Who Owns Big Oil?

Take a guess at what percentage of the big oil companies is owned by the executives? Now, take a guess at how much is owned by pension and mutual funds? If you guessed that the fat cats owned it all, you would be wrong. 27% is held by pension funds, 14% in individual retirement accounts, and 29.5% are held by mutual funds. Pension funds provide retirement benefits for millions of ordinary workers in the United States. Individual retirement accounts are owned directly by ordinary Americans. Particularly, in the case of individual accounts we are not seeing only a few account for the ownership in oil companies since individual retirement account contributions are sharply limited by IRS tax rules. Many people that you know own shares in oil companies directly or indirectly. Management only holds 1.5% of shares outstanding. (Source) You can look at sites like Yahoo Finance that disclose the major holders in specific companies as well.

When politicians attack big oil and threaten to slap a windfall profits tax on them, they make little sense economically. They also threaten the future of American's investments for their retirement and education. There is pain for millions of people that have difficulty affording high gas prices, but a windfall profits tax is not the solution. If you believe that the oil companies will continue to make high profits, set aside some money to invest in them. Even better if you use a tax advantaged plan like an IRA or 401K.