Rules 14a-4(d)(2) and (3) under the Securities Exchange Act of 1934, as amended (the Exchange Act) prohibit the issuance of proxies by shareholders that confer authority to vote at any annual meeting other than the next annual meeting or to vote with respect to more than one shareholder meeting, respectively. As a result of these Rules, among others, shareholders receive voluminous proxy materials for each annual meeting and other shareholder meetings, many of which are discarded and shares remain unvoted, particularly among retail shareholders. To address this problem, Exxon Mobil Corporation requested, and was granted on September 15, 2025, no-action relief from enforcement of Rules 14a-4(d)(2) and (3) under the Exchange Act by the Division of Corporation Finance of the Securities and Exchange Commission (SEC) with respect to a novel retail shareholder voting program. See incoming request letter here.

The purpose of the retail shareholder voting program described in the no-action request letter is to:

1. promote voting by retail investors,
2. provide retail shareholders a choice to select the recommended policy of the Board of Directors, and
3. remove time and other burdens borne by retail shareholders in the proxy voting process.

Pursuant to the no-action letter, the retail shareholder voting program follows a specific design:

Applicability of the Program

The retail shareholder voting program applies to annual and special meetings of shareholders, but does not apply to actions taken by shareholder written consent.

Eligibility to Enroll

The retail shareholder voting program is available at no cost to all retail investors, which do not include investment advisers registered under the Investment Advisers Act of 1940 that are exercising voting authority with respect to client securities.

Shareholder Communications and Instructions

Generally, communications with respect to the retail shareholder voting program will be made directly to registered owners, and indirectly to non-objecting beneficial owners and objecting beneficial owners via their banks and brokers and those entities’ agents. Upon the initiation of any retail shareholder voting program, any materials must be filed with the Commission under cover of Schedule 4A pursuant to Rule 14a-12.

• Opt-In Process

Retail shareholders may opt into the retail shareholder program by electing to make a standing voting instruction related to (i) all matters or (ii) all matters other than contested director elections or any acquisition, merger or divestiture transaction that, under applicable state law or stock exchange rules, requires approval of the company’s shareholders.

• Opt-Out Process

Participating shareholders may opt out of the retail shareholder voting program to cancel their standing voting instructions at any time and at no cost. Votes for which the company has received a standing voting instruction will be cast on the same day that the company files a definitive proxy statement for an upcoming meeting, so cancellation of the standing voting instruction will only apply to future meetings for which a definitive proxy statement has not yet been filed.  See “Vote Overrides” below for changes to standing voting instructions for a shareholder meeting for which a definitive proxy statement has been filed.

• Annual Reminders

Participating shareholders must receive annual reminders of their enrollment in the retail shareholder voting program and their standing voting instruction. Such annual reminders must include explicit language informing the participating shareholder of their ability to opt out and thereby cancel their standing voting instruction with respect to future meetings.

• Supplemental Reminders

Participating shareholders who selected to have their shares voted on “all matters” will receive an additional reminder prior to any shareholder meeting at which the election of directors is contested or approval is sought under with respect to any acquisition, merger or divestiture.

• Vote Overrides

Participating shareholders may override the votes cast by the company through the standing voting instruction by voting using the proxy materials they received for that meeting. Every reminder communication described above must inform participating shareholders that, at any time, even after the company has filed a definitive proxy statement, the participating shareholder may override the standing voting instruction and cast their own votes with respect to any proposal at an upcoming meeting using the proxy materials they receive (identical to any other shareholders voting at that meeting).

• Proxy Statement and Website Disclosure

The retail shareholder voting program must be disclosed in the company’s proxy statement for each upcoming shareholder meeting, as well as the company’s investor relations website, including the ability of participating shareholders to opt out of such program for future meetings or to override their standing voting instructions with respect to the specified proposals at an upcoming meeting at any time prior to the vote at that meeting. Participating shareholders must continue to receive all proxy materials, notwithstanding the participating shareholders’ selection to opt into the program.

Impact of the State of Incorporation

In addition to consideration of requirements under the Exchange Act and the rules adopted by the Commission, the no-action letter considers compliance with the laws of New Jersey and Delaware. Such states permit a standing voting instruction that does not expire so long as the instruction provides for an extended duration. Companies should review the requirements of their state of incorporation with respect to the validity of proxies. Many states, including Pennsylvania, permit shareholders to expressly provide for extended periods for proxies.

Potential Implications

Although we believe it is very early days as it relates to the SEC’s potential moves to increase democratization in proxy voting matters to give greater voice to retail shareholders and there is very likely more developments to come, the SEC’s staff’s no-action position in Exxon Mobil’s retail voting program letter should not be seen merely as procedural relief—but rather it very well may be a defining inflection point in proxy matters and proxy contests. We believe that such programs should empower issuers to mobilize and tap into retail shareholders, who as a historical matter have statistically supported management more often than not.¹ These programs are likely of significant importance to all issuers, but they very well may prove to be extremely important to those public companies with large retail bases and/or that find themselves in proxy contests. Given the logistics and the nuances of these programs – including the real state law considerations – issuers are well advised to immediately start exploring and developing such programs as they will take time to construct.

¹ According to Broadridge’s ProxyPulse report (2024 proxy season review), retail investors voted 29.8% of their shares in 2024, the highest in nine years, and were more supportive of board recommendations than institutional investors.