and DEI matters. In June, Texas passed a law requiring additional disclosure from proxy advisors if their recommendations are based on “nonfinancial” factors – for example, ESG or DEI initiatives.31 ISS and Glass Lewis have announced changes to their practices ahead of the 2026 proxy season in response to regulatory pressure, particularly practices relating to ESG and DEI matters. ▪ Focus on Retail Investors: In September 2025, the SEC said it would not recommend enforcement against ExxonMobil’s proposed retail voting program, under which retail investors can give standing instructions to have their shares voted in accordance with the company’s recommendations. Retail investing continues to grow significantly through Robinhood and other similar fintech firms lowering barriers to entry, so such programs could become a meaningful tool in proxy contests, particularly for companies with large retail investor bases that currently vote far less frequently than institutional investors. However, it remains to be seen how many retail investors will opt in to such a program and whether other public companies will implement similar or other mechanisms. 31 In August, the federal district court for the western district of Texas preliminarily enjoined enforcement of the law and set a trial date for February 2026. See Institutional Shareholder Services Inc. v. Paxton and Glass, Lewis & Co., LLC v. Paxton. The rise in private settlements suggests that both companies and activists are less willing to bear the costs and distractions of public campaigns. 2025 M&A Annual Review 55
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