(The Center Square) — Legal reform groups are criticizing New York City’s top bean counter for asking federal regulators to block a move by ExxonMobil to relocate its New Jersey headquarters to Texas.
In a filing with the Securities and Exchange Commission, Comptroller Mark Levine urges Exxon’s shareholders to reject the company’s proposal to move its corporate offices to the Lone Star State, which he claimed is a jurisdiction with “less robust” shareholder rights.
He cited a recent Southern Methodist University analysis suggesting that the move to Texas would make it harder for shareholders to hold the company’s board accountable.
“I believe Exxon’s proposed move to Texas, as well as the current implementation of its retail voting program, are not in the long-term interests of shareholders and will only serve to entrench company leadership and ultimately disenfranchise shareholders,” he wrote. “Your vote will have lasting implications for shareholder rights and can help ensure that Exxon’s Board of Directors remains accountable to you.”
But the filing was criticized by groups who called it a sign of New Jersey’s eroding legacy of innovation and job creation that has companies voting with their feet. They pointed to recent lawsuits filed by New Jersey and New York targeting the fossil fuel industry.
“Exxon’s move to Texas should be a wake-up call for our leaders in Trenton, and in New York: we’ll continue to lose out if they fail to rein in the legal abuses that make the region the lawsuit capital of the world,” Elissa Frank, President of the New Jersey Civil Justice Institute said in a statement. “Instead of suing — and deputizing every law firm to sue — our top companies, we should be working towards a more affordable and competitive economy.
“Does the New York City Comptroller really think it is better for shareholders that a company remains in a state where it’s the target of opportunistic lawsuits?” she asked.
James Copland, Senior Fellow and Director of Legal Policy at the Manhattan Institute said, “rather than focus on improving New York City’s business climate, the comptroller is more interested in opposing ExxonMobil’s proposed redomiciling from New Jersey to Texas, solidifying its operations in a less hostile business environment.”
“It appears that Mark Levine plans to continue former Comptroller Brad Lander’s ESG crusade against the energy sector,” he said. “These misplaced priorities are exactly what is driving businesses out of New York and the northeast towards states like Texas.”
The company, which was first incorporated in 1882 as Standard Oil, announced in March that it was relocating its headquarters from New Jersey, where it has been for more than 140 years.
ExxonMobil Chair and CEO Darren Woods said in a statement at the time that Texas has “made a noticeable effort to embrace the business community” and “has created a policy and regulatory environment that can allow the company to maximize shareholder value.”
The company is one of several major corporations that have made the move to Texas in recent years, business groups noted, with the state offering lower taxes and operating costs, a large workforce, expansive industry ecosystem and government incentives.
“Companies large and small have been physically moving to Texas for decades,” Ryan Patrick, CEO of Texans For Lawsuit Reform said in a statement. “But now that our corporate regulatory environment is built to move at the speed of modern business, the traditional centers of corporate regulation are seeing their influence diminish. New York is left complaining rather than competing.”
