For retail investors, the Proxy season offers the opportunity to let the C-suite know how they think about the direction of a company. Mom and Pop will probably not get a private audience at the CEO or the Board of Directors, but they can weigh on shareholders proposals every year.
And what will be of that one lever of power for the little man in the American business community? Many never take the trouble to cast a single vote. Oil giant Exxon Mobil Hopes this non -vulgar shareholders to hire a group of stock owners who regularly exercise their voting rights during the Proxy season: activist investors.
The Securities and Exchange Commission this month signal on A request from Exxon To ask individual investors to automatically cast their votes in accordance with the position of the company on shareholders proposals. According to Exxon, this group of investors has around 40% of the total shares of shares, but only a quarter of them vote on shareholders proposals during the proxy season. Even protecting part of those non -Gegotten voices from currently inactive shareholders would give Exxon a remarkable advantage against activist investors looking for influence on one of the 20 largest companies in the world.
The subject of activist campaigns is probably a delicate headquarters of Exxon. In 2021, the small activist hedge fund motor no. 1 surprised the business world by laying three seats on the board of directors of the company established in Texas. Large institutional shareholders such as investment company BlackRock Backed Engine No. 1’s proposal, to the annoyance of the C-suite of Exxon.
Exxon has taken steps to limit the influence of activist investors, because engine no. 1 is up. Last year’s Gambit by the company bypassed the SEC and its process of issuing no-action letters for shareholder proposals in full to prevent you from proposing ESG issues for a proxy vote. Instead, Exxon Investors Arjuna Capital of Massachusetts continued and followed this from Amsterdam, with the argument in his complaint that the proposals ‘an extreme agenda’ represented that was ‘calculated to reduce the existing activities of the company’.
But now Exxon has returned to working through SEC channels to get the upper hand with activist investors, and it may have started a trend. The SEC has had so -called voting instructions on its radar and lawyers of law firm for about 15 years Injury Suppose that employees of the agency have informed them that other companies can use a Retail investors program such as the only thing that will use Exxon. In one Analysis of the SEC decision To properly approve the Exxon program, Wilkie Farr & Gallagher law firm noted that potential imitators should revise the state laws before they continue with their own program.
With that in mind, the newest step from Exxon can ultimately significantly strengthen control of management. Stocked by the incident with Engine Nr. Do not be surprised if his business colleagues follow quickly.
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