Shareholders approve most 2026 moves to Texas over ISS and Glass Lewis objections

Pay Governance counts 16 companies that had put a Texas move to a shareholder vote by August ^[2]. At the memo's pass rate of about 80%, that comes to roughly 13 approvals and three failures ^[1][2]. A sample that small cannot predict any one company's result. The memo does not name the companies or publish their vote tallies.

ISS and Glass Lewis make the skeptic's case. According to the memo, they argue that a Texas domicile may make derivative suits and other accountability tools harder for shareholders to pursue ^[7]. They also say the state's business court is comparatively new, so it is unclear how governance disputes will be resolved there ^[8]. Optional provisions in Texas law could let a company raise the ownership threshold for filing a proposal, or limit shareholder remedies ^[9]. Finally, the advisors weigh the business rationale a company offers for the move ^[14]. The court objection turns on a short record, and only rulings will answer it. In my view the provisions objection is the one a board controls. The provisions are optional, so a proxy statement that lists the ones the company will not adopt answers that objection directly ^[9].

Opposition from the advisors did not decide these votes. Each firm recommended against 15 of the 16 proposals ^[3]. On the memo's pass rate, about a dozen moves cleared over an against recommendation from ISS ^[3]. The authors describe the approvals as general but not overwhelming, with support varying meaningfully from company to company ^[1].

The choice in front of a board is more discretion for itself in exchange for fewer remedies for its investors. Texas revised its Business Organizations Code through 2025 to give boards faster, more flexible capital frameworks and litigation protections, with the aim of competing with Nevada and other alternatives to Delaware ^[15]. For shareholders, those litigation protections mean the derivative suits that ISS and Glass Lewis say become harder to bring ^[7].

After the vote, the consequence falls on the compensation committee. The memo is by Chris Brindisi and Ryan Peterson of Pay Governance ^[12]. They wrote that compensation committees "should be prepared for heightened governance scrutiny following domicile moves outside of Delaware" ^[11]. When a move is seen as enhancing board discretion and lessening shareholder remedies, they add, pay-for-performance alignment, clear disclosure and credible governance messaging may matter more ^[16]. Suppose a board wins a Texas vote this quarter despite a contested pay record. I'd expect investors to treat its next pay disclosure as the first test of how it uses the discretion it asked for. The authors already list earlier shareholder unhappiness over executive pay among the factors that can swing a domicile vote ^[10].