A just-released study by executive compensation consultancy Steven Hall & Partners sums up the damage. For CEOs who head 175 of the top 200 corporations in the Fortune 500, the median value of the equity held in their own businesses dropped 50% last year. This decline is far worse than the 37% median drop for the stocks of those companies.

What accounts for the relatively dreadful performance of the CEOs’ own holdings? Options. They tend to be tremendous wealth accumulators in good times. But when a stock price falls below an option’s exercise price, the intrinsic value of the option goes to zero. And in this sinking stock market, that has happened a lot. Those underwater options create a more dramatic drop-off in CEO equity values than you’d expect from just looking at a company’s stock price.

So that whopping $54 billion, actually, is the total amount that the CEOs’ equity value–including shares owned outright, exercisable and unexercisable option gains, and unvested restricted and performance shares–dropped in 2008. As for the decline in the median value of those CEOs’ holdings, it went from $60.9 million to $29.5 million.

Steve Hall, managing director of Steven Hall & Partners, notes that equity compensation has long been viewed as the most direct approach to link executives’ interests with their shareholders’–and, he says, “The study confirms this total alignment.” Indeed, among the chief executives with huge declines in their own stock holdings: General Motors’ Rick Wagoner ($24.3 million), Citigroup’s (C) Vikram Pandit ($29.2 million), and General Electric’s Jeff Immelt ($114.7 million.) Even the CEOs of Exxon Mobil and IBM , which outperformed the S&P last year, suffered declines of more than $25 million in the value of their holdings.

The CEO at the very top of the Fortune 500–Lee Scott of Wal-Mart –actually scored a gain: The value of his Wal-Mart holdings went up $30.9 million to $202.6 million. Wal-Mart stock rose 10% last year.