ExxonMobil investors have approved the company’s move of its legal domicile to Texas. The oil company’s proposal originally faced opposition from one of the largest shareholder advisory firms.
Texas sued Institutional Shareholder Services (ISS) following its expressed disapproval of ExxonMobil’s plans to relocate.
Texas Attorney General Ken Paxton argued in the lawsuit filed last week that ISS used its influence over corporate shareholders “to advance ESG and diversity-focused political agendas rather than objective financial guidance.”
Paxton specifically pointed out ISS’s opposition to ExxonMobil’s plan for redomiciling in Texas as evidence for his accusations.
While 75 percent of Exxon’s U.S. workforce is centered in Texas, and the company has been headquartered in the state since 1989, it was incorporated in New Jersey in 1882.
According to the Financial Times, critics cited concerns that the move would weaken shareholder rights. But ExxonMobil argues the opposite, saying that Texas’ policy and regulatory environment would allow for the company “to maximize shareholder value.”
“Over the past several years, Texas has made a noticeable effort to embrace the business community,” wrote Darren Woods, ExxonMobil chairman and chief executive officer, in a statement earlier this year. “Aligning our legal home with our operating home, in a state that understands our business and has a stake in the company’s success, is important.”
When making its decision, the board considered Texas’ policy and regulatory environment, specifically its more modern business statutes and business court. This system is designed to resolve complex business disputes efficiently and supports sound decision-making by applying clear and statute-based standards.
During Exxon’s annual meeting on Wednesday, 71 percent of investors approved of the proposal to redomicile in Texas.
