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ExxonMobil is seeking to redomicile its incorporation from New Jersey to Texas, becoming the latest major company to seek a lighter-touch regulatory regime as it battles investor rights litigation.
The US oil company will ask shareholders on Tuesday to approve the move at a meeting later this year, saying it expected to benefit from more “reasonable, productive decisions” from state officials and citizens in Texas. A successful vote would sever the company’s near 150-year association with New Jersey, which dates back to its incorporation by Standard Oil executives in 1882.
“The Board believes Texas legislators, judges and juries . . . are generally more familiar with our business and operations. Our business is complex and that kind of familiarity means we are more likely to get reasonable, productive decisions from Texas officials and citizens,” the company said in documents filed to the Securities and Exchange Commission.
Exxon, which is already headquartered near Houston, is the latest major company to move its incorporation to Texas from states such as Delaware, New Jersey and California.
In the US, the so-called internal affairs doctrine dictates that disputes over corporate governance matters and fiduciary duty are decided under the laws of the state where the company is incorporated.
Elon Musk legally moved both Tesla and SpaceX’s incorporations from Delaware to Texas in 2024. More recently, Coinbase, the large crypto exchange, reincorporated in Texas, shifting from Delaware.
The Lone Star State has been in a heated rivalry with Nevada to attract new incorporations, even as big companies such as Chevron and Goldman Sachs have separately moved large physical operations to Texas.
The influx has helped to drive a boom that has turned the state into the eighth largest economy in the world — ahead of Canada, Italy and Russia.
Texas has just created a “business court” to exclusively hear commercial disputes. It has also made changes to its state corporate law to make shareholder lawsuits more difficult.
“Texas advertises itself as a place where corporate managers will have way more flexibility, freedom and autonomy to act . . . It isn’t that interested in balance and fairness for investors,” said Lawrence Cunningham, director of the John L Weinberg Center for Corporate Governance at the University of Delaware.
Exxon’s request to move its corporate registration from New Jersey comes as the company fights a federal class action lawsuit filed by investors. The case, filed by the City of Hollywood Police Officers’ Retirement System, alleges the company’s automated proxy voting system infringes on voting rights, stifles dissent and entrenches management.
Last month at a law school conference held at the Federal Reserve Bank of Dallas, the founder of the new Texas Stock Exchange, James Lee, praised the oil company for its efforts in fighting back against what he believed were frivolous shareholder actions.
“Exxon and you are making a difference. Exxon continues to lead for improving conditions for public companies,” Lee told his interviewer, David Kern, a top internal lawyer at Exxon.
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