On September 15, 2025, Exxon Mobil Corporation submitted a no-action request to the Securities and Exchange Commission (SEC) in connection with its proposed retail shareholder voting program. Later the same day, the SEC’s Office of Mergers and Acquisitions granted the request, confirming that it would not pursue enforcement action against Exxon’s proposed Retail Voting Program.
The Retail Voting Program
Exxon’s Retail Voting Program is designed to increase and leverage retail investor voting. Under the program, retail investors can issue a standing instruction to automatically vote their shares in line with the recommendations of the board at annual and special shareholder meetings. Under Exxon’s current structure, the Retail Voting Program will not cover corporate actions taken by shareholder written consent. The program will be offered to shareholders of record and beneficial shareholders. Exxon will communicate directly to registered recordholders, and communications to beneficial owners will be conducted indirectly via their banks, brokers, or plan administrators. The actual voting of participating shares, as well as related communications, will be facilitated by Exxon’s vote processing agent, which will confidentially maintain relevant voting information.
Shareholders who opt into the Retail Voting Program will have two choices: (1) apply the standing voting instruction to all matters; or (2) apply the standing voting instruction to all matters except contested director elections or transactions that require shareholder approval under federal or state law.
A sample invitation to the Retail Voting Program is included in Exxon’s recent Schedule 14A filing.
Program Rationale
Historically, retail investors have voted less often than institutional investors. In its no-action request, Exxon noted that retail investors held nearly 40% of Exxon’s shares but only about 25% of those shares were voted at the last annual shareholder meeting. Exxon argued that its retail investors were frustrated by the burdensome requirements of traditional voting processes, which the Retail Voting Program simplifies.
Exxon stated that the Retail Voting Program’s implementation is supported by the voting patterns of its retail shareholder base, noting that in the past five years, about 90% of the retail investors who voted at meetings supported all the board’s recommendations. As described by Exxon, “enrollment in the program is a safeguard for those who want to ensure that their vote is actually cast in alignment with the Board’s recommendations in an efficient manner, but it does not interfere with their rights and ability to vote at shareholder meetings.”
Legal Compliance
Exxon stated that the proposed Retail Voting Program is valid under New Jersey state law, where the company is incorporated; New Jersey state law allows proxies to be valid for up to 11 months, or longer if provided by the proxy. Exxon also argued that the proposed Retail Voting Program does not violate Delaware state law, which allows proxies to be valid for up to three years, or longer if provided by the proxy.
Under federal law, Rule 14a-4(d)(2) and Rule 14a-4(d)(3) of the Securities Exchange Act of 1934, as amended, generally prohibit proxies that confer authority for more than one meeting. Exxon also argued – and the SEC confirmed – that the proposed Retail Voting Program does not violate these rules because participating retail investors will be able to rescind their standing instructions or override the instructed vote and instead vote via the standard proxy voting process. Participating shareholders may withdraw from the Retail Voting Program at any time, though their withdrawal will only apply to future votes for which the company has not yet filed a definitive proxy statement. Participating shareholders will also be able to override instructed votes cast under the Retail Voting Program by voting through the proxy materials received for that meeting.
The SEC confirmed that it would not pursue enforcement action under Rule 14a-4(d)(2) and Rule 14a-4(d)(3), provided that Exxon maintains the conditions represented in its no-action request, including the following:
- The Retail Voting Program will be made available to all retail investors (beneficial owners and registered recordholders) at no cost.
- The Retail Voting Program will not be available to investment advisers registered under the Investment Advisers Act of 1940 exercising voting authority for client securities.
- Exxon will provide participating retail shareholders with annual reminders of their participation in the Retail Voting Program, including reminders of their ability to withdraw or override the standing voting instructions.
- Participating retail shareholders will continue to receive all proxy materials filed for upcoming shareholder meetings.
- Exxon will make full disclosures of the Retail Voting Program on its website and in its proxy statements.
Takeaways
While the no-action letter was directed specifically at Exxon’s Retail Voting Program, the SEC’s decision indicates that other companies may be able to implement similar programs. These programs may allow companies to reduce proxy solicitation costs, meet quorum requirements, and leverage supportive retail shareholder bases. Companies considering these programs should ensure that investors have sufficient time to opt in before the next annual shareholder meeting.
Alston & Bird can assist companies in evaluating the costs and benefits of implementing similar voting programs, advise on compliance with both federal securities laws and relevant state corporate law, and ensure that these programs and disclosures are prepared in line with the latest guidance.
If you have any questions, or would like additional information, please contact one of the attorneys on our Capital Markets & Securities team or one of the attorneys on our Investment Funds team.
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