Retail voting programs could gradually gain traction among companies with large individual shareholder bases, Elizabeth Morgan, partner at King & Spalding LLP, said in an interview on the Activist Investing Today podcast. ExxonMobil Corp. (XOM) reported 3% uptake within months, she said, while Tesla Inc.’s (TSLA) program provides a framework for other companies.

Morgan advises public companies and boards on Securities and Exchange Commission law and reporting, governance, proxy disclosure, shareholder engagement and activism. Morgan advised Marzetti Co. (MZTI) on its $400 million acquisition of Bachan’s Inc. in February and, in 2022, she provided legal advice to Evolent Health Inc. (EVH) on its acquisition of Magellan Specialty Health. In 2020, she advised Evolent on its settlement with Engaged Capital LLC.

The SEC could soon approve a rule giving companies the option to switch to semiannual reporting. If it does, Morgan said, corporations that opt into less frequent financial reporting could give activists an opening to control the narrative during six-month information gaps. Some companies may continue releasing quarterly financial summaries without filing full quarterly reports twice a year.

Eliminating nonbinding say-on-pay votes, Morgan said, could redirect shareholder dissatisfaction toward compensation committee members. Meanwhile, AI may reduce proxy advisers’ role in routine voting, though their research and meetings with opposing sides should preserve their value in contested situations.

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