On November 9, 2026, the Delaware Corporation Law Council (the Council)—a body of practitioners in Delaware that vets and proposes amendments to the Delaware General Corporation Law—announced potential statutory amendments addressing stockholders’ ability to make non-binding proposals at public company annual meetings. The proposed amendments follow the recent proposal by the U.S. Securities and Exchange Commission (SEC), described here,1 to rescind Rule 14a-8 of the Securities Exchange Act of 1934, which has largely regulated non-binding stockholder proposals for the last 80 years. The SEC’s proposal is pending and as was announced in August 2026, the SEC staff has discontinued its practice of responding to requests from companies for no-action relief to exclude a proposal under Rule 14a-8. The proposed Delaware amendments (the Amendments) are written to become effective if and when the SEC rescinds Rule 14a-8 and would provide the new replacement regime for Delaware corporations. The Amendments would clarify the landscape for Delaware corporations because existing Delaware law does not expressly address the subject.
The Amendments focus on “precatory” or non-binding stockholder proposals—that is, proposals brought by stockholders that are advisory in nature or request or encourage action by a corporation or by its board of directors, generally in relation to a governance, business, social, or environmental matter. Rule 14a-8 provides that a company must include a stockholder proposal in its proxy materials for its annual stockholder meeting if certain procedural and substantive conditions are met. Over time, Rule 14a-8 has become more detailed and complex, and subject to shifting interpretations through court decisions, SEC Staff Legal Bulletins, and staff views in “no-action letters.” Rule 14a-8 does not limit the total number of proposals a company must include in its proxy statement; however, under the rule, a stockholder is limited to submitting one proposal per company per meeting and must meet the minimum stock ownership requirements for such proposals. The ownership thresholds range from owning at least $2,000 of the company’s stock for at least three years, to $15,000 for two years, to $25,000 for one year. The stockholder proposal process often operates as a mechanism for stockholders to seek to exert pressure on a company’s business or its governance and, in many instances, to prompt engagement between stockholder proponents and boards and management.
The Amendments are noteworthy both in how they could affect market practice and in the process by which they will be further evaluated. It is valuable to understand the process first. Specifically, the Council is taking public comment on the Amendments through January 8, 2027, before the legislation would be taken up by the Delaware legislature in its upcoming spring legislative session. The Council also released a White Paper describing the Amendments and the policy choices at play. The Council’s materials, and information about submitting comments, are available at: https://sos.delaware.gov/give-feedback-on-stockholder-proposals-rules/.
As to substance, the Amendments are detailed and include the following key features:
- The Amendments provide paths for stockholders of public companies of a certain size to have a precatory proposal included in the company’s proxy materials, but only if stockholders hold requisite amounts of stock.
- In particular, the Amendments apply to “Tier 1,” “Tier 2,” and “Tier 3” Corporations: companies with a market capitalization of at least $100 billion, $50 billion, and $30 billion, respectively. Tier 1 Corporations can only be subject to a total of three precatory proposals per year; for Tier 2 Corporations, the total is two; and for Tier 3 Corporations, the total is one. A company that does not qualify as a Tier 1, Tier 2, or Tier 3 Corporation will not be subject to precatory proposals. This tiered structure is designed to ensure that only companies with significant resources will have to contend with precatory proposals. Stockholders owning the greatest amount of stock will be able to “fill” these baskets, should companies receive more than the maximum number of proposals. Thus, the greater the ownership, the greater the potential that the proposal will be included, subject to the applicable total maximum number of proposals permitted.
- An individual stockholder must own at least $250,000 of stock to bring a precatory proposal, or a lead proponent can have up to nine co-filers, in which case the group of stockholders must own at least $1million of stock in the aggregate. All participating stockholders must hold the subject stock continuously for one year and provide proof of beneficial or record ownership. This aspect of the Amendments is intended to ensure sufficient stockholder support to warrant the cost of a vote and to respond to criticisms that Rule 14a-8 can be used by small stockholders with insufficient “skin in the game” to influence the stockholder meeting or corporate practices.
- The Amendments specify that they are the only mechanism under Delaware law for stockholders to bring precatory proposals before a meeting. Stockholders are unable to present precatory proposals with respect to various categories of companies: private companies; corporations within five years of their initial public offering (IPO) or going-public event, unless they select otherwise in their certificate of incorporation; and public companies that have newly reincorporated into Delaware, for the first five years. Companies may also opt out of the regime entirely, and thereby avoid precatory proposals, by adopting a charter or bylaw provision. The provision must be approved by each class and series of voting stock, voting separately, at a stockholder meeting held after the fifth anniversary of the company’s listing. Apart from opting out entirely, companies would not be able to alter the regime through their certificate of incorporation or bylaws, whether by adding conditions or by eliminating or reducing any statutory requirement.
- Stockholders must comply with specified deadlines and are permitted to include a supporting statement (limited to 500 words, including the text of the proposal itself).
- Stockholders who submitted precatory proposals in either of the prior two annual meetings pursuant to the Amendments and failed to obtain 15 percent or more of votes cast in such meeting are precluded from submitting proposals.
- The Amendments have fewer bases for companies to exclude proposals than Rule 14a-8 does, in an effort to limit litigation over the rules. The Amendments do, however, provide some exceptions to the proposals that companies must include, for example, a company may exclude a proposal that seeks primarily to redress a personal grievance or expressly questions the character of any nominee for director. Unlike the Rule 14a-8 process as historically administered by the SEC staff, there is no body or agency that will resolve disputes between companies and stockholders; a stockholder disputing a company’s exclusion of its proposal would need to seek action in the Delaware Court of Chancery.
- The Delaware Court of Chancery would have jurisdiction over disputes.
- The Amendments do not apply to binding stockholder proposals, such as bylaw amendments, or to director nominations. Precatory proposals permitted by the Amendments cannot include director nominations or vote-against or withhold campaigns.
- A corporation’s board can choose at its discretion to include additional proposals in the annual meeting materials, and a board can also enter into agreements with stockholders providing for a greater number of proposals than the statutory maximums.
All of these provisions, and others, are subject to comment from the public in the coming months, as noted above, and the comments received could accordingly result in further changes to the Amendments. If Delaware legislation is pursued after that period, it would need to be adopted by the Delaware legislature and the Delaware governor.
The Amendments would only apply to Delaware corporations. As for other states, the Nevada statute does not yet expressly address stockholder proposals. The Texas statute permits certain Texas corporations to adopt provisions in their governing documents imposing an ownership threshold of the lesser of $1 million or 3 percent of a corporation’s shares to bring a proposal (and for such stockholder or group of stockholders to hold such amount for a continuous period of at least six months before the date of the meeting and throughout the duration of the meeting), and stockholder proponents must solicit 67 percent of the voting power of shares held by a corporation’s stockholders in order to bring proposals. The Council’s White Paper notes that its approach was intended to provide a known set of rules to the market and to prevent the use of private ordering that could result in the proliferation of litigation and varying practice over the rules.
The Amendments are the latest example of rapidly developing corporate law and governance. For more information on this or any related matter, please contact any member of Wilson Sonsini’s Corporate Governance practice.
[1] https://www.wsgr.com/en/insights/sec-proposes-to-rescind-rule-14a-8-and-modernize-the-proxy-solicitation-process.html.