Meta has reached an agreement with Mark Zuckerberg to prevent the Facebook co-founder from leaving California after he threatened to relocate due to a proposed tax on billionaires.

The deal allows Zuckerberg to sell shares in Meta without losing control of the California-based company, should he face a large tax bill.

The proposed measure would impose a one-time 5% tax on state residents with a net worth exceeding $1 billion. Californian residents are set to vote on the measure on 3 November.

Despite the vote not yet having taken place, Zuckerberg secured the agreement with a special committee at Meta following what were described as "robust" and "at several points, contentious" negotiations.

California is home to most of the United States' major technology companies. According to the Americans for Tax Fairness campaign group, around 225 billionaires reside in the state.

Zuckerberg, whose fortune is estimated at $226 billion according to Forbes, had told Meta's board that it was his intention to remain with the firm for "the foreseeable future."

However, he also said he was evaluating the possibility of relocating his primary residence outside California. He warned the board that listing his home on the real estate market "would be public and inevitably noted and commented upon by company employees."

He added that this "would raise questions for management of the company going forward."

A special committee within Meta concluded it was "critically important" to keep Zuckerberg in a leadership role and in California to manage the firm from its headquarters "during this era of unprecedented challenge and competition in our industry."

Technology companies across the United States and globally are currently spending billions of dollars on developing artificial intelligence and the infrastructure surrounding it.

Meta said the share arrangement was appropriate to ensure Zuckerberg "remains working closely" with the company's artificial intelligence operations at its headquarters.

The company added that his "talent and leadership have been crucial to our growth, strategy, and stability since our inception, and the special committee wants that to continue."