On September 15, 2025, the Staff of the U.S. Securities and Exchange Commission’s (SEC’s) Office of Mergers & Acquisition issued a no-action letter to Exxon Mobil Corporation that allows for the adoption of a retail voting program. To address historically low retail shareholder participation, the program would allow ExxonMobil to seek standing voting instructions from retail investors to vote in accordance with the board’s recommendations. This concept, which is sometimes referred to as “client directed voting” or “advance voting instructions,” has been considered for some time. The SEC sought input on the topic in its 2010 concept release on the U.S. proxy voting system.
Features of the Retail Voting Program
The following outlines the key elements of the retail voting program:
- Eligibility: The program will be offered at no cost to all retail investors, including both registered owners and beneficial owners. Every eligible investor will have an equal opportunity to enroll. ExxonMobil plans to communicate directly with registered owners, while communications with non-objecting beneficial owners (NOBOs) and objecting beneficial owners (OBOs) will be conducted indirectly through their banks, brokers and agents.
- Opt-in process: Participating shareholders have two choices for the kinds of matters to which their standing voting instruction would apply: (i) all matters; or (ii) all matters except contested director elections or any acquisition, merger or divestiture transaction that, under applicable state law or stock exchange rules, requires the approval of ExxonMobil’s shareholders.
- Opt-out process: Shareholders enrolled in the program will have the right to withdraw their standing voting instructions at any point without any fees; however, such withdrawals will only affect voting at future meetings for which ExxonMobil has not yet filed a definitive proxy statement. ExxonMobil agreed to send yearly notifications reminding participants of their enrollment and their ability to opt out. For those who choose to apply their votes to all matters, ExxonMobil will provide additional notices ahead of meetings involving contested board elections or significant corporate transactions, offering another opportunity to cancel or adjust their voting preferences.1 At any time, shareholders can also override the standing voting instructions by submitting their own votes using the proxy materials distributed for that meeting.
- Voting mechanics: ExxonMobil’s vote-processing agent will manage the voting process and related administrative tasks for the retail voting program, facilitating communication between the company, shareholders, brokers and banks. Any sensitive information will stay within the vote-processing agent’s system and will not be shared with ExxonMobil. Votes submitted through standing instructions will occur after ExxonMobil files its final proxy statement but before the proxy statement is sent to shareholders. Shareholders enrolled in the program will always have the right to choose to cast their own votes using the proxy materials if they wish to override the standing instruction. ExxonMobil agreed to provide information about the program in its proxy statements and ensure that shareholders know they can opt out or override their vote, with banks and brokers helping communicate with beneficial owners.
Takeaway Points
- Companies that wish to increase retail shareholder voting should evaluate their shareholder base, historic retail voting patterns and the potential costs and benefits of establishing a retail voting program similar to the one ExxonMobil is implementing.
- We have communicated with the SEC Staff regarding the steps other companies would need to take to establish a similar program, including whether each company would need to seek its own no-action letter response from the SEC Staff. The Staff has confirmed it is open to other companies adopting similar retail voting programs and indicated that companies that closely follow the approach outlined in the ExxonMobil no-action letter do not need to seek their own no-action relief.
- The SEC Staff, however, has requested that for now companies or their counsel speak to the Staff before proceeding in reliance on the ExxonMobil no-action letter. Companies with programs that differ in structure, technology or implementation should carefully assess whether their approach fits within the same parameters or should otherwise seek their own no-action relief from the SEC.
For additional information, see the no-action request by ExxonMobil to the SEC.
ENDNOTE
1 Although the no-action letter does not address the timing of any such additional notices in the context of a contested board election or a significant corporate transaction, in many instances the company will likely send such additional notices at or around the time of filing the preliminary proxy statement.
This post comes to us from Skadden, Arps, Slate, Meagher & Flom LLP. It is based on the firm’s memorandum, “SEC Grants No-Action Relief for Retail Voting Program,” dated September 18, 2025, and available here.