Delaware Corp Law Council Proposes New Framework for Proposals

Delaware Corp Law Council Proposes New Framework for Proposals

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Public companies with a market capitalization of at least $100 billion would face a strict cap of three precatory proposals per year under new statutory amendments announced by the Delaware Corporation Law Council.

The potential amendments released on November 9, 2026, address stockholders’ ability to make non-binding proposals at public company annual meetings, as reported by Wilson Sonsini Goodrich & Rosati. The drafting by the practitioner body follows a pending U.S. Securities and Exchange Commission proposal to rescind Rule 14a-8 of the Securities Exchange Act of 1934, which has regulated non-binding stockholder proposals for the past 80 years.

The proposed Delaware framework establishes distinct tiers for public companies based on their market capitalization. Tier 1 corporations worth at least $100 billion face a maximum of three precatory proposals annually. Tier 2 corporations valued at $50 billion or more are limited to two proposals, while Tier 3 companies at $30 billion or more contend with a single proposal.

Companies falling below the $30 billion threshold are entirely exempt from precatory proposals. Individual stockholders bringing a proposal must own at least $250,000 of stock, or a lead proponent can combine with up to nine co-filers to reach an aggregate ownership of $1 million. All participating stockholders must maintain continuous ownership for one year.

Tier Market Capitalization Maximum Proposals
Tier 1 At least $100 billion 3
Tier 2 At least $50 billion 2
Tier 3 At least $30 billion 1

Private companies, corporations within five years of an initial public offering, and newly reincorporated Delaware firms are shielded from precatory proposals for their first five years. Corporations may also opt out entirely by adopting a charter or bylaw provision approved by each class and series of voting stock after their fifth anniversary.

Disputes between companies and stockholders regarding excluded proposals would not go through SEC staff review.

The Delaware Corporation Law Council is taking public feedback on the proposed statutory amendments through January 8, 2027. Following the comment period, the legislation is slated for consideration by the Delaware legislature during its spring session.

The Delaware General Corporation Law — Maynard Nexsen

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