FTI Consulting’s Garrett Muzikowski recently passed along his firm’s thoughts the implications for firms pondering leaving Delaware of Exxon’s successful “JExit” from New Jersey to the Lone Star State. Here’s what FTI had to say:

– Some Support From Big 3 Likely: For Exxon’s proposal to receive 71% support from shareholders despite both ISS and Glass Lewis recommending against means that at least some large institutional investors voted in favor of the proposal. With each of the Big 3 splitting their stewardship teams into two separate groups with different teams and voting priorities, it’s likely these weren’t unanimous “FOR” votes. It’s even possible 1-2 institutions were more against than for. But 71% implies there was at least some large institutional support for this proposal. At the same time, we do know that at least one very large active manager voted against the proposal without much internal debate. We won’t know specifics for all investors until votes are disclosed later in 2026.

– Proxy Advisors Have Drawn a Line in the Sand: For the time being, companies proposing to redomicile to Texas can expect against recommendations from ISS and Glass Lewis. ISS has gone against 13 of 15 Texas proposals, while GL has gone against 12 of 13. Note that ISS has deemed ArcBest’s approach to the optional provisions in Texas as best in class (adopting charter provisions that opt out of higher thresholds for shareholder proposals or litigation). Even despite having identified this approach as “best in class” – ISS STILL recommended against the ArcBest proposal.

We fully expect ISS and Glass Lewis to include redomiciling in their policy surveys this upcoming fall, as they often do with “new” governance topics. We are less confident they will actually change their stance – but that remains to be seen. At a minimum, the survey will provide incremental clarity for issuers going forward.

– Exxon is a Bellwether for Redomiciling: Prior to Exxon, most companies who made such a move had a near-controlling shareholder and/or were small, unknown companies. Exxon is a massive, well-known, public company with a normal shareholder base. Exxon simply filing its preliminary proxy drove a lot of boardroom discussions on the topic. Now that the proposal has comfortably passed, we expect the conversations to pick up in volume and Boards to analyze this much, much closer.

– Key Factors for Investors: Unlike ISS and Glass Lewis, investors seem to be taking a case-by-case approach to redomiciling. For most investors, it’s an assessment of the tradeoff between economic benefit and a potential decrease in shareholder rights. While NPX vote data won’t be available until late September, our back of the napkin analysis of support levels to date (factoring in controlling shareholders) seems to suggest shareholders are assessing companies operational presence in Texas, the way they’ve approached Texas’ optional provisions, and the company’s governance history/profile.

– Hometown Heros are Likely Next: A key reason Exxon chose to reincorporate to Texas was that its headquarters and a significant amount of its people and operations are based in Texas. Texas is Exxon’s home. Companies who can confidently say they are Texas companies will be the next ones to move (and some already are). There’s a lot of variables at play beyond location of the business that go into investor support, but we think the next litmus test is if a company with little to no presence in Texas can also get shareholder support to redomicile. That’ll truly open the floodgates.

For those of you following the DExit trend, its official scorekeeper, UNLV Law School’s Ben Edwards, has recently updated his tally of the migratory activity of Delaware corporations. Spoiler Alert: Texas has been the favorite destination for Delaware emigres in recent months, but Nevada is coming on strong.

– John Jenkins