A Meta-Zuckerberg California wealth tax deal was revealed on Wednesday night: the company arranged new shares Zuckerberg could sell toward a possible multibillion-dollar bill under the state's proposed billionaire tax, in exchange for an eight-year residency commitment.

New shares for an eight-year promise

Under the agreement, Zuckerberg will receive new shares that could be sold to potentially foot a multibillion-dollar tax bill. In return, he is committed to remain a resident of California, or wherever Meta maintains its base, for eight years. Meta said the arrangement would keep its chief executive living in California, where its headquarters are located.

Why Proposition 40 prompted the move

Proposition 40 goes before Californians early next month and would impose a one-time 5% levy on the roughly 250 billionaires living in the state. Forbes puts Zuckerberg's fortune at $239bn, and he told Meta he had weighed relocating his primary residence, since the measure could land him with a bill large enough to require selling voting shares to cover it.

A stock split that protects control

Meta is also creating a new class of non-voting shares through a two-for-one stock split for all existing shareholders. The move matters for the founder's grip on the company:

• •The new class C shares go to every existing shareholder as part of the split.
• •Zuckerberg could sell some of these class C shares to pay a potential tax bill without diluting his control of the company.

Opposition to the tax and Meta's quarter

Recent polling shows Prop 40 short of majority support, and tech billionaires have been spending heavily to fight the measure, including the Google co-founder Sergey Brin, alongside Peter Thiel and Eric Schmidt. US congressman Rohit Khanna, who represents California's 17th congressional district, dubbed Prop 40 a choice between standing with the working class or the oligarchs.

Khanna's remarks, including his call for billionaires and trillionaires to pay their fair share, appeared in a piece he wrote for the Guardian. The deal was announced the same day Meta reported results: quarterly revenues rose 26% to $64.6bn, beating expectations of $63.3bn, while profits fell 37% to $13bn, dragged down by a $9.9bn charge tied to its child protection and social media addiction lawsuit.

Also on Wednesday, a judge in New Mexico ordered Meta to pay $25bn after a trial found it misled the public about its handling of Facebook user data. Meta's headcount stood at 66,775 at the end of September, 15% fewer than a year ago.

Californians vote early next month on Proposition 40, which recent polling shows short of majority support.