SB1057

SB1057 lets qualifying corporations opt into higher requirements for shareholder proposals at shareholder meetings. It is not an automatic rule for every public company. The law adds section 21.373 to the Texas Business Organizations Code; chapter 21 defines “corporation” as a domestic for-profit corporation subject to that chapter. To qualify as “nationally listed” under this provision, the corporation must have equity securities registered under federal Securities Exchange Act section 12(b), be listed on a national securities exchange, and either have its principal office in Texas or be listed on an exchange whose principal office is in Texas and which has the Texas securities commissioner’s approval under the specified statute. Final law, subsection (a); BO 21.002; Federal exchange-registration provision, subsection (b); GV 4005.101; GV 4005.102; GV 4005.103.

The corporation must affirmatively opt in by amending its governing documents. It must notify shareholders of the proposed amendment in any proxy statement provided before adoption. Governing documents include the relevant formation and internal-governance documents; this act does not itself establish that any named company has opted in. Final law, subsections (b)–(c); BO 1.002, definition (36).

Subject to the corporation’s governing documents and the exceptions below, a shareholder or shareholder group submitting a proposal must hold voting shares worth at least $1 million in market value or 3% of the corporation’s voting shares, measured when the proposal is submitted. These are alternative ownership thresholds, not two requirements that must both be met. The shares must be held continuously for at least six months before the meeting and throughout the meeting. “Voting shares” means shares entitled to vote on that proposal. Final law, subsections (a)(2) and (e)(1)–(2).

The submitter must also solicit holders representing at least 67% of the voting power entitled to vote on the proposal. That is a solicitation requirement—not a requirement to win 67% support or a new general vote threshold for approval. Director nominations and procedural resolutions ancillary to conducting the meeting are exempt from these subsection (e) requirements. Final law, subsections (e)(3)–(f).

An opted-in corporation must include specific proposal-submission information in any proxy statement it provides, including how shareholders can contact one another to satisfy the ownership requirements as a group. Signed May 19, 2025, the act took effect September 1, 2025. Final law, subsection (d) and section 2; Official history.