Samuel Nolledo is a Senior Analyst, Sarah Wenger is a Lead Analyst, and Aaron Wendt is a Senior Director of Research at Glass, Lewis & Co. This post is based on their Glass Lewis memorandum and is part of the Delaware law series; links to other posts in the series are available here.
Key Takeaways
- While a widespread “DEXIT” has yet to materialize, state-to-state reincorporations by U.S. public companies remain in the spotlight.
- Of the 26 reincorporation proposals that went to a vote in the second half of 2025, 16 involved existing companies and 10 involved a SPAC or other business combination.
- Among existing companies, the most common reasons cited for reincorporating were the jurisdiction’s legal environment (81%), Delaware’s franchise taxes and fees (50%), litigation risk (38%) and business operations (25%).
- Only 29% of the reincorporations from the 2025 post-season involved significant or controlling shareholders, compared to 55% during the 2025 proxy season.
- Although average support for reincorporation proposals rose to 86% in the post-season compared to 82% in proxy season, more reincorporation proposals were not approved by shareholders (four, vs. two during proxy season).
On February 27, 2026, more than two weeks in advance of the deadline, the U.S. Securities and Exchange Commission (the “SEC”) adopted final amendments to certain rules and forms under the Securities Exchange Act of 1934 (the “Exchange Act”) to reflect the requirements of the Holding Foreign Insiders Accountable Act (the “HFIAA”). The HFIAA, and the SEC’s related rules, subject officers and directors of foreign private issuers (“FPIs”) to the beneficial ownership reporting requirements of Section 16(a) of the Exchange Act, beginning with an obligation to file an initial statement of beneficial ownership on Form 3 no later than March 18, 2026. Importantly, the SEC’s rule amendments do not go beyond what was required by the HFIAA, providing needed certainty with respect to the scope of this new obligation for insiders of FPIs. Subsequently, on March 5, 2026, the SEC published an order granting an exemption from beneficial ownership reporting requirements under Section 16(a) for officers and directors of certain FPIs. This alert addresses the SEC’s rule amendments and the exemptions therefrom, and provides some potential next steps for FPIs to which the reporting requirements will apply.
Performance based awards have long been championed by proxy advisors and investors as the best way to align executive incentives with shareholder outcomes. Performance awards with a three-year performance period have emerged as the dominant performance horizon in the U.S. as a result. Despite this broad market consensus, some investors have begun to show support for simpler equity structures that deemphasize performance in favor of longer time-based equity vesting periods.
