post.

What was the disagreement between Zuckerberg and Meta’s board?

The disagreement between Meta CEO Mark Zuckerberg and the company’s board began late last year, when Meta’s management realised it would need significantly more money to compete in the artificial intelligence race. According to the financial document, Zuckerberg had already told investors in October 2025 that Meta was spending heavily on AI, arguing that building capacity early was the right strategy despite the risk of a potential downturn.

To raise money, Meta proposed creating a new class of shares that could be sold to investors, used for acquisitions and offered to employees as compensation. While Zuckerberg supported the idea, he wanted to ensure that selling his own shares would not dilute his long-standing power to overrule other shareholders.

The board, however, was not convinced. Directors reportedly felt it would be unfair to other shareholders if Zuckerberg could sell his shares while still retaining full control of Meta. The company had tried a similar plan in 2017 but dropped it after investors sued.

As the talks continued, Zuckerberg’s representatives also pushed for a new compensation package involving a large amount of company stock, similar to the performance-based pay deals of Tesla CEO Elon Musk. Zuckerberg currently receives an annual salary of $1, according to Meta’s filings.

Zuckerberg also considered leaving California

The dispute became more complicated when Zuckerberg said he might need to sell a large number of Meta shares to pay a proposed one-time wealth tax in California. He also repeatedly raised the possibility of moving out of the state. This worried Meta’s board, as directors believed his presence in California was important for the company, especially with its growing AI ambitions.

By early September, the talks had reached a breaking point. The three directors handling the negotiations reportedly even discussed resigning if Zuckerberg refused to compromise.

Things took another turn on September 9, when Zuckerberg told a group of directors that he planned to put his Palo Alto home up for sale four days later. The move could have drawn public attention to his possible departure from California and raised questions about his future at Meta.

The disclosure pushed both sides to move faster. By September 14, they had largely reached an agreement.

Under the deal, Zuckerberg has now agreed to remain a California resident for eight years, with some exceptions. He can sell a limited number of Meta shares without losing his voting power. The longer he stays at the company, the more shares he can sell without affecting his control.

Meta says the new share structure will help it raise money for its AI plans while keeping the founder-led model that has driven the company’s success.

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