On September 15, 2025, the Securities and Exchange Commission’s (the “SEC’s”) Division of Corporation Finance issued a no-action response letter to Exxon Mobil Corporation that allows for the adoption of a retail voting program. The program—designed to address historically low participation among retail shareholders—permits ExxonMobil to seek standing voting instructions from retail shareholders to vote in accordance with the Board’s recommendations.
When explaining its rationale not to seek enforcement, the SEC highlighted the following characteristics of the program:
- the program would be available to all retail investors, on the same terms, at no cost, and each shareholder would be offered the same opportunity to enroll in the program;
- 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;
- retail shareholders that have opted into the program would receive an annual reminder (during periods of non-solicitation) of their opt-in status and selection, and reminded of their ability to opt out and cancel their standing voting instruction with respect to subsequent meetings;
- participating retail shareholders would have the ability and choice to opt out and cancel the standing voting instruction at no cost, as well as the ability to override the instruction with respect to any particular proposal or proposals at no cost;
- the shares of a shareholder that has opted into the program would be voted as recommended by the Board on the day the Company’s proxy statement is filed. The proxy materials would discuss the program and include instructions on how to override the standing vote;
- participating retail shareholders would continue to receive all proxy materials filed for upcoming shareholder meetings and the program would not limit or restrict shareholders from voting at any time using the proxy materials they received for each meeting; and
- the company will make full disclosure of the program on its website and in its proxy statements.
The SEC indicated that the no action letter was based upon specific representations, and that any different facts or representations might require the SEC to reach a different conclusion.
Since the publication of this no-action letter, multiple shareholder advocacy groups have asked the SEC to reconsider it, and an ExxonMobil shareholder has filed suit seeking to enjoin the program and alleging breaches of fiduciary duties by the board of directors. Companies exploring such a program should consider waiting for this litigation and possible regulatory reconsideration to resolve before proceeding.
