ExxonMobil’s newly announced “Retail Voting Program” is marketed as an empowerment tool for individual investors. In practice, it’s the opposite.
By soliciting standing proxies that lock retail shareholders into management’s recommendations on every ballot item into the future, the program invites owners to abdicate their oversight power and replace judgment with blind faith in self-interested executives. That isn’t shareholder democracy – it’s a loyalty oath.
The free market rests on a core tenet of capitalism – independence: the board oversees management, and shareholders oversee the board. By opting into the Retail Voting Program, ExxonMobil shareholders are effectively pledging blind faith, agreeing in advance to whatever management recommends. When a company corrals a large block of pre-committed votes for management, guardrails may as well not exist.
Should Exxon succeed in convincing enough retail investors to join, oversight would be eliminated and short-term executive interests would become the rule – at the expense of long-term owners and all stakeholders.
Let’s not kid ourselves, this new program isn’t about “empowering” retail investors. It’s about insulating management from their owners. With automatic votes, unaccountable executives could, in practice, expand their own pay packages, redirect capital toward short-sighted vanity projects, and, perhaps most importantly, pay for it by cutting dividends that investors depend on. All while everyone else loses leverage.
Today, As You Sow filed a letter with the Securities and Exchange Commission urging it to rescind its no-action relief that allowed Exxon to implement this “Retail Voting Program.” Securities law is clear: proxies must be meeting-specific, accompanied by definitive proxy materials, and enable informed, time-relevant choices by shareholders. Exxon’s proposal does the opposite—locking in blind faith support for management.
Active stewardship
Management at Exxon seems to have forgotten its own recent history. In 2021, following seven consecutive years of valuation decline, the company was removed from the Dow Jones Industrial Average after 81 years as a “blue chip” stock. Shareholders demanded change. We elected reform directors who brought much needed accountability and strategic discipline.
The result? Exxon stock reversed declines and materially appreciated— doubling in value since that annual meeting— suggesting that active owners can and must at times override management. Had a management-aligned auto-vote apparatus existed at that time, those directors might not have been elected, and Exxon might have become the next Blockbuster. It is not an exaggeration to say that active shareholders saved the company from its own lack of capital discipline.
The lesson is clear: when shareholders vote independently to override the sometimes-short-sighted interests of executives, companies benefit.
As a recent WSJ opinion piece, “Your Vote Doesn’t Count at ExxonMobil,” said, “Exxon’s program does nothing more than establish a perpetual advantage for incumbent leadership. Rather than get out the vote, Exxon wants to lock it up”
Why push a loyalty-oath model now? Because long-horizon fiduciaries including pension funds, retail investors and 401(k) managers stewarding the retirements of tens of millions, are insisting on a durable, risk-aware strategy. Rather than meet that challenge head-on, Exxon appears to be trying to lock-in a voting base to counterbalance institutions with a fiduciary duty to invest for the long term.
In touting its auto-vote scheme, Exxon compared it to As You Vote, the independent proxy voting guidelines for retail investors that is offered by my organization through our My Money My Vote platform. Unlike Exxon’s scheme, frameworks like ours give retail investors transparency, nuance, and a consistent long-term voice that keeps management honest for long-term sustainable growth.
Exxon also noted that roughly 40% of its outstanding shares are held by retail investors. It estimated that 75% of those shares typically go unvoted. Yes, that “silent majority” is untapped influence—but only when activated with independent judgment, not to rubber stamp management. By adopting independent, transparent guidelines instead, investors can ensure their shares are cast to reduce systemic risks, promote accountability, and keep the company competitive in a shifting global market.
As You Sow’s president and chief counsel, Danielle Fugere, put it, “The program attempts to game the system, locking in their votes for management, and denying them the chance to respond to new information before each meeting. Allowing the program to proceed would set a dangerous precedent that undermines the integrity of our markets.”
Retail investors beware. Signing up for the Retail Voting Program at Exxon would in effect pre-approve every vote for management, reduce your ability to correct course, shift leverage on compensation, and weaken market discipline that aligns managers with owners. Instead, shareholders should push for informed participation and cast votes consistently and thoughtfully with an independent set of guidelines that reflects long-term, risk-aware stewardship.
The stakes are high and the choice is stark. One path consolidates power in the hands of management and weakens independent oversight. The other activates shareholder power to remind companies like Exxon that long-term value comes only when boards are held accountable and policies are shaped for the benefit of all stakeholders.
Shareholders have saved Exxon management from itself before. We may have to do so again – and soon.
Andrew Behar is the CEO of As You Sow.
Guest posts on ImpactAlpha represent the opinions of their authors, and do not necessarily reflect the views of ImpactAlpha
