Corp Fin Allows “Auto-Voting” For Retail Shareholders – Shareholders

On September 15, 2025, the Staff of the Division of Corporation
Finance of the Securities and Exchange Commission said that it will
not recommend enforcement action if Exxon Mobil Corporation
implements its proposed Retail Voting Program. See the no-action
letter available here. Exxon’s proposed program would allow
its retail shareholders to set standing voting instructions to vote
their shares in line with the recommendations of Exxon’s board
of directors, without requiring a separate voting election at each
annual or special shareholder meeting. Retail investors have voted
less frequently in recent years at many companies, and broker
discretionary voting has been significantly limited, both of which
have made it more difficult for companies with large numbers of
retail holders to pass company proposals or to establish a quorum.
The concept approved in the no-action letter was first introduced
several years ago, then-dubbed “client directed voting,”
which, unlike the current approach, would have been available
market-wide rather than company-by-company. Neither ISS nor Glass
Lewis have publicly announced whether they will have views on
Exxon’s proposed program, or whether any views could impact
their proxy voting guidelines for institutional investors.
Institutional investors have voted with the assistance of such
proxy advisory firms as ISS and Glass Lewis for decades, although
investors have been under increasing pressure to monitor and
customize their voting decisions.

The no-action letter emphasizes the following key features of
Exxon’s proposed Retail Voting Program:

• The program would be voluntary and available to all retail
  investors at no cost, including any registered owner or beneficial
  owners holding shares in street name.




• The program would not be available to investment advisers
  registered under the Investment Advisers Act of 1940 exercising
  voting authority with respect to their clients’
  securities.




• Shareholders would have the ability to opt out of the program
  at any time at no cost and would be able to override the standing
  vote instruction with respect to any proposal, also at no cost.
  Participating shareholders would receive annual reminders of their
  enrollment in the program and of their standing voting instructions
  and would continue to receive all proxy materials distributed for
  the company’s shareholder meetings.




• Exxon would publicly disclose the Retail Voting Program under
  cover of Schedule 14A when it is initiated, as well as any material
  changes to the program.




• Participating shareholders would have the choice of having
  their standing voting instructions apply to either all matters
  voted on by the company’s shareholders or all matters except
  special situations, which include contested director elections and
  mergers.

In addition to the federal securities law considerations
addressed by the no-action letter, companies looking to establish a
similar voting program will need to consider the state law
requirements applicable in their jurisdiction, including statutory
requirements and fiduciary duty considerations. Delaware law in
particular provides that proxies may endure for terms exceeding
three years.¹ There will also be a number of process
items necessary to establish such a program, including obtaining
elections from shareholders and coordinating with brokers and their
agents that process proxy materials on their behalf, so companies
will need to plan well in advance of a meeting where they would
want such an auto-voting program in place.

Footnote

1 See Section 212(b) of the Delaware General Corporation
Law.

Corp Fin Allows “Auto-Voting” For Retail
Shareholders

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