Meta’s board made Mark Zuckerberg whole while the company shed at least 10,000 workers, and called the indemnity founder alignment. Dearbail Jordan and Kali Hays report in BBC News that Zuckerberg will receive more stock, more often, with the right to sell it every quarter, under an eight-year arrangement that appears to protect him even if California voters reject the proposed one-time 5% tax on residents with more than $1bn in net worth. The bargain depends on his continued California residence. The Wednesday financial disclosure calls the negotiations “robust” and, at several points, “contentious.”
Contentious is healthy. Asymmetry is the problem.
The levy would probably cost Zuckerberg about $10bn and could take effect January 1 if voters adopt Proposition 40 in November. His fortune is estimated above $200bn; his effective California tax rate has been under one percent; and roughly 225 billionaire residents live in the state. Meta announced the new stock arrangement as record quarterly revenue reached $64.6bn.
But the company that made him has shed at least 10,000 workers in a year. Headcount is down 15%. Meta says it will spend as much as $145bn on artificial intelligence this year, has posted negative cash flow for the first time in fourteen years, and saw its shares fall more than 7 percent on Thursday, erasing more than $100bn in market value. A separate report in this paper records a 37 percent profit drop and the same 15 percent headcount cut.
One instrument, two jobs: the man’s tax bill and the company’s negative cash flow.
Let me grant the obvious thing first, because it is true, and because I would rather be hard on an argument than on a man. The charge against this fortune is sound. The earth was given for all; a paper fortune of two hundred billion dollars, held by the man whose company has let ten thousand people go, owes the state that houses him something, and a one-time levy on the very wealthy is not an unreasonable way to say so.
There is an honest case for Meta’s bargain, and it deserves a hearing. Zuckerberg is not interchangeable with another executive. A company trying to recover from the metaverse misadventure and catch up in artificial intelligence can reasonably fear the loss of a founder whose habits, instincts, and public identity are tied to the enterprise. Stock can align a leader with long-term value. And a wealth tax tied to residence can make it costly for a mobile billionaire to leave a state that supplies so much of the technology economy’s common life. There is a fair question, after all, whether public policy should turn a man’s address into a corporate hostage.
His wealth is not cash in a vault but a claim on an enterprise he built. A levy that can be paid only by selling the company is a levy taken from the hostages. I grant the summons.
I do not grant that a summons is a settlement.
The deeper objection is to the remedy. A residence-based tax on unrealized paper makes the state a creditor of the individual and hands a mobile fortune a veto over public life. It taxes the man and leaves the enterprise exactly as it is, which means it leaves the real concentration untouched and asks the individual to pay the bill for a system that made him. It puts an assessor in Sacramento in charge of what a man’s paper is worth. And if it passes, the fiscal health of a state depends upon the continued residence of one man.
A state that must bargain with its own citizen over enforcement of its own policy has stopped governing and started negotiating. Authority and power are not the same thing; we have known that since Burke. A state that buys compliance has only the second.
And none of that is California’s doing. The deeper betrayal is not in the ballot measure at all.
It is in the paper.
A Chicago futures desk teaches the first rule: a claim is not the thing. A futures contract is not corn. A share is not a mill. A split does not by itself dilute a holder’s economic percentage; it changes the unit and, here, the terms of sale. But splitting paper cannot make a business with negative cash flow into a cash-generating business.
The disclosure records that the new shares will not change Zuckerberg’s level of voting control; he controls Meta through the design of his holdings. What the arrangement changes is the speed at which he can turn paper into cash: more stock, more often, with permission to sell quarterly.
Alignment, in other words, means liquidity for one man in a company that has posted negative cash flow for the first time in fourteen years.
His voting control is unchanged. His right to sell more often does not travel to the ordinary shareholder. The stock split gave every existing shareholder one new share, so the distribution can be called universal; the separate agreement gives Zuckerberg more stock, more often, and permission to sell quarterly. The split left every holder’s proportion untouched. The agreement did not.
The distinction is not cosmetic. The ordinary holder receives a claim. The founder receives a claim plus a schedule for turning it into cash.
Alignment is a two-way word. Here it runs toward the man. Meta binds him to California and rewards him with enhanced liquidity; the report describes no corresponding obligation to the workers whose labor bears the company’s choices, nor to the other shareholders whose money remains at risk.
Meta itself pointed to the Covid-19 years, when Zuckerberg began working mostly from his compound in Kauai, Hawaii. The company was not buying continuity on paper alone; it was buying assurance that the founder’s body would remain in the state. That is the human absence the paperwork is designed to prevent.
The special committee was not merely negotiating remuneration. It was writing an exception to a prospective public rule. This is constitutional law inside a corporation: who may make binding arrangements, whose interests yield, and who receives the surplus. Meta made Zuckerberg’s presence in California a corporate covenant and attached a cash register to it. The board did not merely preserve continuity.
It made his indispensability constitutional.
A conservative warning is that unfamiliar systems invite reckless change. But the familiar is not a privilege; a living institution must remain capable of correcting the power it serves. Zuckerberg cannot become a tradition merely because continuity is profitable. This is the betrayal conservatism should despise: an institution preserves itself while excusing one man from its obligations.
Meanwhile, the company’s ledger is hard to confuse with sentiment. Chief financial officer Susan Li said the stock split would also give Meta more ways to finance future artificial-intelligence spending. The board sits over an enterprise that has shed at least ten thousand workers and is spending faster than it brings in, and its first order of business was to insure the man at the top against the law.
The paper that insures him also finances the appetite. The earlier account of Zuckerberg’s eight-year California commitment captured the bargain’s outer form; the ledger shows what stands behind it.
I know what a county looks like after the money goes one way, because I know Adams County. By the time I knew the town, the passenger trains were gone; the division point that built Adams had become a freight-only relic. The regional mills followed in sequence. Port Edwards and Whiting shut. The century-old Wisconsin Rapids mill idled.
The farms went too. Wisconsin’s dairy-farm map was redrawn on a scale that emptied school boards and church councils. Industrial-scale pivots now turn thousands of acres of potatoes a year for the snack trade across several counties, including thousands of acres here. The Catholic parish in this county dates to 1884, and its diocese has been shuttering country parishes. The VFW hall is thinner than it was; the veterans of the older wars died off one by one, and the few younger ones who came home arrived burned out and wounded, with nothing left to bring to the hall. We were spared the frac-sand rush, and golf took some of the same barrens.
None of that is a lament for the old days, and the old days had their own arrangements of power, some of them shameful. The localism I mean is Berry’s and the encyclicals’, not the 1930s Southern Agrarian kind, which was entangled with the Lost Cause and white supremacy and cannot be redeemed by a pleasant letter from me.
What I am describing is not nostalgia but ownership. Who holds the productive assets of a place—the milk, the wire, the grain, the parts catalogue, the data—and whether that holding bears any relation to the people whose lives are made and unmade by it. A levy can be evaded, delayed, negotiated down, and repealed by the next election. Ownership does not leave.
Catholic social teaching does not make property sacred; it binds property to a social function. A founder may own his shares. He does not own the labor of the people who made the company, and title confers no sovereignty over their working lives. Nor does a tax, by itself, make the corporate order more just. It sets a minimum. California cannot reconstruct a board’s accountability, distribute ownership among workers, or give a community a claim on the infrastructure it hosts. If Sacramento becomes the sole counterweight to a private ruler, we have changed the uniform, not the disease.
The counter-model is not another billionaire with kinder manners.
It is ownership with teeth.
The cooperative tradition gives us the instruments: voluntary and open membership; democratic member control; member economic participation; independence; education, training, and information; cooperation among cooperatives; and concern for the community. The people dependent on the asset own it, reap its surplus, and govern its direction.
At Meta’s scale, the hard version would be an employee-ownership trust with real voting rights, elected worker directors, savings or units workers can liquidate without surrendering their claim, and a community stake in the infrastructure a data center occupies.
Every element is harder here. Zuckerberg has designed his control for extraordinary durability. The ordinary equity must remain liquid enough for people to use it. The labor force is dispersed. AI demands capital on a scale that can seduce any board into deferring to the founder. A board accustomed to exception may mistake complexity for necessity. But difficulty is not impossibility. The company that made one man’s presence constitutional can make its governance answerable to more of the people whose labor and capital sustain it.
At the co-op floor in Friendship, I know the discipline: a member does not come to the table to perform obedience; a member comes to decide.
Adams-Columbia Electric, headquartered in Friendship, is the rural electric co-op I mean: roughly 31,000 member-owners across twelve counties, with a board the members elect. It exists because in the 1930s the investor-owned utility looked at the dark places and decided there was no money there. The Rural Electrification Act of 1936 put cheap public credit behind member-owned companies; within a few years, public credit was carrying power lines to farms that private capital would not serve. That is what I mean by public power—not a command post, but credit aimed at an ownership that does not leave.
The principle runs through the law that lets farmers bargain collectively without being treated as a cartel, the Capper-Volstead Act of 1922. Organic Valley in La Farge offers the same pattern in milk: family farms own their marketing machinery together. Mondragon offers it in the Basque country, where tens of thousands work inside worker-owned firms and pay ladders are deliberately compressed.
The old diagnosis is plain: too much capitalism can mean too few capitalists. In a farm co-op, a farmer who buys his feed at the counter owns a piece of the counter and votes on what happens to it—one member, one vote—the only kind of ownership I have ever seen that does not require anybody to trust a benefactor.
And it is harder here than in any of those cases, and I will not pretend otherwise. A cooperative is made of members, not of strategy. It cannot be legislated into existence from a capital that wants the votes of the people it would redistribute to, and it cannot be bought by a foundation with a mission. It takes the members’ own money, which is the only money there is, and it takes decades, which is why from the outside it looks slow.
It has a named failure mode as well. Beatrice Potter called it out in 1891 and the Webbs in 1914: the co-op drifts, the members tire, and a management clique takes the wheel. Nor is it a charm. A member-owned retailer can still waste money; ownership changes who bears the consequences, not whether judgment can fail. It is not a cure for original sin. It is the best form we have found for putting the ownership of a piece of a town’s livelihood into more hands than one, and it fails in knowable ways.
Let the November ballot settle the tax. The question is not whether Zuckerberg owes California $10bn; that question belongs to the voters. The harder question is what kind of corporation America will accept: one in which power is so concentrated that continuity can be purchased with fresh stock, or one in which ownership, vote, risk, and surplus are distributed among the people who make the enterprise possible.
My preference is for the actual over the merely possible—Oakeshott’s preference for “the familiar to the unknown, the actual to the possible.” It is slower than a stock split. It is slower than a tax bill. And unlike either, it stays.
At the co-op floor: one member, one vote; no man untouchable by his own indispensability; workers and communities with a real claim on the enterprise they carry.
Leave the company its life.