When you are able to grant permission, Am sure definitely the users part of developer would have db_owner privileges.

I think there is limitation for the objects created under dbo schema when we grant execute privilege with 'with grant option' at database level not at object level.

I tried to create objects under user defined schema and able to grant execute privilege on proc in user defined schema to other user.

here are my test queries.

-- log on with login X which has default schema as userdefined_schema

create proc wgo_p1

as

begin

select @@servername

end

grant execute on [userdefined_schema].[wgo_p1] to newuser

-- sunccessful

to confirm this I have created one more schema userdefined_schema_wgo with authorization to login/user Y

create proc userdefined_schema_wgo.wgo_p1

as

begin

select @@servername

end

grant execute on [userdefined_schema_wgo].[wgo_p1] to newuser

-- fails when you execute with login X

and login X can't grant permission to newuser on proc userdefined_schema_wgo.wgo_p1

then authorization on schema userdefined_schema_wgo has been changed to X.

now login X can grant permission to newuser on proc userdefined_schema_wgo.wgo_p1

pre setup: I have granted all the privileges same as you as below:

CREATE ROLE [Developer] AUTHORIZATION [db_owner]

GO

-- Grant database level permissions to the role

GRANT ALTER ANY SCHEMA TO [Developer]

GO

GRANT CREATE FUNCTION TO [Developer]

GO

GRANT CREATE PROCEDURE TO [Developer]

GO

GRANT CREATE table TO [Developer]

go

GRANT SHOWPLAN TO [Developer]

GO

GRANT VIEW DEFINITION TO [Developer]

GO

GRANT EXECUTE TO [Developer] WITH GRANT OPTION

and login X is part of role Developer.

And thank you very much for the scenario, it helped me to explore most of the schema and with grant option stuff.