Yet another reason Pimco employees resent Bill Gross
Bill Gross admittedly had a habit of rubbing some of his employees the wrong way when he was running Pimco. Whether it was discouraging eye contact and verbal communication, sending employees home to hand-write 1,000 times that they won’t again submit trade recommendations without charts, or publicly scolding them for not putting page numbers on presentations, they had reasons. Now they have one more, even though Gross is no longer working at Pimco.
Fox Business reported that Pimco employees could lose out on tens of millions of dollars in compensation due to asset redemptions that followed Gross’s departure. Pay cuts were certainly anticipated but not in the neighborhood of the $100 million number that was mentioned in the report.
The issue is related to the unique nature of Pimco’s compensation structure. Some executives receive as much as half of their annual pay in options tied to total assets under management, which have dropped precipitously though the hemorrhaging has slowed recently. Those options expired in January, “making them virtually worthless,” Fox reported.
Some within the firm are reportedly frustrated with the compensation plan, wishing instead that the options were tied to Pimco’s parent, Allianz, rather than a bond fund that could experience such an epic swing in assets.
But it’s not all bad at Pimco. One, eye contact is now openly welcomed, which is nice. Plus, the firm announced in November that it would hand out $279 million in payments to employees working below the managing director level who don’t participate in Pimco’s profit pool, so there’s that.
It appears those who will suffer most will be high-ranking employees who’ve been there a while. But Pimco is also bringing in a lot of new blood, so the number of those folks has likely dwindled.
Getting your foot in the door at Goldman Sachs typically requires a blue-chip pedigree just for starters. You certainly can’t be unemployed and degree-less. Or maybe you can.
Last week we reported upon a rumor alleging that J.P. Morgan had asked some of its staff to tone down their profiles on LinkedIn. It appears true, and more aggressive than we first thought.
All 31 of the nation’s largest banks (including Citi!) passed the Federal Reserve’s first stress test. Citi Chief Executive Michael Corbat can take a deep breath, though the results of the second test that determine whether banks can issue dividends or move forward with buyback plans don’t come out until March 11.
Nicholas O’Grady was fired by BlueCrest Capital Management last year after allegedly sharing information about a stock trade with an employee at Steven Cohen’s family office, Point72 Asset Management. O’Grady, who used to work at SAC Capital Advisors, the predecessor to Point72, is suing BlueCrest in an effort to recoup an unpaid bonus.
Goldman Sachs Chief Executive Lloyd Blankfein is reportedly upset with executives over publicizing their support for potential Republican presidential nominee Jeb Bush. “He doesn’t want to see it highlighted in the press,” an insider told Fox Business.
Two former financial adviser trainees at Merrill Lynch are suing the firm for allegedly not paying them overtime, despite the fact that they worked long nights and weekends. They are looking to represent more than 100 trainees.
Fortune just announced its annual list of the best companies to work for. Goldman was the only major bank to make the list, finishing 50th, while an insurance company in Sheboygan, Wisconsin came in third.
Buzz Around the Office
Here’s a really easy way to get busted for insurance fraud. Buy an auto policy over the phone at the scene of an accident then report the collision hours later.
Quote of the Day: “They need to do something radical because their strategy doesn’t seem to have convinced regulators or investors,” – an analyst talking about Deutsche Bank’s fate