Fall 2025 Corporate Communicator

Past Issues

Dear clients and friends,

In this issue of the Corporate Communicator, we discuss Exxon Mobile Corporation’s recently adopted retail voting program. Endorsed by the SEC, the program enables retail shareholders to place an indefinite standing instruction to vote their shares according to the recommendations of the company’s board of directors.

Very truly yours,

Jeffrey E. Beck and Eileen Vernon, Editors

Snell & Wilmer Corporate & Securities Practice Group

By Sarah Richards

On September 15, 2025, the Securities and Exchange Commission (“SEC”) issued a no-action letter approving a first-of-its-kind automatic voting program proposed by Exxon Mobil Corporation (“Exxon”). Exxon’s program enables its retail investors to provide an indefinite standing instruction to vote their shares according to the recommendations of the company’s board of directors. The program presents a potential tool for other public companies to increase voter turnout and achieve quorum against the backdrop of increasing retail shareholder ownership combined with historically low participation in uncontested shareholder meetings. The SEC Staff has given indication that other companies may adopt Exxon’s Retail Voting Program without seeking individualized no-action relief so long as the program mirrors Exxon’s design; however, the SEC Staff encourages companies desiring to implement a retail voting program to speak with the Staff (either directly or through their counsel) to ensure that they will not face any issues with the design of their proposed retail voting programs in their reliance on the Exxon no-action letter.

SEC No-Action Relief

Rules 14a-4(d)(2) and (d)(3) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), generally prohibit voting proxies that extend beyond the next annual meeting or confer authority for more than one meeting. The SEC’s no-action letter, available here, indicated that it would not recommend enforcement based on Exxon’s specific representations, highlighting that: (1) the program will be equally available to all retail investors, including any registered owner or beneficial owner, at no cost, and each would be offered the same opportunity to enroll in the program; (2) the program is not available to investment advisers registered under the Investment Advisers Act of 1940 exercising voting authority with respect to client securities; (3) participating shareholders can, at no cost, opt-out of the program or override their standing voting instruction with respect to any particular proposal; (4) participating shareholders will receive annual reminders of their opt-in status and selection during the time period when the company is not soliciting votes for its annual meeting; (5) participating shareholders will continue to receive all proxy materials filed for future shareholder meetings, and the program will not limit or restrict shareholders from voting at any time using such proxy materials; and (6) the program will be fully disclosed in the company’s proxy statements and on its website.

The Retail Voting Program

Exxon’s Retail Voting Program offers all retail investors — whether they hold shares directly or beneficially through intermediaries such as banks, brokers, or plan administrators — an equal opportunity, at no cost, to set a standing instruction to vote their shares indefinitely per the board’s recommendations, until a participating investor opts out of the program or overrides its preset voting instruction.

Key details and mechanics of the program include: Initial Shareholder Communication — The company communicates program details directly with registered shareholders and indirectly with beneficial owners through their intermediaries — including for both non-objecting beneficial owners (NOBOs) and objecting beneficial owners (OBOs). Exxon’s Schedule 14A¹ filed on September 17, 2025 contains examples of the materials to be distributed to its shareholders, including e-mail invitations and printed letters for both registered and beneficial shareholders, website instructions, confirmation pages, and a dedicated webpage describing the program.

Standing Instruction Options — Shareholders may elect for their standing voting instruction to apply either (a) to all matters, or (b) to all matters except contested director elections and mergers, acquisitions, or divestitures requiring shareholder approval under applicable state law or stock exchange rules.

Voting Mechanics and Proxy Materials — The company’s vote processing agent facilitates all voting and administrative actions under the program at no cost to the participating shareholder. Votes will be submitted pursuant to standing instructions after the company’s definitive proxy statement is filed with the SEC but before it is distributed to shareholders. All program participants will continue to receive full proxy materials identical to those provided to other shareholders.

Opt-Out and Voting Instruction Override Rights — Enrolled shareholders may opt out of the program at any time and at no cost, removing their standing voting instruction for any future meetings for which a definitive proxy statement has not yet been filed. Once the definitive proxy statement is filed and votes are cast in accordance with standing voting instructions under the program, enrolled shareholders may still override those votes cast as per their standing vote by using the proxy card they receive for that meeting. By overriding the standing vote cast, a shareholder voids the standing instruction for that particular vote, but the shareholder’s standing instruction will continue to apply for future shareholder meetings unless and until the shareholder opts out of the program.

Proxy Off-Season Reminders — Outside of the proxy season, participating shareholders will receive annual reminders of their ongoing standing voting instructions, including reminders of their ability to opt out of the program or override their standing voting instruction.  Participants who applied their standing instruction to “all matters” will receive additional reminders before any meeting involving a contested director election or M&A transaction that requires shareholder approval.

Public Disclosures — The Schedule 14A filed with the SEC at the initiation of a retail voting program, such as the one filed by Exxon on September 17, 2025, should describe the various features of the retail voting program. A company that implements a retail voting program must also make full disclosure of the retail voting program on its website and in its proxy statement, including clear explanations of participating shareholders’ opt-out and voting instruction override rights. Shareholders participating in the retail voting program must receive all proxy materials in connection with each shareholder meeting and must have the ability to opt out and cancel or override their standing voting instruction at any time.

Considerations for Retail Voting Program Adoption

Although the SEC’s no-action relief provides a pathway for other issuers to adopt similar retail voting programs, companies should carefully evaluate whether the size and stability of their retail shareholder base justify the administrative and implementation costs and efforts. Further, while the SEC has indicated that companies mimicking Exxon’s Retail Voting Program do not need individualized no action relief, companies looking to adopt programs deviating from Exxon’s design in any way, such as by providing shareholders with additional standing voting instruction choices, will need to seek separate no action relief from the SEC.

Other uncertainties remain, including the reception among investors and proxy advisory firms. Retail investors may be reluctant to opt in to a standing voting instruction, and it is unclear how proxy advisors such as ISS or Glass Lewis will view programs that effectively reinforce management-recommended votes. Companies seeking to implement a similar program in the 2026 proxy season should begin preparations early to design and implement program infrastructure and allow sufficient time for shareholder enrollment. Those that hold off on adoption until after the 2026 proxy season may benefit from observing how Exxon’s and other early adopters perform in practice and how investors and other interested parties (e.g., proxy advisors) respond. In addition, companies should confirm that any retail voting program complies with applicable state corporate law. Exxon has asserted that its program complies with New Jersey² and Delaware³ law, although the issue has not yet been tested in court. Companies incorporated in other jurisdictions should consult legal counsel to ensure compliance with their respective statutes governing proxy authority and shareholder voting. For example, similar to Delaware and New Jersey, Arizona⁴ and California⁵ corporate laws seem to permit indefinite standing voting instructions, provided they are explicitly authorized in the proxy appointment. By contrast, Nevada⁶ law limits shareholder voting proxies to a maximum duration of seven years.

Finally, it remains uncertain how the SEC’s blessing of Exxon’s Retail Voting Program will evolve. On September 30, 2025, As You Sow and the Interfaith Center on Corporate Responsibility (“ICCR”) filed a joint request for the SEC to reconsider and rescind its grant of no-action relief to Exxon’s Retail Voting Program.⁷ In the letter, As You Sow and ICCR argued that the program contradicts the following rules promulgated under the Exchange Act: Rule 14a-4(d)(2), which prohibits a proxy from conferring authority to vote any annual meeting other than the next annual meeting, Rule 14a-4(d)(3), which prohibits a proxy from conferring authority to vote with respect to more than one meeting, Rule 14a-4(f), which prohibits solicitation of a proxy unless a shareholder concurrently receives, or previously received, a definitive proxy statement that has been filed with the SEC, and Rules 14a-4(a)(2), 14a-4(a)(3), and 14a-4(b)(1), which require the form of proxy to provide space for dating the proxy card, clearly and impartially identify each separate matter to be acted upon, and afford the person solicited an opportunity to specify by boxes a choice on each matter to be acted upon.

In its no-action request letter, Exxon appeared to attempt to distinguish between a “proxy” and a “standing voting instruction,” pursuant to which, as Exxon describes, a shareholder voluntarily authorizes the voting of its shares through a contractual arrangement with Exxon under Exxon’s Retail Voting Program. In doing so, Exxon argued that the standing voting instruction given by a shareholder by opting into its Retail Voting Program complies with Rules 14a-4(d)(2) and 14a-4(d)(3) (and the proxy rules generally).

Beyond As You Sow and ICCR’s challenge, on October 14, 2025, the City of Hollywood Police Officers’ Retirement System filed a proposed class action in U.S. District Court on behalf of Exxon shareholders, alleging that the adoption of Exxon’s Retail Voting Program constitutes a breach of fiduciary duties. How this lawsuit together with As You Sow and ICCR’s request for rescission evolve could further shape the future of Exxon’s Retail Voting Program and similar initiatives.