Exxon Mobil intends to drop its corporate registration in New Jersey and re-register in Texas, where its headquarters are located. This move could strengthen its defenses against climate activists and shareholder activists.

The company announced the plan in a proxy filing. If shareholders approve the change, Exxon will join other high-profile companies such as SpaceX, Tesla, and Coinbase that are incorporated in Texas.

A new Texas law enhances legal protections for businesses through various mechanisms, including allowing companies to set ownership thresholds to reduce the threat of shareholder lawsuits.

In the filing, Exxon stated: "The board believes that Texas legislators and judges, who may influence decisions affecting Exxon Mobil, generally have a better understanding of our business and operations."

The largest U.S. oil producer, headquartered in Spring, Texas, has long faced environmental litigation. New Jersey officials sued Exxon, Chevron, and other fossil fuel companies in 2022, alleging they "contributed to climate change and forced New Jersey to spend billions recovering from major natural disasters such as Superstorm Sandy and Hurricane Ida." That lawsuit was dismissed in 2017.

According to Jill Fisch, a law professor at the University of Pennsylvania, incorporating in a company’s home state helps executives gain attention from officials who can assist with tax or other issues. She noted that registering in one’s home state is an effective way to show loyalty and draw lawmakers' attention.

Although Exxon originated in New Jersey, its headquarters are now in Texas.

Last September, Exxon introduced a new plan aimed at blocking activist shareholder proposals at annual meetings. The plan allows retail investors to vote automatically based on the board’s recommendations. Nearly 40% of Exxon’s shares are held by individuals, but only a quarter of them participate in proxy voting seasons, with most supporting the company’s board.

Texas has been working to solidify its reputation as a corporate haven and has become a major beneficiary as companies leave Delaware, once a popular state for incorporation.