HOUSTON/BOSTON (Reuters) - Exxon Mobil ( XOM ) is introducing a unique shareholder voting mechanism that will allow retail investors to automatically cast ballots in step with board recommendations during annual meetings, a move that may help the top U.S. oil producer fend off activist campaigns.

On Monday, the U.S. Securities and Exchange Commission said in a letter that it would not object to the plan from Exxon as long as the company met certain conditions, including providing annual reminders to investors who opted into the mechanism about their participation. The SEC's response could prompt other companies to follow suit.

The oil major has fought back aggressively against activists in recent years, and could shore up more support from its unusually large base of retail shareholders - who typically have lower turnout rates but vote overwhelmingly in support of Exxon's board.

Individual investors currently "lack access to numerous services that make voting fast and easy for larger institutional investors. Activist groups often exploit this gap to push political goals at the expense of shareholder value," Exxon said in a statement.

In the coming weeks, retail investors will be notified through their brokerages that they can enroll in a free program to vote their shares in line with management recommendations, Exxon said in a statement.

If investors change their minds, they can override the program and cast their votes manually according to instructions in the proxy materials. Exxon said it is the first U.S. company to offer such an option.

"As a matter of fairness, it's time to level the playing field," the company said.

Nearly 40% of the company's shares are held by individuals but just a quarter of them vote during proxy season, though they mostly support the board, Exxon said.

Retail investors hold about 30% of most large U.S. companies. They are a sought-after pool when companies face close board elections or campaigns for ideologically charged shareholder resolutions. Only a few other iconic U.S. brands approach Exxon's level of retail ownership including Apple and Tesla.

FIGHTING BACK AGAINST ACTIVISTS

Exxon has faced several high-profile activist shareholder campaigns tied to climate issues in recent years, notably in 2021 when three dissident directors were elected to its board.

Last year, it continued to pursue litigation against activist investors Arjuna Capital and Follow This, even after the groups withdrew their proposal calling on Exxon to cut its greenhouse gas emissions.

In a statement in May last year after a judge dismissed Exxon's lawsuit against Follow This, founder Mark van Baal said Exxon was attacking the rights of all shareholders to put forth proposals about emissions, the cause of climate change.

Exxon's most recent annual meeting in May featured no qualifying shareholder resolutions for the first time since 1958, following its aggressive campaign against resolution-filers.

In the statement, Exxon noted a number of top fund managers have created similar options allowing their investors to vote with corporate boards, although the fund firms also allow users to select other policies like choices that support more climate and social measures.

During an energy conference in Austin on Friday, Exxon CEO Darren Woods said the company wanted to stop activists from submitting the same proposal year after year. 

"My view is, if you're going to play that game, we can play too," Woods said.