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What does it take to make someone quit a $100 million a year job?
The Wall Street Journal‘s Greg Zuckerman and Kirsten Grind tell us in a devastating page-one story on one of the most powerful people in finance, the bond king Bill Gross—a press favorite.
We learn conclusively that Mohamed El-Erian, who resigned as PIMCO’s CEO last month, did not quit to spend time with his family, as “people close to PIMCO” told the Journal at the time, and we get a positively evil-looking picture of Gross atop the story. Felix Salmon puts it best in declaring (surely prematurely) the story fatal for Gross: “a gruesome photograph of the 69-year-old money manager, looking sideways through yellowing eyes as he reaches out like something from a zombie movie. And it just gets worse from there…”
You don’t get to the top of finance by being polite, but the Journal reports that Gross rules his $1.9 trillion empire, um, imperiously. If you work at PIMCO, you don’t make eye contact with Gross or speak to him, just as if you were an opening band backstage with Bob Dylan.
In fact, you don’t speak much at all:
On the trading floor, Mr. Gross doesn’t like employees speaking with him or making eye contact, especially in the morning, current and former employees say. He prefers silence and at times reprimands those who break it, even if they’re discussing investments, these people say.
When Mr. Gross establishes an investment thesis, he usually doesn’t appreciate dissenting views, employees and former Pimco traders say…
Late last year, in front of a number of traders, Mr. Gross said, “if only Mohamed would let me, I could run all the $2 trillion myself…I’m Secretariat,” referring to the famed thoroughbred. “Why would you bet on anyone other than Secretariat?”
The Journal never quotes El-Erian directly, but it also never says that he declined comment. Hmm.
Much of the trading-floor culture stuff was reported by Matt Phillips of Quartz in a great piece last month.
“It’s kind of medieval. You only speak when spoken to,” the same trader said.
All communications about trade ideas for Gross are submitted according to his protocol. The trades are printed out, with charts, yields and prices. They’re handed to Gross’s assistant. She takes the recommendations and walks a few feet to put them in Gross’s in-tray, on his desk. Traders aren’t supposed to put the recommendations in the in-tray directly…
As one story goes, confirmed by separate sources, Gross once sent a corporate bond trader home in the midst of the trading day with instructions to hand-write 1,000 times that he would not submit trade recommendations without charts.
How can we resist?
But while Quartz’s piece did much of the spadework, the Journal takes it to another level by connecting the cultural craziness directly to El-Erian’s departure and by giving the story the page-one treatment.
Page one of the WSJ still means a lot, even if it’s not what it once was. Excellent work by both the Journal and Quartz.
Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR’s business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum.