ExxonMobil shareholders voted Wednesday to move the company’s legal domicile from New Jersey to Texas, ending a corporate connection to the Garden State that dates back more than a century.
The proposal passed with 71.3% support during the company’s annual shareholder meeting, according to preliminary results. ExxonMobil’s board of directors had unanimously recommended the move earlier this year, arguing that Texas offers a more business-friendly legal and regulatory environment.
“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,” ExxonMobil CEO Darren Woods said when the proposal was announced in March.
Although ExxonMobil has been incorporated in New Jersey since 1882, when it operated as Standard Oil of New Jersey, the company has maintained its headquarters in Texas since 1989. The company is currently based in Spring, near Houston, and says about 75% of its U.S. employees work in Texas.
Company leaders said the move reflects where ExxonMobil’s primary operations and workforce are located. Exxon also argued in its proxy filing that Texas lawmakers, judges and juries are more familiar with the company’s business and operations.
The decision comes as Texas has worked to attract more corporations through legal and regulatory changes aimed at businesses. In 2023, the state created the Texas Business Court to handle complex business disputes. A separate law approved last year expanded legal protections for companies, including allowing businesses to establish stock ownership thresholds for certain shareholder lawsuits.
Several major corporations, including Tesla, SpaceX, and Coinbase, have also shifted their legal incorporation to Texas in recent years.
Two influential proxy advisory firms, Glass Lewis and Institutional Shareholder Services, recommended that shareholders vote against ExxonMobil’s proposal. The firms argued the move could weaken shareholder rights and make it more difficult for investors to sue the company.
ExxonMobil countered that it did not intend to raise ownership thresholds for shareholder lawsuits despite the legal changes available under Texas law.
The relocation proposal also drew attention from Texas Attorney General Ken Paxton, who sued Institutional Shareholder Services after the firm recommended voting against ExxonMobil’s plan. Paxton accused the advisory company of misleading investors.
James Lee, chief executive officer of the Dallas-based Texas Stock Exchange, praised the shareholder vote in a statement.
“Exxon’s move is also a watershed moment for America’s capital markets, and the direct result of Governor Abbott and the legislature transforming Texas into the top jurisdiction for business in the U.S,” Lee said, per HPM. “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.”
ExxonMobil said the relocation will not change its day-to-day operations or employee locations. The move is expected to take effect later this year after final procedural steps are completed.
Shareholders on Wednesday also rejected a separate proposal to expand automatic voting options for retail investors. The measure received 23.5% support.
