The Billion-Dollar Losers

BusinessWeek's analysis shows even the richest and savviest of top U.S. executives have been wounded by the tough stock market

Oracle CEO Larry Ellison (left) and Carnival CEO Micky Arison (right) are among six U.S. chief executives who have lost more than $1 billion in the value of their company stock holdings since October, 2007. Getty Images

by Ben Steverman

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Editor's Note: Originally published on Feb. 1, 2008, this story has been updated with the latest data as of Feb. 25, 2008.

Big-name U.S. CEOs have taken a bath, but not the kind that leaves you feeling warm and relaxed.

As the bears took over Wall Street, chief executives, rewarded handsomely in years past with stock options, have seen the value of their holdings plummet.

The continuing financial crisis and fears of a U.S. recession have sent the broad Standard & Poor's 500-stock index down 13% since its peak in October. BusinessWeek asked financial information provider Capital IQ to analyze how this stock market correction has affected CEOs of major U.S. companies. (Capital IQ, like BusinessWeek, is a unit of The McGraw-Hill Companies (MHP).)

The resulting data show that market forces have chewed up the portfolios of even the savviest chief executives. Capital IQ estimates that since October, six CEOs have lost more than $1 billion through holdings of their companies' stock: Larry Ellison of Oracle (ORCL), Michael Dell of Dell (DELL), Micky Arison of Carnival Corp. (CCL), Jeffrey Bezos of Amazon.com (AMZN), Eric Schmidt of Google (GOOG), and Rupert Murdoch of News Corp. (NWS).

More than 20 CEOs on the list have lost more than $100 million. The pain is widespread, too. Of the 450 major company CEOs analyzed, only about 90 escaped the last four months without losses. The markets were so difficult that only 13 of that group were able to achieve what these CEOs would typically take for granted—gains of more than $10 million each.

The methodology: Capital IQ analyzed the change in the value of CEO holdings in their firms' stock from the market peak on Oct. 11, 2007, through Feb. 25, 2008. The estimates are based on each company's annual disclosures of CEO stock holdings, so it does not reflect any buying and selling by CEOs since their last reports.

But the estimates do show how quickly CEO fortunes have shrunk in four months. In total, the bear-trapped CEOs identified by Capital IQ lost a combined $18.9 billion.

The Financial Storm

The U.S. economy's troubles began in the financial sector last summer, as bad mortgage debt caused havoc in the credit markets. As a result, some of the biggest losers are CEOs in the financial sector. The portfolio losses of top financial CEOs on the list total $2.2 billion.

Those at the center of the financial storm have been hit hardest.

Countrywide Financial (CFC) CEO Angelo Mozilo has seen his stock lose nearly two-thirds of its value, costing him more than $100 million. (Mozilo will step down as Countrywide's chief after the planned acquisition of the company by Bank of America (BAC) is completed.) Politicians, including Senator Hillary Clinton (D-N.Y.), have called Countrywide, the U.S.'s largest mortgage lender, a major culprit in the loose lending standards that led to the subprime crisis.

Subprime debt has also devastated the holdings of CEOs of bond insurers. Joseph Brown, who recently returned to the CEO chair at MBIA (MBI), lost 78% of his holdings during the survey period, or $51.1 million, while Ambac Financial Group (ABK) CEO Michael Callen took an 82% haircut, bringing the value of his holdings in company stock down to $1.8 million.