U.S. energy giant Exxon Mobil Corp. is pioneering a new automatic proxy voting program for retail investors that will enable it to more easily recruit individual investors to vote in step with the company on shareholder issues.
In a letter to the company, the U.S. Securities and Exchange Commission (SEC) gave Exxon Mobil the green light to introduce its proposed retail voting program, which will allow the company to enroll retail investors in an automated proxy voting service that aligns them with the company’s recommended positions.
In a statement, the company said the program levels the playing field with activist and institutional investors that have access to proxy voting services to facilitate shareholder voting.
“Our retail shareholders, who overwhelmingly support our board, have not had the benefit of [an automated proxy voting] service and, as a result, have for far too long been underrepresented at shareholder meetings,” it said — noting that about 40% of its shares are held by retail investors and that about 75% of those shareholders typically don’t vote during proxy season.
“Activist groups holding few if any shares have, over the past decade, filed numerous dissident proposals that openly sought to shrink our company’s core business to the detriment of long-term value,” it said.
According to the regulator’s letter, the program will be available free to all retail investors, but not to registered investment advisers that exercise voting authority on behalf of their clients.
Retail investors that participate in the program will be given an annual opportunity to opt out, and they will also be able to override their standing instructions to vote alongside the company on a particular shareholder proposal.
Exxon Mobil called the new service “an important step forward for American shareholder democracy.”