Even by Wall Street standards, “Bond King” Bill Gross may have made an absurd amount of money last year. According to Bloomberg View’s Barry Ritholtz, Gross, who co-founded the asset management firm Pimco, made a whopping $290 million as his end-of-year bonus in 2013. Gross’ deputy and Pimco chief executive at the time, Mohamed El-Erian, is thought to have made $230 million.
Ritholtz cites “documents provided to Bloomberg View by someone with knowledge of Pimco’s bonus policies” in his column. He claims the $290 million figures amounted to 20 percent of Pimco’s total bonus pool for 2013, and that Gross “made just shy of what the next 20 publicly held finance company CEOs made combined.”
While there’s no good listing of the biggest finance bonuses ever, $290 million would put Gross in an almost unheard-of class. Laurence Fink, the chief executive of BlackRock, the largest asset management firm in the world, took home $22.9 million in compensation in 2013. Wall Street handed out $26.7 billion in bonuses in 2013, the most since the financial crisis and the third-highest year on record. One of the few bonuses reported to be greater than Gross’ in the past several years was a $300 million package that Fortress Investments gave to keep trader Adam Levinson at their firm in 2008. (“I’m worth it,” Levinson supposedly said of this monstrous sum.)
So far, Pimco is denying Ritholtz’s numbers. “While Pimco does not comment on compensation, the figures provided to Bloomberg are not correct,” Dan Tarman, a spokesman for the company, told Bloomberg News. “For more than three decades, Pimco’s managing directors have maintained a substantial interest in the firm, currently 30 percent of profits, and this provides an important means to attract and retain the best investment talent to serve our clients.”
With Pimco refuting Bloomberg’s reporting and the publication standing by it, there’s no real way of knowing who’s right. Bloomberg does note, pointedly, that Tarman declined to “specify the firm’s objections.” In other words, we can’t know if Pimco is objecting because these figures are way too high or because they’re slightly off target. But the numbers Ritholtz gives on other finance chief executives’$2 2013 compensation are also a bit tough to square. For example, he lists Goldman Sachs CEO Lloyd Blankfein as earning $19.9 million in compensation (Ritholtz’s term) with no further details. But Bloomberg reported in January that Blankfein had made $21 million in bonus alone for total 2013 compensation of $23 million.
Gross left Pimco in late September to take a position at Janus Capital Management. He was reportedly on the brink of being pushed out for controversial management practices and erratic behavior. He’s also suspected to have taken a large paycut to join Janus. At any rate, the fact is that Gross, once a wunderkind of the bond market, just hasn’t produced the same stunning returns in the last few years. When he departed Pimco, the Total Return fund was lagging its benchmark. And in 2013—the year Gross supposedly got this huge bonus for—Pimco suffered a record $41.1 billion outflow after a bad bet on U.S. treasuries led to the fund’s worst yearly performance in nearly 20 years.
So: Was Gross paid a $290 million bonus in 2013? It’s hard to know. But based on his fund’s performance, did he really earn that much? Probably not.
