Tesla and Goldman Sachs Retail Voting Programs, September 29, 2026: Notes for Corporate Governance

Retail shareholders own a large share of many US public companies and vote only a small fraction of it. Quorum shortfalls, failed routine votes and expensive solicitation campaigns follow. In the last two weeks of September 2026, the SEC’s Division of Corporation Finance gave issuers a new tool aimed at that problem, and critics a new concern. Tesla and Goldman Sachs each received staff no-action relief for a retail voting instruction program, and governance trade press has begun calling the Tesla letter a model other issuers may follow. This article explains what the letters reportedly allow, why they are contested, and what a governance team should prepare.

What did the SEC staff actually say?

The sequence matters. In September 2025, staff issued a no-action letter to ExxonMobil for a retail voting program. According to Goodwin’s analysis, staff relied on conditions that included availability to retail investors at no cost, annual reminders to participants, the ability to cancel or override instructions at no cost, continued delivery of all proxy materials to participants, and disclosure of the program on the company’s website and in its proxy statements.

On September 28, 2026, staff issued a letter to Goldman Sachs Group that Goodwin describes as expanding the roadmap. Goodwin reports that the Goldman letter permits enrollment before a meeting-specific definitive proxy statement is furnished, allows participant information to be omitted from enrollment communications provided it appears in each definitive proxy statement, contemplates internal-system enrollment for current employees with safeguards so that communications do not state or imply that enrollment is a condition of employment, and raises the potential for a single enrollment form to cover multiple registered or beneficial accounts. Issuers must still furnish the definitive proxy statement before or at the same time as the related proxy card or voting instruction form.

On September 29, 2026, the day Tesla’s request was dated, staff signed off on Tesla’s program. Press reports say Tesla’s general counsel, Brandon Ehrhart, and its outside counsel Sullivan & Cromwell sent the request to the SEC’s Office of Mergers and Acquisitions. Tesla calls the program an Issuer Voluntary Retail Voting Program. Retail investors opt in, and their votes are thereafter submitted in line with the recommendation of the company’s board. Participants choose between two scopes: every matter, or every matter except contested director elections and mergers, acquisitions or divestitures that require a shareholder vote. Under the broader scope, a participant’s shares would back the board on a merger without a fresh decision. Reports add that votes are cast when Tesla files its definitive proxy, which is before shareholders receive it. Participants can override any proposal or opt out for free, and receive a reminder at least once a year.

Goldman Sachs has said it will launch a voluntary and free Voting Instruction Program that allows individual shareholders to set standing instructions directing their shares to be voted in line with its board’s recommendations, and that shareholders can change, cancel or opt out at any time.

Why issuers want these programs

The business case is easy to state. Retail ownership has grown, but turnout has not. Companies pay solicitors, send reminders and sometimes adjourn meetings to reach quorum or approval thresholds. Charter amendments and equity-plan proposals that need a majority of outstanding shares can fail because retail holders never vote. A standing instruction converts passive holders into consistent voters at no cost to them, and it lowers the company’s solicitation cost.

There is also a reputational argument. A company can say that it is expanding participation, not merely managing a result. When enrollment is easy, free and reversible, the program looks like a service. For companies with large employee-shareholder populations, internal enrollment adds convenience, which is why the Goldman letter’s treatment of employee enrollment attracted attention.

Why critics are alarmed

Responsible Investor reported that retail voting programs could lock in management support, and that market participants say even small participation could be decisive on close ballots. We could not access the full article, so we rely on its published headline and subheading, which say that the Tesla letter opens the door to widespread adoption. The underlying concern is straightforward and deserves a fair statement.

A vote cast automatically for the board is, by design, a vote that does not respond to new information. If a standing instruction is cast when the definitive proxy is filed, before the holder has read it, the holder is voting on a recommendation they have not seen. Over time, instructions given years earlier could back a board on a proposal that did not exist when the holder enrolled. Critics argue that annual reminders are a thin safeguard, and that default behavior shapes outcomes because most people do not revisit settings.

Defenders respond that participation is voluntary, free and reversible, that holders keep full access to proxy materials, and that the alternative to a standing instruction is, for most retail holders, no vote at all. Both positions rest on a factual question that data will eventually answer: how many enrollees ever override their instruction, and how often do overrides occur on contested matters?

Reports also link the Tesla letter to speculation about a possible future Tesla and SpaceX merger. That is commentary, not fact; no merger has been announced in the sources we reviewed. But the Tesla scope option that backs the board even on mergers makes the question understandable, and any issuer adopting the broader option should expect it to be raised.

What should governance teams do now?

Treat this as a decision to prepare, not a project to launch. A sound sequence looks like this.

• Read the letters. Obtain the ExxonMobil, Goldman Sachs and Tesla letters and the underlying requests. List each condition on which staff relied and map it to your facts.
• Know your holder base. Estimate the percentage of shares held by retail investors, historical turnout, and which agenda items have come close to failing. A program has the most value where retail turnout is the binding constraint.
• Choose the scope deliberately. Excluding contested director elections and transactions requiring a shareholder vote is a conservative design. The broader scope concentrates risk and invites criticism.
• Design the override and reminder experience. Make cancelling as easy as enrolling, send reminders at least annually, and test the mechanics.
• Plan disclosure. Describe the program in the proxy statement and on the website as the letters contemplate, in plain language, including who bears cost and how to opt out.
• Set board oversight. Have the board or a committee approve the program, review enrollment and override data each year, and reserve the right to suspend it for contested situations.
• Engage investors early. Speak with your largest institutional holders and proxy advisers before launch. Surprise is what turns a participation tool into a controversy.

Employee enrollment needs special care

The Goldman letter reportedly contemplates enrolling current employees through internal systems, with safeguards so that communications do not state or imply that enrollment is a condition of employment. Employees are a sensitive group because their relationship with the company creates pressure that ordinary retail holders do not face. Even with careful wording, a prompt from an HR portal can feel like an instruction. If you consider internal enrollment, involve HR and employment counsel, keep the message neutral, avoid manager-led promotion, and measure whether enrollment rates among employees differ sharply from other retail holders, which could signal pressure.

Risks beyond the letter

Several risks sit outside the four corners of a no-action letter. State corporate law governs the validity of proxies and voting instructions, and Delaware courts examine board conduct in contested situations. Stock exchange and broker rules affect how shares held in street name are voted. Data-privacy rules apply to the enrollment data you collect. And proxy advisers and institutional investors may update their voting policies, for example by treating a board-controlled retail program as a factor in how they evaluate director accountability.

Litigation risk deserves attention too. If a program were used in a closely contested vote, plaintiffs could argue that the board used it to entrench itself, and the standing instructions would be Exhibit A. Contemporaneous records showing why the board adopted the program, how it protects participants and how it excludes contested matters would help.

What to tell your board

A concise board briefing can cover five points. First, what the staff letters allow and what they do not. Second, the likely benefits: higher participation, lower solicitation cost and easier approval of routine items. Third, the criticism: automatic support for management, votes cast before information is read, and reliance on inertia. Fourth, the design choices that reduce risk: narrow scope, easy override, annual reminders, clear disclosure and a suspension rule. Fifth, the competitive landscape: ExxonMobil, Goldman Sachs and Tesla have moved, and peers and advisers will ask where you stand.

The bottom line

The SEC staff letters give issuers a legitimate route to raise retail participation, and the ink is barely dry. The test of any program will be whether participants keep control in practice, not only on paper. Governance teams that study the letters, choose a conservative scope, build real override and oversight mechanics and talk to investors early will be ready if the board asks. Those that wait for a competitor’s controversy will be answering questions on someone else’s terms.

This article summarizes public reports and law-firm analysis as of October 4, 2026 and is general information, not legal advice. Consult securities counsel before adopting any voting program.