Texas-incumbent universe · TBOC §21.552 derivative-suit threshold
Texas Senate Bill 29 lets a company require that anyone suing the board on the company's behalf actually own a meaningful stake — up to 3% of shares — before the suit can proceed. It is an opt-in: moving to Texas, or already being a Texas company, doesn't impose it; a firm has to write the 3% floor into its own charter or bylaws. We tracked who actually elected it and asked whether investors repriced the announcement. Across the verified adopters the answer is the same as the broader reincorporation wave: no detectable announcement-day reaction. A null here is neutral, descriptive evidence — not a verdict on whether the threshold is good or bad policy.
Every count on this page is bound to one canonical object and hydrates from the live dataset; the denominator and any contested figure are flagged in the data-lock panel at the foot of the page. The 3% figure is the statutory ceiling under TBOC §21.552(a)(3) — a charter or bylaw may set a lower floor.
SB 29 added §21.552 to the Texas Business Organizations Code. It raises the bar for who can bring a derivative suit — a suit filed by a shareholder in the company's name against its own directors.
Before a shareholder can sue the board on the company's behalf, a Texas company can now require that the shareholder — alone or in a group — own at least a set percentage of the company, up to 3%. A single-share gadfly plaintiff no longer has standing. The rule is permissive, not automatic: the company must affirmatively write the floor into its charter or bylaws. Most Texas companies have not done so. The ones that have are listed below, each tied to its own filing.
§21.552(a)(3) lets the corporation set a derivative-standing threshold measured on outstanding shares; the statute caps the electable figure at 3% (a ceiling on the corporation's election), and the elected figure becomes the plaintiff's minimum-ownership standing threshold. Standing requires
where \(s_{\text{plaintiff}}\) is the plaintiff (or plaintiff group's) beneficial holding and \(S_{\text{outstanding}}\) is total outstanding shares at the time the proceeding is instituted. This is a distinct instrument from §21.373 (the SB 1057 shareholder-proposal threshold, measured on voting shares) — different denominators, different bills, different elections.
Election into §21.552 takes several shapes. Some firms were already in Texas; some moved in and adopted on the way; one cited the statute only to decline it; one adopted then reversed. The scoreboard keeps each category separate.
Plain-English gloss: eight Texas companies that never moved have written the 3% derivative floor into their bylaws; four companies adopted it as part of moving to Texas; one company (ArcBest) deliberately rejected the floor while citing the statute; one (International Bancshares) adopted it and then took it back; and one earlier candidate (United States Antimony) turned out never to have moved to Texas at all.
Each step is one firm writing the 3% floor into its operative instrument, dated to the bylaw or charter effective date. The single down-step is International Bancshares reversing its election.
What this chart proves. Adoption arrived in a thin, stepwise trickle — one or two firms a quarter — with a single reversal (IBOC). Under either weighting, uptake never accelerates into a stampede. That shape is the signature of the Early-Adopter phase of normal diffusion (Rogers 1962; Moore 1991), not an abnormal market rejection of the statute. Hover any step for the firm, effective date, and EDGAR accession.
One grid, every firm that touched the Texas governance menu, every mechanism it used. Each filled cell links to the firm's own operative instrument on EDGAR. This is the structured replacement for a prose roster — sortable, and honest about the cells still in dispute.
What this grid proves. Adoption is real but narrow: eight already-Texas incumbents and Tesla wrote the literal 3% floor; four migrators reached it through the §21.419 election route (light cells) — which is why a plain "21.552" keyword search misses them. One firm opted out, one rescinded, one was refuted. The two §21.373 cells marked "?" (DDS, FWDI) are disputed, not asserted — flagged pending the rev138 ledger re-sync, never counted as confirmed.
For each adopter we measure the stock's Day-0 abnormal return around its §21.552 adoption date — the return left over after subtracting what a market model predicts. If electing the 3% floor mattered to investors, those points would cluster away from the dashed zero line.
Think of each adoption as flipping a switch and watching whether the stock reacts that day, controlling for what the whole market did. The cleanest read is Southwest — already a Texas company, no move muddying the picture — whose Day-0 abnormal return was about +0.09% (p ≈ 0.96): indistinguishable from zero. Every other clean incumbent lands on the same verdict. The pooled-mean diamond straddles zero. Tesla's point (grey) is shown but set aside: its election sat next to a much larger Delaware-to-Texas move, so its reading is confounded.
What this chart proves. Every clean incumbent's 95% confidence interval crosses zero, and the pooled-mean diamond is centred on zero. Under both the parametric test and the distribution-free Corrado (1989) rank test, no adopter shows a Day-0 reaction distinguishable from noise. This is an honest null: "no detectable effect" — not "proven zero," because the cohort is small (see the power panel below).
For firm \(i\) the market-model abnormal return on the event day is \(AR_{i,0}=R_{i,0}-(\hat\alpha_i+\hat\beta_i R_{m,0})\), with estimation-window residual standard error \(\hat\sigma_i\). The parametric Day-0 test is the standardized statistic
Because Patell-type tests are sensitive to fat tails and event-induced variance, we also report the distribution-free Corrado (1989) rank statistic, which replaces returns with their within-firm ranks and is robust to non-normality. Pooling is equal-weighted across the clean incumbent reads; the confounded migrator (Tesla) is excluded from the pooled diamond. Inference is read against Brown & Warner (1985) and MacKinlay (1997); for the cross-firm multiplicity we defer to the Romano & Wolf (2005) step-down battery reported on the cohort page.
A small cohort can only "see" large effects. Before reading the null as "nothing happened," it is worth asking the honest question: what is the smallest effect this design could reliably have detected?
Plain English. With only a handful of clean adopters, the test can reliably catch a same-day move of roughly ±1.5% or larger. The effects the governance literature expects — tens of basis points — sit below that floor. So a null is exactly what an underpowered design returns whether the true effect is zero or merely small. We report it as descriptive, neutral evidence, not a verdict.
The fix is not a cleverer single-day test on these eight firms — it is the cross-firm battery, every sample cut, on the corrected panel. See the cohort event study →.
For a two-sided test at level \(\alpha\) with power \(1-\beta\), per-firm Day-0 standard error \(\sigma\), and \(n\) independent clean reads, the minimum detectable mean effect is
With \(z_{\alpha/2}=1.96\), \(z_{\beta}=0.84\) (80% power), \(\sigma\approx1.45\%\), and \(n=7\) clean incumbent reads, \(\mathrm{MDE}\approx\) 1.53%. Any true Day-0 effect smaller than this is, by construction, undetectable here — so failing to reject \(H_0\) is uninformative about effects in the sub-percent range the literature anticipates. The argument follows the power discussion in MacKinlay (1997).
Every card is verified to the firm's own operative instrument on EDGAR — the bylaw section or charter article that contains the 3%-of-outstanding-shares language. Accession numbers link to the primary source.
The migrator adopters do not cite "§21.552" by number. They elect §21.419 and then write the 3% language directly. A literal "21.552" search misses them — which is exactly why a verification guardrail is needed.
Several firms — Dillard's, Eightco, Forward Industries — implement the threshold by saying "the Corporation affirmatively elects to be governed by Section 21.419" and then writing "at least 3% of the outstanding shares." So if you search a filing for the text "21.552" you won't find them, even though they have plainly adopted the 3% floor. The fix is to search for the §21.419 election together with the 3%-derivative-proceeding language.
§21.419 codifies the business-judgment rule; §21.552 sets the derivative-standing threshold. The two are routinely drafted together but are not the same instrument. The guardrail: a §21.419 election alone is not a §21.552 adoption. The operative instrument must also contain the 3%-of-outstanding-shares derivative-proceeding language for the firm to count as an adopter. Reading a bare "elects §21.419" as a threshold election is a category error — the kind the verification pass specifically caught (e.g., a §21.419-only instrument with no 3% floor is not an adopter).
For each verified adopter we line up the stock's return on the announcement day against what a market model says it should have done. The gap is the abnormal return. If the threshold mattered to investors, those gaps would cluster away from zero.
The cleanest single-firm read is Southwest Airlines — already a Texas company, so there is no reincorporation event muddying the picture. Its announcement-day abnormal return was about +0.09% with a p-value of 0.96: statistically indistinguishable from zero. Tesla's election is harder to read cleanly because it was close to a much larger Delaware-to-Texas move. Pooled across the verified adopters, the announcement-day reaction is null. This is a statement about one day's pricing, not about whether the governance change matters over the years it plays out in court.
SB 1057 added a separate, distinct provision: a shareholder-proposal threshold. It is tracked separately and has its own (much lower) uptake.
§21.373 incumbent adopters: 0. SB 1057 (effective 2025-09-01) lets a Texas company require the lesser of $1,000,000 in market value of voting shares or 3% of voting power — with a holding period — before a shareholder can force a proposal onto the ballot. It is measured on voting shares, not outstanding shares, and is a different bill from §21.552.
The §21.373 regime faces federal-preemption uncertainty under SEC Rule 14a-8 and the Supremacy Clause. With no court ruling yet, Texas incumbents appear to be in a wait-and-see posture. That near-zero uptake is itself informative: if the proposal threshold were unambiguously valuable, more firms would have elected it. (Note: among movers, Dillard's has affirmatively elected §21.373 in its own instrument — so the broader adopter count is not strictly zero; the count above is incumbents.)
A referee at the Journal of Finance or JFE would press four objections before believing the null. We state each one in its strongest form, then give the honest status — what the design can and cannot answer.
The cohort is firms that actually wrote the floor into a charter or bylaw. Firms that considered it and declined, or quietly adopted without an 8-K trigger, are invisible. Adopters may be precisely the firms for whom the change was already priced in.
Open · biases toward null Status: disclosed and directional — the selection pushes the headline toward zero, so the null is conservative, not inflated. Cannot be closed without the full opt-in choice set.
With ~7 clean incumbent reads the minimum detectable Day-0 effect is roughly ±1.5%. The governance literature expects effects an order of magnitude smaller. A null is the mechanical output of an underpowered design.
Open · power-limited Status: quantified in §06 (MDE ≈ 1.53%). We report "no detectable effect," never "proven zero." Resolved only by the cross-firm battery on the corrected panel.
Several adopters are controlled or founder-led (e.g., concentrated-ownership incumbents). A derivative-standing threshold changes little for a firm whose insiders already dominate litigation risk — so a null could reflect the sample, not the statute.
Open · sample-dependent Status: acknowledged; the page does not condition on controller status. The cohort study carries the controller column and Heckman HQ-state correction.
Migrators elect §21.419 and write "3% of outstanding shares" without ever naming §21.552. A naive keyword tally under-counts; a careless one over-counts a bare §21.419 election as a 3% adoption.
Handled · guardrail enforced Status: every migrator cell requires the literal 3%-of-outstanding language in the instrument (§08). A §21.419 election alone is not counted. The two disputed §21.373 cells (DDS, FWDI) are flagged, not asserted.
The page earns trust by drawing the line itself — separating the claims the filings settle from the items a reviewer should see flagged before citing.
data.json ↔ §150.8 ledger re-sync — the Panel A denominator hydrates live (fallback 59); the re-sync is owed.The page earns trust by stating its own limits first: which numbers are settled to the §150.8 ledger, and the one open data-reconciliation item a reviewer should see before citing the denominator.
data.json and is the open re-sync item below.Every number on this page is bound to a single object and hydrates from the canonical dataset; resolve the flagged item in the canonical workbook and every surface above updates at once. No adopter count is hand-typed into the layout.