Exxon Reportedly Rolls Out Auto-Voting System To Boost Retail Investor Participation, Curb Activist Influence

Exxon Mobil Corp (XOM) is reportedly launching a new initiative aimed at boosting retail investor participation in proxy voting by using an automated system that would help the oil producer reduce the sway of activist shareholders.

According to a Bloomberg report, the Securities and Exchange Commission (SEC) approved the plan by issuing a no-enforcement letter allowing the company to proceed. The report said, citing Davis Polk, the law firm behind the system developed for Exxon, that the program “aims to boost proxy voting by retail investors by enabling them to give a standing instruction to cast votes as recommended by the company’s board.”

Retail sentiment on Exxon remained unchanged in the ‘extremely bearish’ territory, with message volumes at ‘low’ levels, according to data from Stocktwits.

Bloomberg added that Exxon has been the target of numerous activist investor campaigns, many of which aim to steer the company away from its fossil fuel-centric strategy. Exxon executives have noted that these activists have had a significant influence due to two key factors: the increase in ESG proposals permitted on the ballot by the SEC during the Biden administration, and the low voter turnout among retail shareholders. The newly introduced “auto-voting system” was to tackle the latter issue.

Exxon told Bloomberg that activists, including ‘As You Sow,’ run a service that “recruits shareholders and automatically votes their shares in alignment with its agenda.” The company noted that its retail shareholders, who support its board, on the other hand, have not been able to get such a benefit of service and “as a result, have for far too long been underrepresented at shareholder meetings.”

The report noted, citing Exxon, that about 40% of the company’s shares were held by retail investors, and about three-quarters of them don’t participate in the proxy voting process. “We will introduce a completely voluntary voting option for our retail investors,” Exxon told Bloomberg. “Our opt-in program will make it easy for them to speak up, be heard, and be counted.”

Exxon shares have gained over 4% this year and fallen marginally in the last 12 months.

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