Who Owns ExxonMobil? – April 06, 2008
The Democrats have fueled a public outcry against “Big Oil” and blamed the rise in gasoline prices on executive greed. They cite the large salaries and retirement packages awarded to the CEO’s. Congress calls them to “The Hill” to defend gas prices and they generally get raked over by Democrats. There’s talk of discontinuing the tax breaks for Big Oil and capping the salaries of the CEOs’. Democrats, Independents and some Republicans resent profits in the billions – some calling them obscene.
Who owns Big Oil companies? The government? No. Then what jurisdisction does Congress have over their business models, salaries or product pricing? Does the Constitution give Congress the authority to set salary caps and product prices and condemn business models?
Big Oil companies are publicly traded on the stock exchanges. That means that the companies are broken into equal shares and the shares are sold to individuals, retirement and mutual funds and other companies. Shares are also given to oil company employees as part of their salary, bonus, retirement plan or benefits package. Bottom line: ordinary people own Big Oil. If you have a retirement plan that includes a mutual fund, you are probably an owner of Big Oil. If you work for Big Oil, then you receive your living wages, benefits plan and retirement funds from B.O. Check your funds to see which B.O. you own. You may own more than one.
So who is hurt when the government and the Democrats attack B.O.? Probably YOU! And your parents, uncles, aunts, maybe your grandparents, sisters, brothers, neighbhors, friends, co-workers, just about everybody. Maybe your pastor. Even your schools and favorite organizations can own shares of stock in B.O. Unions often own funds including B.O. shares. Before you join the chorus of B.O.’s enemies, you’d better be clear about who you are really hurting. Perhaps your parents’ fixed income from their retirement funds. Perhaps your kids’ college fund. It’s true!
Now why do the Democrats and Congress want to punish B.O. for making “obscene” profits? In fact, what is “obscene” about being successful? Does anyone call Bill and Hillary Clinton obscene for making about $109 million in seven years? Or John Edwards? Or John Kerry – no make that his wife Theresa Heinz, of the Heinz food fortune? How about the Rockefellers, Kennedys, Romneys, Bill Gates, Warren Buffet, Hollywood movie stars and moguls? Nope. The Democrats just go to these people with their hand out, shamelessly asking for donations to fund their campaigns.
It’s important to understand how publicly traded companies operate. It is their fiscal responsibility to make as much profit as they can for their shareholders and to produce as large a return as possible on the company’s assets. If they don’t, they are not serving their owners, and the management needs to be replaced. B.O. has done a great job during the boom years. But there have been plenty of years when the oil industry was a bust. Oil was $10 a barrel instead of today’s $110/barrel. B.O. still had to run their field operations, refineries and offices world-wide on a shoestring budget. The Democrats and Congress were not on television every day saying, “Poor Big Oil. What’s happening to their profit margins is obscene (too low). Let’s call them to The Hill and ask them what we can do to help.”
B.O. returns the profit to their owners in share price and dividends. Many people depend on those dividends for their income during their senior years of life. Tampering with that will harm people who can no longer get a job and make it back. It will hurt parents who will need the money this year or next year to pay tuition for their child’s college. By the way, do you want to own stock in any company that doesn’t perform well? Or do you want to own the companies that make the most money? Most people want to own the companies that make the most money.
It would make a lot of sense to find out how much of B.O.’s profits go back into research and development to improve the industry, finding new oil, new drilling methods, conservation, safety, new facilities, “green” alternatives and “clean fuels”, less footprint strategies, more environmentally friendly methods, and community partnership plans.
Now how about those CEOs’ salaries, you know, the shameful ones? Well, imagine the talent, training, education, skill, tact, diplomacy, international etiquette, time and stress it requires to run a mutli-billion dollar world-wide company with millions of employees and thousands of facilities all over the world. If a CEO makes a mistake or wrong decision, it can cost millions and have devastating consequences. No stress there. Imagine, too, that this job requires delicate negotiations with foreign governments, some hostile to the U.S. because of the freedom and democracy guaranteed to our citizens, including our women. Imagine being called to The Hill to be raked over by Democrats in Congress and made to feel like a criminal for doing a bang up good job and getting compensated for your hard work and special skills. Imagine being called obscene for being successful like Bill Gates and Warren Buffett.
I suggest everyone take an intelligent look at Big Oil and consider being appreciative for their efforts that make our lifestyle so wonderful. Like driving your SUV, van or luxury car – heck, whatever vehicle you prefer, even a motorcycle – Harley-Davidson, across this beautiful country, or just to school and work. Or to fly home to Grandma’s at Christmas time. Or for a jet to fly big name Hollywood stars to shoot a new film or participate in a protest. OR to drive and fly presidential candidates and their entire staff all over the country, and to many cities multiple times for fund-raisers, debates, TV appearances, and primaries. In other words, don’t bite the hand that feeds you and makes your life so great!