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This week, ExxonMobil\u2019s shareholders voted overwhelmingly to redomicile the company to Texas, bucking the opposition of the\u00a0foreign-owned\u00a0proxy advisor\u00a0duopoly\u00a0of ISS and Glass Lewis. It is a watershed moment for our capital markets in the United States, with\u00a0a growing number of\u00a0public companies representing trillions of dollars in market capitalization now poised to follow Exxon\u2019s lead to Texas. The more important story is what made the vote possible, and the opportunity we see at the Texas Stock Exchange to take it mainstream.<\/p>\n
The proxy advisor\u00a0firms\u00a0routinely\u00a0leverage their\u00a097% market share to push undisclosed agendas that can undermine shareholder value, including recommending against Texas redomiciles despite the clear legal and financial benefits. The retail participation gap has been a key part of their strategy. Exxon is roughly 40% retail owned. Using Broadridge\u2019s 2025\u00a0ProxyPulse data showing a retail voting participation rate of\u00a028.0%, approximately 72% of that retail base \u2014 or nearly 29% of all outstanding shares \u2014 may remain unvoted in a typical year. Exxon broke the pattern by securing no-action relief from the SEC\u00a0in fall 2025\u00a0for an innovative standing voting instruction program, letting retail shareholders pre-commit their votes to align with the board and management. The shareholders showed up and the proxy advisor\u00a0firms\u00a0lost.<\/p>\n
Most Americans hold shares in \u201cstreet name\u201d through firms such as Schwab, Fidelity or Robinhood. When investors give voting instructions, their shares are voted accordingly. When they do not, legacy exchange rules increasingly leave those shares unvoted on substantive matters, as fewer proposals are now treated as routine. Broker non-votes and absent shares can create quorum risk, raise approval thresholds and function as practical opposition. Proposals fail not because shareholders opposed them, but because too many never responded. That is governance by friction.<\/p>\n
Retail shareholders invest their own money and expect a system that honors that commitment. Instead,\u00a0existing exchange rules and proxy advisory firms dampen\u00a0their voice, their governance rights, and ultimately their financial interests.<\/p>\n
Exxon\u2019s win was real, but it was a single-issuer fix to a market-wide problem. Not every public company has the will\u00a0or resources\u00a0to do what Exxon did, and companies breaking the\u00a0proxy firms\u2019\u00a0grip one at a time, however laudable, will only get the market so far. Exchanges can address the same problem at the level of market structure, which is where it actually sits.<\/p>\n
At the Texas Stock Exchange, we are proposing what would be the first exchange-level reform of its kind to begin doing just that, subject to SEC review. The approach is straightforward: brokers should vote uninstructed retail shares in proportion to the instructions they receive from shareholders who do participate. If 60% of voting shareholders support a proposal and 40% oppose it, uninstructed shares would follow the same distribution. This is not broker discretion. It is math. It does not take away anyone\u2019s vote, and it does not entrench management. It restores a basic principle: participation confers influence; silence should not distort the outcome.<\/p>\n
Under Chairman Paul Atkins, the SEC\u2019s no-action relief for Exxon\u2019s retail voting program established that standing voting instructions are no longer theoretical. The growing scrutiny of the proxy advisor\u00a0firms\u00a0reflects a broader recognition that too much voting authority has migrated away from investors themselves.<\/p>\n
The same dysfunction repeats at the institutional level. Investment advisers have a fiduciary duty to vote proxies in the best interest of their clients, but in practice many rely on the\u00a0proxy advisory firms \u2014 ISS, majority-owned by Deutsche B\u00f6rse, and Glass Lewis, owned by Ontario Teachers\u2019 Pension Plan \u2014\u00a0whose recommendations have become the de facto outcome for a substantial portion of institutional votes \u2014 leaving teachers, firefighters, retirees and families with little practical say over the voting policies applied in their name. The institutional layer will require its own reckoning, but exchanges can move now on what falls within their authority.<\/p>\n
The stakes extend beyond proxy mechanics. Governance friction is one reason being public has become more unpredictable, expensive and legally treacherous, helping push the number of U.S. public companies down sharply \u2014 from roughly 8,000 in the late 1990s to approximately 4,300 today \u2014\u00a0over the past generation while private markets have expanded.<\/p>\n
The answer is not to abandon public markets; it is to make them work again. At the Texas Stock Exchange, our central organizing principle is setting the conditions\u00a0under which companies want to\u00a0be\u00a0public. Taking the unprecedented step of\u00a0constraining proxy advisor influence through exchange-level rules\u00a0is a key part of that mission.<\/p>\n
Exchanges should not merely process the dysfunction of the existing system \u2014 they should help fix it on behalf of their listed companies. That is issuer alignment in practice. Meanwhile,\u00a0neither NYSE nor Nasdaq has advanced comparable structural proposals on proxy reform.<\/p>\n
Exxon\u2019s shareholders showed what is possible when retail\u2019s voice is restored and the proxy\u00a0firms are\u00a0held in check. Exchanges can provide that relief at scale, making where companies choose to list all the more consequential. On this and other areas of issuer alignment, the Texas Stock Exchange is leading the way.<\/p>\n
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of\u00a0<\/em>Fortune.<\/em><\/p>\n<\/div>\n #Texas #Stock #Exchange #CEO #exchanges #build #Exxons #retail #model #rein #proxy #advisors<\/p>\n","protected":false},"excerpt":{"rendered":" This week, ExxonMobil\u2019s shareholders voted overwhelmingly to redomicile the company to Texas, bucking the opposition of the\u00a0foreign-owned\u00a0proxy advisor\u00a0duopoly\u00a0of ISS and Glass Lewis. It is a watershed moment for our capital… <\/p>\n","protected":false},"author":1,"featured_media":4529,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[4656,82,369,6909,6910,6911,1448,6913,6912,1076,91,6908,2013],"class_list":["post-4528","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-news","tag-advisors","tag-build","tag-ceo","tag-exchange","tag-exchanges","tag-exxons","tag-model","tag-proxy","tag-rein","tag-retail","tag-stock","tag-stock-exchanges","tag-texas"],"_links":{"self":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4528"}],"version-history":[{"count":0,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/posts\/4528\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=\/wp\/v2\/media\/4529"}],"wp:attachment":[{"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4528"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4528"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.fintechpulse8.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}