Who are the biggest owners of oil company stock?
Contrary to popular belief, America’s oil and natural gas companies aren’t owned by a small group of insiders. In fact, less than 3 percent of industry shares are owned by corporate officers and board members. The rest is owned by regular Americans, many of them members of the middle class, such as teachers, police officers, and firefighters.
How does industry stock ownership break down? A 2011 analysis by the Sonecon advisory firm found that nearly 50 percent of all industry shares are held by public and private pension and retirement funds, including 401(k)s and IRAs. Individual investors own 20 percent, while financial institutions and asset management companies own 27 percent of shares. The remaining 3 percent are owned by corporate managers.
API’s Vice President of Regulatory and Economic Policy Kyle Isakower explained the implications of oil and natural gas ownership:
"The U.S. oil and natural gas industry ... supports 9.2 million jobs and pays more taxes than any other industry and at higher effective rates. Now, as this new Sonecon study shows, it also benefits millions of Americans who are its true owners. Policy proposals ... can give the impression that if only a few rich companies or executives would pay more, the rest of America would have to pay less, or even nothing at all. The reality is far different. The owners of America's oil and natural gas companies are largely retirees or middle-class Americans saving for retirement. The cost of higher taxes on this industry would be borne largely by them, not by CEOs."
A strong oil and natural gas industry is a vital part of retirement security for millions of Americans. State pension fund investments in oil and natural gas companies are providing strong returns to middle class Americans and outperforming other investments. In fact, returns on oil and natural gas assets in the top two state funds in 27 states averaged 42 cents for each dollar invested, compared to just 6 cents for other assets in these funds from 2005 through 2009.
The bigger picture: Instead of punitive tax increases on an industry whose strong performance benefits so many Americans’ investments and retirement security, why not find ways to let an industry that contributed $476 billion to the economy in 2010 do more: more jobs, more energy to secure the country's future, more revenue for government.