(The Center Square) - ExxonMobil shareholders on Wednesday approved the board of directors’ plan to redomicile the company's legal headquarters to Texas.
Shareholders also rejected a proposal made by two proxy advisory firms urging them to vote against the plan and add more automatic voting options to the company’s retail investor voting program.
In March, ExxonMobil Corp., based in Spring, Texas, announced its board unanimously recommended its shareholders approve changing its legal domicile from New Jersey to Texas, where its leadership and core operations have been based since 1989. The board hadn’t held a meeting in New Jersey for more than 40 years, and 30% of ExxonMobil’s global employees are located in Texas. Seventy-five percent of its U.S. employees live and work in Texas.
ExxonMobil said the reason for changing the legal domicile was Texas’ legal and regulatory environment, including its modernized business statutes and new Texas Business Court, The Center Square reported.
Not soon after, the New York City comptroller; Glass, Lewis & Co., and Institutional Shareholder Services recommended ExxonMobil and Chevron investors vote against their boards’ position on the shareholder proposals, including ExxonMobil’s plan to redomicile.
Chevron already relocated its headquarters from California to Houston. Both companies held their annual shareholder meetings on Wednesday.
ExxonMobil shareholders ignored the New York City and proxy advisers’ request and overwhelmingly voted in support of the board’s plan, approving redomiciling in Texas.
This is after Texas Attorney General Ken Paxton launched an investigation into ISS and Glass, Lewis & Co. last September, alleging they were engaged in deceptive trade practices and sued ISS roughly one week ago, alleging it was misleading investors.
In response to the ExxonMobil vote, Texans for Lawsuit Reform CEO Ryan Patrickk said in an emailed statement, “ExxonMobil’s shareholder vote is the kind of validation that no corporate-welfare incentive package or marketing campaign can replicate.
“This is one of the largest companies in the world, choosing, with its corporate charter, the jurisdiction it trusts to adjudicate its most consequential disputes,” Patrick said. “Texas has earned that confidence through three decades of commitment to legal and regulatory reform. The imperative now is to make sure we continue to deserve it.”
James Lee, CEO of Texas Stock Exchange, also said, “Exxon’s move is also a watershed moment for America’s capital markets, and the direct result of Gov. [Greg] Abbott and the Legislature transforming Texas into the top jurisdiction for business in the U.S. Hundreds of companies representing trillions of dollars in market capitalization are poised to make similar moves. With today’s action, it is clear the faucet is about to unload.”
A coalition of leading Texas business trade associations also took issue with the proxy advisory firms, arguing the out-of-state entities were “prioritizing political agendas over shareholder value.”
“Texas has recently enacted landmark corporate governance reforms designed to provide businesses with the clarity and legal certainty they require in a modern economy,” the coalition, which represents thousands of employers in Texas, said. “Central to this evolution is the establishment of the new Texas Business Courts, which provide a specialized judiciary with the expertise to handle complex commercial disputes efficiently. Unlike the unpredictable legal landscapes found in other jurisdictions, the Texas system is built on a foundation of judicial restraint and legal excellence, ensuring that corporate leadership can focus on growth rather than meritless litigation.”
The coalition includes the Texas Association of Business, Texans for Lawsuit Reform, Texas Oil & Gas Association, Texas Civil Justice League, Texas Chemistry Council and Texas Association of Manufacturers.
“Despite these clear advantages, certain proxy advisors continue to recommend against Texas moves, revealing a profound conflict of interest rooted in their ties to politically motivated organizations such as CalPERS and various labor unions,” the coalition added referring to the California pension system. “These advisers are weaponizing their influence to advance ideological goals that often run contrary to the financial health of the companies they evaluate.
“Their opposition to Texas is not based on economic data or legal reality, but rather on a desire to maintain leverage over corporate boards via jurisdictions that favor activist agendas over shareholder returns,” the coalition said.
They also argue a conflict of interest already exists because proxy advisers are already legally challenging Paxton’s office from enforcing a 2025 law that imposes extensive public and directed-disclosure obligations on proxy advisory firms.
New York officials have also long targeted ExxonMobil. In 2018, the state sued, alleging the company was committing fraud about “how climate change poses a risk to the company, the New York City Pension Funds, and the planet” because it refused to “give investors meaningful information about climate change risks and the company’s future.”
By contrast, in 2021, the Texas Legislature banned companies from implementing so-called ESG (environmental, social, governance) policies. In 2022, the Texas comptroller directed state agencies to divest from companies that were promoting ESG, including nearly 350 individual investment funds and 10 financial companies. Not soon after, companies began altering their policies to comply with Texas law.
In 2023, Texas and other states also sued the Biden administration, arguing its ESG policies were unlawful.
“The decision to redomicile in Texas is a decision to embrace a future of economic freedom, judicial predictability, and robust capital markets,” the coalition said. “Texas business leaders remain committed to defending the state’s right to compete and will continue to welcome any company seeking to escape the stagnation of politically charged business climates for the unparalleled opportunities found only in Texas.”
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