CORPORATE OWNERSHIP

Small businesses may be owned by a single individual, but major corporations are far too large to be owned in this way. Instead corporations are owned by many people, called shareholders, who own shares of stock. Investors purchase stock because it allows them to share in the company's profits, although there are no guarantees that the company will be successful. Each share of stock represents ownership of a portion of the firm and its possessions, or assets. For example, Exxon Corporation has about 600,000 shareholders, who together own a total of about 1.2 billion shares of stock.
Shareholders who possess a large number of shares own a larger portion of the company than those who possess only a few shares. For example, an individual who owns one share of Exxon stock owns just under one-billionth of the company. At the other extreme, a large financial institution, such as an insurance company or a company that manages investments, may own several million shares of Exxon stock. About half the shares of large corporations are owned directly by individuals. The other half are owned by financial institutions.
Shares of stock are bought and sold on a number of stock exchanges. For example, Exxon's shares are regularly bought and sold on the New York Stock Exchange. At the end of 1995 Exxon's shares were priced at $80 each. At that price it would have cost about $100 billion to buy all of Exxon's stock.
Although a corporation's shareholders own the company, they do not manage it. Instead they elect a board of directors who hire key company executives and review their job performance.
Source : Microsoft ® Encarta ® 2006.