Exxon Mobil’s Retail Voting Program Invites Retail Investors to Join the Choir

On September 15, 2025, the SEC’s Division of Corporation Finance issued a no-action letter to Exxon Mobil Corp. confirming that it will not recommend enforcement action under the proxy rules regarding the company’s proposed retail voting program. This no-cost, voluntary program will allow shareholders to authorize the voting of their shares through a standing instruction requiring the company to vote those shares based on the recommendation of the company’s board at each shareholder meeting. These standing voting instructions will remain in effect for all future meetings, unless and until the shareholders elect otherwise and hang up their choir robes.

As of now, the division’s relief does not apply to investment companies, which fall within the purview of the Division of Investment Management. However, the mechanics of the program ought to be of interest to registered investment companies, which are subject to a quorum requirement imposed by the Investment Company Act of 1940 and, like non-investment company registrants, struggle with disengaged retail investors.

The purpose of Exxon Mobil’s retail voting program includes promoting voting by retail shareholders and reducing the time and other burdens incurred by retail investors in the proxy voting process. According to the company, nearly 40% of its outstanding shares are held by retail investors, yet only a quarter of those shares were voted at its most recent annual meeting.

Under the program, participants will receive annual reminders of their enrollment in the program and their standing voting instruction. Participating shareholders also will receive all proxy materials filed for upcoming shareholder meetings. Accordingly, participants will always have the option to override their standing election under the program for any meeting by voting through the proxy materials received for that meeting. However, the program will not be available to investment advisers exercising voting authority over client securities.

Although the staff’s letter also does not apply to registered investment companies, the staff of the Division of Investment Management could decide to sing from the same hymnal and apply a similar analysis to retail voting programs for such companies. Investment companies interested in adopting similar programs to promote voting by retail investors and reduce the costs of satisfying the 1940 Act’s quorum requirement may consider contacting the staff of the Division of Investment Management to discuss no-action or interpretive relief under arrangements similar to Exxon Mobil’s. Relief relating to the statutory quorum requirement of the 1940 Act could be viewed as more significant than the relief that Exxon Mobil requested. But the SEC staff’s openness to working with industry participants under Chairman Paul Atkins’ administration may offer a good opportunity to explore such relief.

On the other hand, some voices are being raised in opposition to the Exxon Mobil no-action relief, including via a class action lawsuit that has been filed in federal court on behalf of the company’s shareholders. So it will probably remain unclear for a while yet who will be in the choir and what song they ultimately will sing.