What You Need to Know
On September 15, 2025, the SEC’s Division of Corporation Finance issued a no-action letter to Exxon Mobil allowing a “Retail Voting Program” that lets retail shareholders give standing voting instructions (SVI) for future annual meetings. The program is available to both shareholders of record and beneficial owners (through banks and brokerage firms) and will be available at no cost to retail holders. While neither the incoming no-action request nor the SEC’s response define the term “retail shareholders,” it appears to mean investors buying and selling for their own accounts rather than institutional investors that invest large sums of money on behalf of others. Registered investment advisers with voting authority over client shares cannot opt in.
Shareholders who opt in can choose to have their shares voted as the board recommends on all matters, or, alternatively, on all matters except contested director elections and major transactions (e.g., mergers/divestitures) requiring shareholder approval. Votes under SVI are cast when the company files its definitive proxy.
Key safeguards around the program are that shareholders can override their SVI at any time by voting through the regular proxy process and will continue to receive proxy materials and reminders about their opt-in status and ability to opt out.
Why It’s Important
The concept of standing voting instructions has been around for 15 years or more, but has not been implemented due to concerns that shareholders – particularly retail shareholders – cannot vote on an informed basis unless they review the proxy materials for each meeting at which their votes are to be cast. The enlightened approach followed by the SEC in this instance is therefore pleasantly surprising, and suggests that additional voting reforms may be more acceptable to the SEC.
While the no-action relief was granted to Exxon Mobil, other companies may be able to implement similar programs, with appropriate disclosures and controls. Programs similar to the Exxon Mobil program would expand retail participation and help ensure that votes are cast, which may help companies achieve quorum more easily, balance the influence of proxy advisor-driven institutional votes, and mitigate the loss of broker discretionary voting on many items.
The Staff’s position indicates flexibility under the proxy rules limiting the duration of proxies to a single annual meeting where shareholders are given the ability to override the SVI. The approach is viewed as consistent with Delaware law allowing longer proxy durations if the proxy specifies a period, though companies should review and confirm state law and charter/bylaw considerations.
What You Need to Do
1. Assess Fit
- Analyze your shareholder base (size/stability of retail ownership; percentage of unvoted shares; quorum history).
- Consider whether SVI could improve participation and outcomes for your meetings.
2. Define Program Parameters
- Choose SVI options (all items vs. all except contested elections/major transactions).
- Determine timing (opt-in window; vote submission upon definitive proxy filing).
- Confirm registered investment advisers with voting authority are excluded.
3. Build the Infrastructure
- Coordinate with your transfer agent, proxy solicitor, and intermediaries (brokers/banks) to support SVI for both registered and beneficial holders.
- Implement clear opt-in/opt-out and override processes across all voting platforms.
- Plan reminder notices and confirmations.
4. Prepare Disclosures and Governance
- Draft plain-English proxy disclosures explaining the program, override mechanics, and opt-out instructions.
- Review state corporate law, exchange rules, and internal policies
- Obtain board approvals as needed.
- Address data privacy, cybersecurity, and recordkeeping considerations.
5. Pilot and Train
- Test systems before the next proxy season.
- Train investor relations, legal, and call center teams to handle questions and overrides.
6. Monitor and Adjust
- Track SEC developments and any additional Staff guidance or market practices.
- Evaluate participation rates and meeting outcomes; refine the program as needed.
Contact Christopher Seifter or Bob Lamm of Gunster's Securities Law & Corporate Governance practice to discuss how to implement a Retail Voting Program before the upcoming proxy season.
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This publication is for general information only. It is not legal advice, and legal counsel should be contacted before any action is taken that might be influenced by this publication.
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