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Bonus Watch '15: Pimco Brass

Compensation for senior execs has taken a hit and it's (allegedly!) all Bill Gross's fault.
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When Bill Gross left Pimco last year for Janus, the employees he left behind lost a log of things, many of them of the variety you can't put a price on. They lost working for a guy who enforced a no talking or eye-contact rule. They lost living in fear they'd be issued a demerit for leaving of a "p.33" on a 300-slide presentation. They lost their proximity to an auteur who wrote letters on a variety of topics ranging from the evils of the automatic flushing toilet to erotic pleasure of a good sneeze, to stiffing waitresses, to the cellulite on his back, and the fact that it made him want to shoot himself. These are the things they lost to which no value can be assigned. Their presumed bonuses are another story:

The ouster last year of Gross, the mutual fund giant’s mercurial founder, caused investors to yank tens of billions of dollars out of the company, particularly the Total Return Fund, which Gross personally managed. The sharp decline in assets has not only squeezed profit at PIMCO, and its holding company, Allianz SE, but caused dozens of senior executives at PIMCO to lose out on an estimated tens of millions of dollars in compensation, people with direct knowledge of the matter tell FOX Business. Over the past three to five years, executives received as much as a third to half of their annual pay in a stock-option tied to assets under management. But with assets dropping sharply in the wake of Gross’s departure, those options expired in January, making them virtually worthless, these people say. People inside PIMCO suspect that as many as 200 executives at the company have lost money as a result of their options falling “out of the money," or in other words, losing any value. The exact total of lost compensation, according to one person, could “easily exceed $100 million.”

Bill Gross is Costing PIMCO Senior Execs a Lot of Money [FBN]


PIMCO, via Wikimedia Commons

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