Pushing Passivity: Shareholders Scald Exxon Retail Investor-focused Programme

2 October 2025

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By Jack Grogan-Fenn

As You Sow and the Interfaith Center for Corporate Responsibility (ICCR) have filed a request with the US Securities and Exchange Commission (SEC) to rescind its recent “effective approval” of oil and gas giant ExxonMobil’s “Retail Voting Program”.

Exxon received approval from the SEC last month to introduce a new retail investor-focused voting mechanism that will allow retail investors to automatically cast ballots in line with board recommendations during annual meetings, as reported by Minerva Analytics.

As You Sow and ICCR argue that “under the guise of ‘assisting’ retail voters” Exxon are looking to encourage retail shareholders to opt into a programme that “would cast their votes in favour of management for all future meetings, unless and until shareholders take steps to opt-out”.  

“This program is a direct attack on shareholder rights,” warned Andrew Behar, CEO of As You Sow. “Currently retail voters hold roughly 40% of Exxon shares and nearly 75% of those shareholders currently do not vote. A standing proxy in favour of management therefore significantly increases the odds of a perpetual management advantage. This goal is underscored by the fact that Exxon fails to make available an equivalent standing vote against management.” 

Danielle Fugere, President and Chief Counsel of As You Sow, added that “allowing this program to proceed would set a dangerous precedent that undermines the integrity of our markets”.

It is important to note that it appears investors would actively have to opt into Exxon’s “Retail Voting Program” rather than being auto-enrolled and will have the ability and choice to opt out and cancel the standing voting instruction at no cost. The SEC has additionally stated that retail shareholders that have opted in to the Retail Voting Program will receive an annual reminder of their opt-in status and selection and a reminder that they can opt out and cancel their standing voting instruction.

Concerns were raised that the programme could be Exxon looking to capitalise on “laziness” from some non-activist and less engaged investors, and could provide an example of a system for other companies to adopt. While a definitive link is not clear at this stage, some have also suggested that the move could be an attempt to counter shareholder activism.

Exxon has been subject to several campaigns from activist shareholders, with three dissident directors being elected to its board the highest profile example. Exxon has also previously faced allegations of lobbying against climate change legislation and the oil and gas giant could well take a public anti-ESG stance given the current regulatory and political picture.

The joint statement from As You Sow and ICCR pointed to SEC Rule 14a-4, stressing it states that authority to vote on behalf of a shareholder cannot be given for more than a single annual meeting, with voting materials furnished in advance of giving such authority. SEC’s 14a-4 proxy voting rules were implemented to ensure that shareholders who have invested their capital have an effective voice in company management. Exxon’s plan does the opposite. 

“Rules like 14a-4 are crucial for ensuring that the powerful corporate players in our economy remain accountable to their stakeholders and positioned for long-term success,” said Josh Zinner, CEO of ICCR. “Under Exxon’s proposed program, retail investors would relinquish their rights to evaluate company performance annually and cast their votes accordingly, thereby potentially granting management carte blanche on critical governance issues such as contested board contests, CEO pay votes, and other matters. The Exxon scheme assumes that investors prefer to be passive when what is clearly needed to ensure successful companies are more engaged, active investors.”

Exxon is incorporated in Texas, which has engaged in several attempts to strip back shareholder rights, as well as pressure proxy advisors and asset managers. Last month, Texas Attorney General Ken Paxton launched new investigation into two major proxy advisors, with him accusing them of “potentially misleading institutional investors and public companies”. This forms part of a wider attempt in both Texas – particularly in the form of Senate Bill (SB) 2337, as reported by Minerva Analytics – and by Republican state officials to restrict proxy advisors and shareholder.

Minerva Analytics responded by filing a Texas Public Information Act (TPIA) request (Freedom of Information request) with the Texas Attorney General following the series of escalating legal moves surrounding SB 2337. The law was due to come into effect on 1 September, but a preliminary injunction was granted by a Trump-appointed Republican judge in the state following lawsuits from two major proxy advisors. A trial is now set for 2 February 2026.

Minerva’s TPIA request seeks disclosure of communications between the Attorney General’s office, the Texas Stock Exchange, and related parties concerning proxy advisory services and SB 2337. The objective is to clarify whether coordination has occurred and to safeguard investors’ right to independent analysis free from political interference.

“This is not just a dispute about two firms. SB 2337 strikes at all independent research providers and at the investor choice that underpins fiduciary duty, said Sarah Wilson, CEO of Minerva Analytics. “Placing political conditions on how research is produced or accessed is an attack on the freedom of expression in financial analysis and risks fragmenting oversight of US markets.”

“Minerva is doing this to defend investor choice and the freedom of expression essential to independent investment research,” she added. “SB 2337 is drafted broadly and would apply to every proxy advisor, including Minerva.”

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Last Updated: 2 October 2025