The Office of Mergers and Acquisitions in Securities and Exchange Commission’s (the “Commission”) Division of Corporation Finance recently published two no-action letters agreeing not to recommend enforcement action related to certain Exchange Act rules as applied to retail investor voting programs. These letters build on a no-action letter issued in fall 2025 to The Exxon Mobil Corporation (the “Exxon Letter”), which permitted retail investors to provide standing voting instructions to vote in accordance with management’s recommendations on proposals in Exxon’s annual proxy statement, either on all such proposals or those other than contested director elections and certain other transactions. These letters expand the ability of issuers to establish similar voting programs, and are consistent with the Commission’s current focus on proxy solicitation and voting issues.
In the first of these letters, published September 28th, the Staff addressed a proposed Voting Instruction Program (the “VIP”) to be operated by The Goldman Sachs Group, Inc. (“Goldman Sachs”). Under the VIP, retail investors will be able to opt in and out of the program, override standing instructions, will continue to timely receive a definitive proxy statement, and will receive at least annual reminders of their enrollment in the program and their voting instructions, among other investor protection features. The proposed VIP would also include features directed at current and former Goldman Sachs partners and employees, who collectively hold a large amount of Goldman Sachs’ outstanding shares.
The second letter, issued to Tesla, Inc. (“Tesla”) September 29th, describes similar issuer voluntary retail voting programs (“IVRVPs”), although it requested and received slightly more expansive relief from relevant Exchange Act rules. Notably, the Staff’s response letter acknowledges that other issuers operating an IVRVP in the manner described in the Tesla letter may also rely on the letter, which may encourage more companies to adopt similar programs.
The incoming letter from Tesla stresses the importance of retail investor participation, as well as the current low rates of retail investor voting (“[a]ccording to data collected by Broadridge Financial Solutions, retail investors voted only 28% of the shares they owned during the 2025 proxy season, while 76.6% of shares held by institutional investors were voted”) and the challenges to voting public company shares. In its letter, Goldman Sachs characterized Exxon’s VIP as “an important advancement for retail investors, allowing them the choice to opt in to Exxon’s VIP and achieve greater efficiency in exercising their voting rights without a reduction in the protections afforded by the Exchange Act proxy rules.” Tesla also highlighted the efficiencies these program can create for issuers, noting that such programs can “meaningfully reduce” the cost of retail investor participation.
Activist shareholders criticized the Exxon Letter, stressing the fact that, instead of focusing on investor choice, these standing vote programs mandate that shareholders vote with management on some or all shareholder proposals, and, in practice, require that investors make a voting decision before they receive a proxy statement. It is likely that similar concerns will be raised about the two new letters, magnified by the Commission’s proposed rescission of Rule 14a-8 (read more here) and changes to Rule 14a-4, which would facilitate the use of discretionary voting by issuers.
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