Exxon Mobil shareholders on Wednesday approved the company’s plan to redomicile in Texas, marking a win for the top U.S. oil producer after two leading proxy advisory firms advised investors to strike down the proposal.
The oil producer is incorporated in New Jersey, but the company has been headquartered in Texas since 1989. It said moving its legal home to the state was logical and made more sense for the business.
Other companies, including SpaceX, Tesla and Coinbase, have recently shifted operations to the Lone Star State. A Texas law passed last year enhanced legal protections for businesses in several ways, including reducing the threat of shareholder litigation by allowing companies to set stock ownership thresholds for lawsuits.
Proxy advisory firms Glass Lewis and Institutional Shareholder Services had recommended that Exxon investors oppose the redomiciling, saying the move could erode shareholder rights.
When it announced in March its plan to switch the state of incorporation from New Jersey to Texas, Exxon said it did not plan to raise its ownership thresholds for shareholder lawsuits and argued that Texas officials have a better understanding of its business.
“The Board believes Texas legislators, judges, and juries who might make decisions that impact Exxon Mobil are generally more familiar with our business and operations,” the company said in its proxy filing.
The Texas proposal passed with 71.3% of votes in support, according to preliminary results from the annual meeting.
Investors also rejected a shareholder proposal to add more automatic voting options to the company’s retail investor voting program, handing Exxon another win.
The oil producer introduced a unique voting mechanism last year to allow retail investors to automatically cast their votes in lockstep with the board’s recommendations at annual meetings.
The shareholder proposal requested the program be modified to add more options, including a way to automatically vote against Exxon management’s stances. It received 23.5% of votes in support.
(Reporting by Sheila Dang in Houston and Arunima Kumar in Bengaluru; Editing by Joyjeet Das, Nathan Crooks, Rod Nickel and Nia Williams)