I've heard many XOM employees talk about XOM as a large part of their retirement portfolio.
Why? Wouldn't it be better to invest elsewhere to avoid a double whammy when XOM isn't doing well? (Like now) Isn't this like putting all your eggs in one basket?
Enron comes to mind. I'm sure there are legit reasons though, but I can't think of them.
Over 30 years with the company here... there has been a lot of misinformation floating around for a long time about the tax implications of selling XOM shares the company had bought you. Luckily I started ditching XOM stock over 10 years ago, was down to only 3% of my portfolio when it was still in the mid-60's, and now I don't have a penny of XOM stock. I don't anticipate I'll ever buy it again.
Cause they’re stupid
Many older employee held stock in thrift because of the 7% matched for XOM prior to 2001 (Enron). Many diversified by taking lump sum cash and taking dividends out of savings plan and buying tech stocks during 2001 to 2010 (after the 2001 tech crash). My entire portfolio of tech stocks in Amazon, Google and Apple was bought with XOM Dividend taken out of the savings plan. Jeff Bezos Dad was EM employee. EM is only 15% of my retirement portfolio but EM dividends bought me Amazon at $10/Sh in 2001, apple at $20/Sh in 2001 and Google at 90/Sh in 2003 and FB at $25/Sh in 2011...Hoping for massive layoffs so my dividend is protected. I did Roth conversion on some IRA shares of XOM...Now my XOM dividend is TAX FREE. Will use thse to move into growth stocks in a Roth.
Those older employees were around to witness Enron blow up but decided to not take steps to protect themselves. I was in school when Enron happened. I learned to not put all my eggs in one basket.
There are countless people in XOM who work on SOX reporting. Do these people not understand why SOX came about?
“Best and brightest”
They are probably older employees that were around when it seemed worth it.
Bottom line: they are not the best and brightest that people assume they are. In fact they are patently not. Personally not surprised because I know who they hired from my school.
You remember to hold the handrail but forget to check your 401k!!!!
For older employees the match was 7% in stock, vs you contributed 6% to stock...If not in Stock, you contributed 6 but got only a 6% match. Many 30 year plus accumulated alot of stock with this additional 1% incentive. When Enron melted down, the company allowed the 7% match for a 6% employee contribution into anything. The law changes with Enron meltdown got laws that allowed employees to better diversify.
UK offers Buy 1 get 2 free scheme, so tough to loose money.
I used to be one of those employees. Got out of ExxonMobil stock 3 years ago at $85. The stock has been declining for a long time. It ended 2013 at $101 and today it is $33. That’s a 68% decline. In the same timeframe, the S&P 500 Index has increased by 83%! Diversify and don’t put more than 5% of your portfolio in a single stock.
There are some true believers out there, but from talking to countless people in the last few months, it’s mostly people who couldn’t be bothered to put in the time to manage their portfolio.
So many people were unaware that XOM has not been able to fund the dividend without debt since 2015.
I believe in the past (at least 2000 era) you didn’t get company match unless it went to XOM stock. Anecdotal, as when I started you got match regardless, but that is what some older friends at work told me. Yes, they should have changed allocation at some point, but they didn’t for ‘reasons’.
That's not something not unique to XOM employees. You are almost guaranteed to do better or worse than the broad market, and you have a chance to lose it all. But most people have little financial knowledge and think investing is just gambling any way, so they pick the stock of companies with household names and/or their employer. Sad but people only look at those for whom it worked out well in the past and assume that will be them in the future. Put it all on red and see what happens!