Geraldine Fabrikant had an interesting piece on The New York Times last evening, featuring Bill Gross and Mohamed El-Erian, PIMCO’s co-chief investment officers.
One interesting part of the Fabrikant ‘s report was El-Erian‘s $100 million paycheck, as well as the paycheck of founder Bill Gross.
From the NYT:
Indeed, even by the standards of Wall Street, where many financial types pull down eye-popping paychecks, Mr. El-Erian and Mr. Gross make gobs of money. Mr. El-Erian, 53, was paid about $100 million last year, according to a person with knowledge of Pimco’s finances who spoke on condition of anonymity because the firm, a unit of Allianz, the big German financial company, doesn’t disclose compensation.
To put that in perspective, Jamie Dimon, the chief executive of JPMorgan Chase and one of the most powerful figures in American finance, got a quarter of that. Mr. Gross, 68, made about $200 million last year, according to the person with knowledge of Pimco’s finances. (As for how much he and Mr. El-Erian are paid, Mr. Gross, in a joint interview with Mr. El-Erian, said only this: “We all earn too much, but I can sleep because of the multiples we have provided for our clients over the years.”)
In 2011, PIMCO’s flagship Total Return Fund delivered a return of only 4.2%, well below the 7.8% return for the benchmark Barclays U.S. Aggregate Bond Index, which is a market cap-weighted index. The fund managed by Gross posted a $5 billion net redemption after securing a net inflow of nearly $39 billion, likely a direct result of Gross’s bad calls in the T-bond market in the early part of last year.
It’s worth noting that since inception more than 20 years ago, the PIMCO Total Return Fund has delivered average annual returns of about 8.35%.