I understand HB 4115 will be voted on the Texas House floor this week. SB 1057 has already passed the Senate. If the bill is signed into law, companies like Tesla, which have not yet filed their proxies, could opt into the bill’s provisions by amending their governing documents and including that information in their proxy. By doing so, they could exclude all shareholder proposals that have been submitted, such as John Chevedden’s to eliminate supermajority requirements and mine to declassify the board.
UPDATE 1/27/2026
- South Carolina – H. 4985
- Nebraska – LB 728
- Indiana – HB 1273
- West Virginia – SB 417
- Mississippi – SB 2676
- Wisconsin – SB 879
- Kansas – SB 375
HB 4115 impact
UPDATE 5/6/25: The bill passed 45 to 5. Institutional investors didn’t bite; they didn’t even bark. I asked one of my legal advisors (a common AI tool), can the Tesla board opt into the provisions of HB 4115 without shareholder approval?
Tesla’s bylaws currently allow the board of directors to amend or repeal bylaws, with the condition that certain sections, such as those relating to the election of directors, require shareholder approval. Specifically, amendments to bylaws that govern director elections or related provisions would need approval from shareholders owning at least 66 2/3% of the voting shares.
In short, yes.
We could then take Tesla to court, arguing federal preemption. However, that would be a very expensive process, especially going up against the richest man in the world.
All readers should take whatever action they can. Those in Texas can quickly send your opposition to the entire House.
Select HB 4115 from the bill list.
Choose “Against”
Paste your letter or a condensed version into the comment box. (Draw from my summary below.)
HB 4115: Best Guess at House Member Emails (in batches of 30 each)
HB 4115: Summary of My Letter in Opposition
Public Comment on HB 4115 / SB 1057 – Oppose
My name is James McRitchie, and I am a long-time small shareholder in over 200 public companies. Over the past three decades, I have filed hundreds of shareholder proposals—many of which were voluntarily adopted by boards before coming to a vote. These proposals include reforms like declassifying boards, requiring majority voting in uncontested elections, eliminating supermajority requirements for bylaw amendments, and allowing a “right to cure” in director nominations. These are common-sense governance improvements that protect investors and strengthen markets.
HB 4115 and SB 1057 would silence responsible long-term investors like me. This legislation would impose harsh new restrictions, including:
Requiring $1 million or 3% ownership of voting stock,
Limiting eligibility to those who have held shares for only 6 months,
Requiring solicitation of 67% of shareholders before a proposal can appear on the proxy.
These thresholds would eliminate the ability of small and mid-sized shareholders—even those with long holding periods—to raise governance issues. Shareholders who meet the SEC’s longstanding Rule 14a-8 standard of $2,000 for 3 years would be completely excluded. In practice, only the largest institutions—many of which have never filed a proposal—would be able to participate.
This bill contradicts 80 years of federal law under the Securities Exchange Act of 1934 and SEC Rule 14a-8, and risks being preempted under the Supremacy Clause of the U.S. Constitution. No other state has adopted such restrictive measures, and courts will likely strike it down if challenged.
Worse, the bill comes amid a national campaign to suppress shareholder voices. Shareholder proposals are not “distractions”—they are non-binding tools that allow owners to raise concerns before risks become crises. Retail investors flagged subprime lending before 2008, opioids before mass litigation, and AI harms before regulatory crackdowns. These proposals often cost companies nothing more than a 500-word inclusion in a proxy statement—and have helped prevent far greater harm.
Opposition to this bill includes:
Legal scholars such as Stephen Bainbridge (UCLA) and Brian Quinn (Boston College),
Investor coalitions like the Interfaith Center on Corporate Responsibility and the Shareholder Rights Group,
Hundreds of investors—large and small—who view HB 4115 as a dangerous rollback of shareholder rights.
This is not about politics. It is about ownership. If you own a piece of a company, you should have the right to speak—regardless of your wealth. HB 4115 sends the wrong message: that only the ultra-wealthy deserve a voice in the companies they co-own.
I urge you to reject HB 4115 / SB 1057. Preserve investor rights, support long-term governance improvements, and respect the role that small shareholders have always played in making U.S. markets resilient and accountable.
HB 4115: My Letter of Opposition
James McRitchie
9295 Yorkship Ct
Elk Grove, CA 95758
jm@corpgov.net
May 5, 2025
The Honorable Morgan Meyer
Morgan.Meyer@house.texas.gov
Texas State Capitol
1100 Congress Avenue
Austin, TX 78701
Re: Opposition to SB 1057 / HB 4115 — Silencing Shareholders, Undermining Governance
Dear Representative Meyer,
My name is James McRitchie, and I write to express my strong opposition to SB 1057 and HB 4115—bills that would dramatically curtail shareholders’ ability to submit proposals at Texas-incorporated public companies such as Tesla, Sysco, and Waste Management, if they choose to opt in.
As a small, long-term shareholder in over 200 public companies, I have filed hundreds of shareholder proposals over the past three decades—most focused on strengthening corporate governance in ways that benefit all shareholders and foster long-term value creation. These proposals include:
- Declassifying boards to ensure annual director accountability,
- Requiring majority votes for unopposed director elections,
- Eliminating supermajority thresholds for bylaw amendments, and
- Most recently, ensuring a “right to cure” for shareholder nominations—a reform designed to enhance fairness and reduce litigation.
In most cases, these proposals have not even gone to a vote, because companies—recognizing the merit and growing support—adopt them voluntarily. Others have received overwhelming shareholder backing. This constructive dynamic is precisely how capitalism is supposed to function—through ownership, engagement, and accountability.
⚠️ SB 1057 / HB 4115 Would Silence Responsible, Long-Term Investors Like Me
Under federal SEC Rule 14a-8, small shareholders can submit proposals if they:
- Hold just $2,000 worth of stock for 3 years, or
- Meet higher thresholds for shorter holding periods,
- Without any obligation to solicit other shareholders.
In contrast, this bill would:
- Require $1 million or 3% ownership of voting securities,
- Limit eligibility to those who have held stock for only 6 months, and
- Impose a burdensome requirement to solicit 67% of all shareholder votes before even being placed on the proxy.
These barriers are not just unreasonable—they are deliberately exclusionary, ensuring that only the wealthiest hedge funds or asset managers can participate, while investors like me—who have consistently driven governance innovation—are shut out.
Proven Reforms Originated from Small Shareholders
Many governance practices now viewed as best practice were pioneered through proposals by small investors like myself and others before me, including John and Lewis Gilbert, Evelyn Davis, and Wilma Soss. These reforms include:
- Say-on-pay votes (now mandated by Dodd-Frank),
- Independent board leadership,
- Majority voting for directors,
- Proxy access, and
- Greater transparency in ESG disclosures.
According to the Shareholder Rights Group, between 2005 and 2018, individual investors’ governance proposals averaged nearly 48% support, often exceeding institutional proposals in impact.
⚖️ Legal Conflict: Federal Preemption and Constitutional Challenges
This legislation is legally vulnerable. By creating thresholds stricter than SEC Rule 14a-8—a regulation grounded in the Securities Exchange Act of 1934—the bill invites challenge under the Supremacy Clauseof the U.S. Constitution.
The SEC’s no-action process and rules under 14a-8 have existed for over 80 years. They are designed to balance shareholder input with corporate governance efficiency. HB 4115 disregards that balance and may be unenforceable due to federal preemption.
Broad Opposition from Experts and Market Participants
Legal scholars and market experts have strongly opposed this legislation:
- Stephen Bainbridge (UCLA Law) warned it could turn Texas into “a Nevada-style haven for lax corporate governance.”
- Brian Quinn (Boston College Law) noted that the bill would attract companies looking to evade accountability.
- Investor coalitions such as the Interfaith Center on Corporate Responsibility (ICCR) and the Shareholder Rights Group stress that the bill is part of a broader trend to suppress shareholder engagement.
These voices join hundreds of institutional and retail investors in denouncing HB 4115 as an unprecedented rollback of investor rights.
Shareholder Proposals Are Efficient, Cost-Effective, and Protective
Shareholder proposals are non-binding, allowing management and boards to act flexibly. They are one of the few opportunities small investors have to raise concerns before costly crises occur.
Consider these examples of shareholder foresight:
- Predatory lending proposals at AIG before the 2008 crash,
- Opioid oversight proposals before mass litigation bankrupted distributors,
- Rail safety proposals before the East Palestine disaster,
- AI and online safety concerns raised before public backlash over child exploitation and misinformation.
The cost to companies? A 500-word inclusion in the proxy—far less than the price of reputational, regulatory, or financial risk left unchecked.
A Personal Appeal to Preserve Shareholder Democracy
Shareholder proposals are not distractions—they are essential to preventing board entrenchment, addressing material risks, and allowing owners to engage responsibly. They allow the market—not the state—to identify and act on systemic threats through voluntary action.
This bill sends a clear message: only the ultra-wealthy deserve a voice in the governance of America’s largest corporations. That message is not only wrong—it is un-American.
I urge you in the strongest possible terms to reject SB 1057 and HB 4115. Uphold the rights of all shareholders—large and small. Preserve a tradition of free-market accountability that has made U.S. capital markets the most trusted in the world.
Thank you for your consideration.
Respectfully,
James McRitchie
Publisher, CorpGov.net
Small Shareholder & Corporate Governance Advocate
cc: Chairman Paul S. Atkins: Chairman@sec.gov
- Commissioner Hester M. Peirce: CommissionerPeirce@sec.gov
- Commissioner Caroline Crenshaw: CommissionerCrenshaw@sec.gov
- Commissioner Mark T. Uyeda: CommissionerUyeda@sec.gov
- Sanford Lewis (Shareholder Rights Group): sanfordlewis@strategiccounsel.net
- Josh Zinner (Interfaith Center on Corporate Responsibility): jzinner@iccr.org
- Jeff Mahoney (Council of Institutional Investors): jeff@cii.org
- Jill E. Fisch (University of Pennsylvania Law): jfisch@law.upenn.edu
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