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WORLD> America
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CEOs, famous investors hit hard by market plunge
(Agencies)
Updated: 2008-11-03 08:26 NEW YORK – Here's something that might provide a bit of solace amid the plunging values in Americans' retirement accounts: Warren Buffett is losing lots of money, too. So are Kirk Kerkorian, Carl Icahn and Sumner Redstone.
They are still plenty rich, but their losses -- some on paper and others actually realized -- illustrate how few have been spared in today's punishing market when even big-name investors, corporate executives and hedge-fund titans are all watching their wealth evaporate. The portfolio damage for some of these high-flyers has soared to billions of dollars in recent months. And they can't just blame the market's downdraft -- some did themselves in with badly timed stock purchases or margin calls on shares bought with loans.
It has been a painful year for anyone exposed to the stock market. The Standard & Poor's 500 stock index, considered a barometer for the broad market, has lost about 36 percent since January, with every single sector -- including once thriving energy and utilities -- seeing declines of about 20 percent or more. Such losses in the last year have wiped out an estimated $2 trillion in equity value from 401(k) and individual retirement accounts, nearly half the holdings in those plans, according to new findings by the Center for Retirement Research at Boston College. Similar losses are seen in the portfolios of private and public pension plans, which have lost $1.9 trillion, the researchers found. As stocks have plunged, so have the value of chief executives' equity stakes in their own companies. The average year-to-date decline is 49 percent for the corporate stock holdings of CEOs at 175 large US companies, according to new research by compensation consulting firm Steven Hall & Partners. Topping that list is Buffett, who has seen the value of equity in his company, Berkshire Hathaway, fall by about $13.6 billion, or 22 percent, so far this year, to leave his holdings valued at $48.1 billion. Oracle founder and CEO Larry Ellison has seen his equity stake fall by $6.2 billion, or about 24 percent, to $20.1 billion, according to the research that ran from the start of the year through the close of trading Oct. 29. Rounding out the top five in that study were Microsoft's Steve Ballmer, whose company equity fell by $5.1 billion to $9.4 billion; Amazon.com's Jeff Bezos, whose equity fell by $3.6 billion to $5.7 billion; and News Corp.'s Rupert Murdoch, with a $4 billion contraction to $3 billion. News Corp. and Microsoft declined comment, while representatives from Berkshire Hathaway, Oracle and Amazon.com didn't respond to requests for comment. Those results included the value of the CEOs' stock, exercisable and non-exercisable stock options and shares that haven't yet vested. They are drawn from each company's most recent proxy statement, which means they might not include subsequent stock purchases or sales. "Everyone wants to see executives have skin in the game, and this shows they certainly do," said Steven Hall, a founder and managing director of the compensation consulting firm. "But in the end, we have to remember they still have billions to fall back on." But there have been recent instances where executives' large equity positions have blown up -- not only damaging a particular CEO's portfolio but the company's shareholders, too. |
