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 15% 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, five 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), 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 60 escaped the last three months without losses. The markets were so difficult that only five 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 Jan. 29, 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 three months. In total, the bear-trapped CEOs identified by Capital IQ lost a combined $16.1 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 $1.8 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. Gary Dunton of MBIA (MBI) lost 76% of his holdings during the survey period, or $24.7 million, while Ambac Financial Group (ABK) CEO Michael Callen took an 82% haircut, bringing the value of his holdings in company stock down to little more than $400,000.
Performance Pay
Don’t reach for the Kleenex just yet. Despite the recent market turbulence, CEOs are still quite wealthy in company stock. Capital IQ identified 16 CEOs who still own more than $1 billion in their firm’s shares, and 73 who owned more than $100 million.

In the past, base salary was a much larger part of executive compensation, but starting in the 1990s corporate boards began to add a lot more stock to pay packages. Shareholder groups had argued that the interests of CEOs and shareholders weren’t properly aligned, says David Leach, managing director of compensation consulting firm Strategic Apex Group. "Conventional wisdom says an owner is going to take care of something better than someone who is renting," he says.

By paying CEOs in stock or stock options, "the concept is they get paid for the performance of the organization overall," says Don Lindner of WorldatWork, a human resources nonprofit.

But this doesn’t always work perfectly. When the economy is booming and the stock market is rising, even lackluster CEOs get rewarded. But now, while a recession threatens, CEOs of even top performers are hurt. For example, Amazon.com’s Bezos has doubled profits in the past year, yet he has lost $1.6 billion since October. Bezos didn’t fare too well when the company reported fourth-quarter results on Jan. 30 (BusinessWeek.com, 1/31/08). Investors’ concerns about the impact of an economic slowdown sent the stock tumbling 12%, to $65.29.

Tech Losses
The poor performance of technology holdings is a prime example of how broadly the stock market gloom has spread from its origins in the financial sector. While a few tech CEOs, such as Steven Ballmer of Microsoft (MSFT), have resisted the undertow, in total, top tech CEOs have lost more than $5.6 billion since October. The average U.S. tech CEO’s portfolio has fallen 19% since October, according to the Capital IQ screen, not much better than the 20% drop for financial CEOs.

Part of the problem for these CEOs is Silicon Valley’s love of stock options. Tech firms have typically used much more equity in pay packages than other companies. Tech chiefs have lost a lot, but past bull markets have made billionaires of Bezos, Ellison, and many tech executives. Also, tech losses are exaggerated a bit by the time frame of the analysis. Tech companies have faltered lately, but most had put in stellar 2007 performances up until November or so.

Still, the huge tech losses show there has been nowhere to hide from the recent stock market turbulence. Investors fled even from sectors that are traditionally havens in a tough economy. CEOs of health-care and consumer staples firms have also lost money—an average of 6% and 7%, respectively—though not nearly as much as in other sectors.

The Biggest Losers (and Winners)
Take a look at the accompanying slide shows for examples of CEOs who have won or lost big lately in the stock market. The biggest losers include some of the world’s best known executives, including Apple’s (AAPL) Steve Jobs, Howard Schultz of Starbucks (SBUX), and Google’s (GOOG) Eric Schmidt. Concern about the U.S. economy and online ad spending pummeled Google’s shares when it reported fourth-quarter earnings on Jan. 31 (BusinessWeek.com, 2/1/08).

The list of CEOs includes a variety of executives who have somehow found a way to make money in a tough market. Their outperformance usually reflects extraordinary circumstances: Surprisingly strong results that bucked an industry trend, or an outlook that suddenly turned from poor to favorable.

Of course, in today’s volatile markets, the current winners could wind up in the company of their unlucky brethren in a heartbeat.