EnergyFactor By ExxonMobil | Pespectives has a new home

America’s Middle Class = Big Oil

It’s not unusual for me to mention ExxonMobil’s shareholders in posts on this blog. After all, the work of ExxonMobil’s 75,000 employees is performed on their behalf.

Indeed, when commentators mention the “Big Oil” companies, they are really referring to stockholders – people who own shares in publicly traded companies like ExxonMobil. That’s worth keeping in mind whenever energy companies are portrayed as large, monolithic entities. The reality is that a company such as ours brings together millions of individual investors with differing dreams and objectives. In ExxonMobil’s case, these millions of shareholders – 40 percent of whom live in the United States – own more than 4 billion shares of ExxonMobil stock.

So who are these shareholders? Who makes up “Big Oil”? The answer, perhaps surprising to some, is America’s middle class.

That’s the finding of a new study that came out recently from consulting group Sonecon.

“Middle-class households dominate the ownership of U.S. publicly held oil and natural gas companies,” stated the report, which was commissioned by the American Petroleum Institute.

Along with individual investors who manage their own investments, these middle-class households own more than two-thirds of the outstanding shares of all U.S.-based publicly traded oil and natural gas companies.

WhoOwnsBigOil_Chart_11-2014

In fact, about half of U.S. households own oil and natural gas company stock. Because they do, they have benefited from the industry’s strong returns, which have tracked or outpaced the overall market over the last decade.

What is clear from Sonecon’s analysis is that ownership of publicly traded oil and gas companies is extremely broad-based. It is not dominated by executives but by ordinary investors, largely through their pension plans and retirement accounts.

As the nearby chart shows, less than 3 percent of shares in America’s publicly traded oil and natural gas companies are owned by executives or directors of those companies.

That number is small, and it’s even smaller for the largest of these – the integrated companies such as ExxonMobil and Chevron.  Less than one-third of one percent of shares in these companies is held by insiders. The vast majority of shares belong to ordinary investors. Individual investors own more than 42 percent of all shares in these companies. The rest are largely held by institutional investors in the form of mutual funds, pension funds, endowments, and the like – many of which are serving individuals, too.

Read the whole report to see how Sonecon arrived at its findings.

And be sure to check out another excellent site – WhoOwnsBigOil.org – put together by the folks at Energy Tomorrow. It explores this important issue in more depth and provides insights that too many journalists, politicians, and activists fail to note in their criticisms of the energy sector.

 


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