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File photo of Michael Pearson, chairman of the board and chief executive officer of Valeant Pharmaceuticals.

CHRISTINNE MUSCHI/Reuters

Did you read the story we wrote two weeks ago that said Valeant Pharmaceuticals Inc. CEO Michael Pearson was worth more than $600-million (U.S.)? We need to update that.

Tuesday's bloodbath in Valeant shares – the stock lost 50 per cent of its value as it reduced sales guidance and warned of the possibility it could default on its borrowings – shaved hundreds of millions of dollars from chief executive officer Michael Pearson's net worth, The Globe and Mail estimates. At Tuesday's close of $33.51 (U.S.), we estimate Mr. Pearson's shares to be worth around $325-million. When we first calculated his worth, just days before the stock's all-time high in July, 2015, we figured his Valeant holdings were approaching $3-billion.

Mr. Pearson, who resides in New Jersey, has been compensated over the years in Valeant's U.S.-based shares through a combination of stock options, restricted shares and a performance-unit program that has yielded millions of shares of stock over the years. In its 2015 proxy statement to shareholders, Valeant explained that its compensation philosophy "is to align management's pay with long-term [total shareholder return] … We richly reward for outstanding TSR performance, but pay significantly less for below-average TSR performance."

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For years, Valeant was a leading light of the Toronto Stock Exchange, briefly becoming Canada's most-valuable public company, and Mr. Pearson's wealth followed. And while the former McKinsey & Co. management consultant remains rich – not that many CEOs have been able to accumulate more than $300-million after less than a decade on the job – it's hard to see him returning to billionaire status in the near term.

Mr. Pearson owns about 1.5 million Valeant shares and has placed 1.2 million shares in a trust that he says he does not benefit from. (We have included them in the $325-million total.)

His unused stock options, worth roughly $1.2-billion last summer, now offer about $115-million in potential profits, down from $265-million just two weeks ago. (While 500,000 options that Valeant gave Mr. Pearson in 2011 are now unusable at current market prices, he also has almost three million options with an exercise price of just $4.20 apiece, offering just under $90-million in profits.)

Mr. Pearson also has several million shares of stock that have "vested," but have not been delivered to him, under Valeant's complicated performance-share program. (Valeant's performance-share units can turn into multiple shares of common stock if Valeant hits certain thresholds for annual returns, which the stock blew by for most of its history.)

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