Compensation for money managers is typically tied to the amounts they oversee and the returns they produce. Gross and El- Erian together were responsible for the firm's almost $2 trillion in assets as co-CIOs in 2013. Gross's main fund, Pimco Total Return, trailed 65 percent of peers in 2013, after beating 90 percent of peers in 2012, according to data compiled by Bloomberg.
Gross, who now works for Janus Capital Group Inc., and El- Erian didn't respond to phone calls seeking comment. Steven Shapiro, a spokesman for Denver-based Janus with Communications Strategy Group, declined to comment.
"Allianz is fully aware of the profit sharing plan at Pimco," said Petra Brandes, a spokeswoman for Munich-based Allianz. "This element of partnership has always been in place and has been a basis of success at Pimco. It was an integral part of the acquisition of Pimco by Allianz in 2000 and resulted in a reduction of the purchase price paid. The payments under this partnership structure are not comparable to common forms of variable compensation payments."
Daniel Ivascyn, Pimco's new group chief investment officer, appointed after Gross' surprise departure on Sept. 26, made a bonus of about $70 million last year, the documents show. Ivascyn, 45, runs the $39.3 billion Pimco Income Fund, which beat 99 percent of peers last year, returning 4.8 percent, according to data compiled by Bloomberg.
Wendy Cupps, the head of product management, received a bonus of about $50 million, the documents show. Douglas Hodge, 57, who was chief operating officer until he took over as CEO in January, received a bonus of about $45 million, and the firm's President Jay Jacobs was given about $22 million.
The bonuses at Pimco rival compensation at top hedge funds and private equity funds, which are typically smaller but charge higher fees. Black, whose Apollo Global Management oversaw $161 billion at the end of last year, got about $369 million in distributions from his stock ownership of the company. Schwarzman, whose Blackstone Group managed $266 billion at the end of last year, received $374.5 million in pay and cash dividends.
Gross' reward accounted for 20 percent of the firm's total bonus pool, according to the documents. His Pimco Total Return more than doubled in size from 2008 to its peak of $293 billion in April 2013, when it was world's biggest mutual fund.
The fund then stumbled when the Federal Reserve hinted it would unwind stimulus measures, sparking investor redemptions. By October, Pimco Total Return had ceded the title of biggest mutual fund to an offering from Vanguard Group Inc. After 18 straight months of client redemptions, it's been reduced to $170.9 billion in assets as of Oct. 31, according to Pimco.
Amid the redemptions, Gross, who co-founded the company in 1971, clashed with management over how to run the firm, leading to the resignation of El-Erian, people familiar with the matter have said.
El-Erian is now chief economic adviser at Allianz and a contributor to Bloomberg View.
Gross departed from Pimco after deputies including Ivascyn threatened to quit and management debated his ouster, according to people familiar with the matter. He now runs the $443 million Janus Global Unconstrained Bond Fund.
Investors pulled $51 billion in September and October from the Total Return fund, which is now run by CIOs Mark Kiesel, Scott Mather, and Mihir Worah.
Pimco introduced a 225 million-euro award program to retain top talent. The plan applies to ''all employees that are not participating in the Pimco profit pool," including senior portfolio managers below the level of managing director, Allianz Chief Financial Officer Dieter Wemmer said on a conference call Nov. 7.
The "Special Performance Award" comes on top of bonus and salary policies already in place, and consists of a cash award to be granted in the fourth quarter and paid over the next 12 to 30 months, Allianz said in its quarterly report. The bonus is expected to cost an average of 33 million euros before taxes for each of the next five quarters and 10 million euros each for the remaining six quarters, the Munich-based insurer said.
Since Gross left, Pimco has hired back old members of the investment committee including Marc Seidner, who exited in the wake of El-Erian's departure. Pimco hasn't lost any portfolio managers since Gross, according to Wemmer.
Operating profit at Pimco declined 7.9 percent to 594 million euros in the third quarter from a year ago, Allianz said in a presentation of its earnings. It said variable personnel expenses, which are tied to profit, fell 8 percent. Overall, Pimco reduced expenses by 4 percent in the three months through September.
-Bloomberg
