Texas Capital CEO Blames Proxy Advisers as DExit Vote Fails

Texas Capital Bancshares shareholders rejected a proposal to move the bank's incorporation from Texas to Delaware, a vote the CEO attributed to proxy adviser recommendations.

The measure, known as a reincorporation or "DExit," failed to get the required supermajority support at the annual meeting. CEO Rob C. Holmes said afterward that proxy advisory firms ISS and Glass Lewis had recommended against the move, which he argued would have modernized governance and reduced litigation risk.

"We presented a clear case for why reincorporation benefits shareholders, but proxy advisers applied a one-size-fits-all model that didn't account for Texas-specific factors," Holmes said in a statement.

The bank had argued that Delaware corporate law offers more predictability for shareholder lawsuits and director liability. Opponents said the change would weaken shareholder protections under Texas law.

The vote comes as a small but growing number of companies have considered moving their legal home from Delaware after a series of court rulings that some corporate boards found unfavorable. Texas Capital, based in Dallas, is one of the largest U.S. banks by assets still incorporated in Texas.

Holmes said the bank would not bring the proposal again in the near term. Shares of Texas Capital (TCBI) were little changed in aftermarket trading.

The proxy adviser influence on governance votes has drawn increasing scrutiny from corporate executives and some lawmakers. The failed DExit vote adds to that debate.