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Investing Series: Why do we care who holds the stocks? (Institutional ownership)

This is a part of the Investing Series.


The short answer:

You care because others care.

The long answer:

It doesn’t necessarily mean it is just employees or executives holding the stock, it can mean investment firms, individuals, employees, or a whole range of folks.

It’s an indication of a few things:

  • How confident people working there feel in the prospects of that company
  • How motivated and connected they are to do a good job (it’s their money too) 
  • How confident other institutions or companies are in holding the stock

As an example, an employee who buys into the stock of the company they’re working for, will work not only as an employee but thinking of it as their business as a part-owner (no matter how small), because they own shares.

They might even own part of the company as part of their retirement or pension plans (very plausible).

A lot of companies give out stocks as part of compensation. I remember being offered a discount on the shares of a company I worked for, if I wanted to buy in.

Alas, I was $60,000 in debt and unable to fork over money, but I did do the 100% company match on the pension plan 🙂

Other institutional holders might be investment firms that hold mutual funds that investors like you or I buy. If they buy into the company it means that they think we should buy into them too (via their mutual funds of course, to get the maximum $$ out of us).


In Google Finance, near the top you will see the percentage of stocks owned by the company or “institution-owned”.

Let’s go through an exercise with one company.



In Yahoo Finance (OWNERSHIP > MAJOR HOLDERS) it goes into a way more detail and breaks it down:


As you can see, the % of shares held by employees and owners, also called Insider Shares (they work on the “inside”, get it?).

Then you can see the other percentages of who owns the stock as an investing firm (Institutional / Mutual Fund Owners), and how many institutions owns those shares such as BlackRock, Bank of New York Mellon Corporation and so on.

For people who are BIG TIME investors, as in direct holders of stock, their names get listed by law (can’t hide!).

Mr. James M. Zimmerman above, owns 10,384 shares of the stock as of June 9th 2013, or about $1.08 million worth in this one company.

As we can see in another quick chart under COMPANY > PROFILE, he is not an executive there:

Yahoo-Finance-Executives-ListAs a side note, you can also see how much of their stock ownership has been exercised, that is, sold.

Ms. Jennifer L. Pritchard, at age 54, sold about $2.65 million worth of her stock (in preparation for retirement?).

The others, have not sold any of their stock which I am sure is part of their compensation package.

Incidentally, does anyone find it kind of effed up that the Executive VP of HR earns $681,000 a year where  even the Chief Operating Officer earns a “measly” $543,000?

Talk about inflated salaries. No wonder the “We are the 99%” movement started. Sheesh.


A quick little Google search brought me his profile (but alas, no photo) via Forbes:


From there a quick look tells me he’s a director of 3 companies:

  • Chubb Corp (great name, right?)
  • Furniture Brands International
  • Fossil (DING DING DING!)

…and this tells me that in 2011, he got about $99,914 in Fossil stock, which I’m sure was just adding to his  bucket of the total $1.08 million he has in the company, as he has been the director of Fossil since September 5th 2007!!


It is and it isn’t.

See, I’m always curious as to who these investors are with millions in each company.

It’s not interesting if they’re directors and got the stock as part of compensation (if you’re rich, why bother taking money? Just take stock, especially if you’re a director), but it IS interesting to see what other companies he has a lot of heavy investment in:

  • Macy’s (clothes, accessories, department store)
  • Convergys Corp. (customer management and information products)
  • HJ Heinz (ketchup)

From there, you can read up on those companies and see if they’re interesting to invest in as well.


  • We care about who owns the stocks because it’s a question of motivation to make more money
  • Insider holding of a stock is a strong sign of confidence in the company’s future / prospects
  • We also care about direct holders of stock because we can get leads on other stocks to buy



  • cj

    Mochimac! Fascinating stuff! If investing is your biz, then this stuff is your business to know, otherwise, it is info overload. I am a classical guitar player blogger, so I cultivate a healthy ignorance about most things outside those disciplines. Your stuff is so goo though, I enjoy reading it and picking up tid-bits here and there.

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