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On September 15, 2025, the SEC issued a no-action letter to ExxonMobil for its proposed Retail Shareholder Voting Program that would enable shareholders to provide standing instructions to have their shares voted in favor of the recommendations of the company's board of directors. While this program would otherwise violate Securities Exchange Act Rules 14a-4(d)(2) and 14a-4(d)(3), the SEC's Division of Corporation Finance indicated that it will not recommend enforcement action if the new program is implemented as outlined in ExxonMobil's letter.
Highlights of ExxonMobil's proposed voting program include:
- Its availability to all retail investors, including beneficial owners.
- An opt-in process whereby shareholders' standing voting instruction to vote in line with the board's recommendations could apply to either (1) all matters being voted on or (2) to all matters except those involving contested director elections and acquisition, merger, or divestiture transactions that require shareholder approval.
- A no-cost opt-out option to cancel the standing voting instruction at any time for future meetings (meetings for which the company has not yet filed a definitive proxy statement).
- The ability of shareholders to override their standing voting instructions and vote using the proxy materials they received for the current meeting.
- Annual reminders of their enrollment in the program, their standing voting instructions, and their ability to opt out.
A company considering the adoption of a similar program would need to make sure, among other things, that its jurisdiction of incorporation permits a shareholder to provide standing voting instructions, which is the case in both Delaware and Pennsylvania, among other states. Under Section 1759 of Pennsylvania's Business Corporation Law, an unrevoked proxy is valid for three years from its date of signature, authentication, or transmission unless a longer period is specified in writing within the proxy document. Similarly, under Section 212(b) of Delaware's General Corporation Law, a proxy is valid for a maximum of three years from its date of creation unless it explicitly includes a longer period.
ExxonMobil's new voting program is groundbreaking in part because it establishes a roadmap for other public companies to follow when implementing similar programs. This program may help shift the proxy voting power dynamics away from the larger institutional investors and activists by empowering retail investors, while also having a tremendous influence over corporate governance in the process.
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