Pimco Shadow Equity Ends as Cash Replaces Worthless Options
- Options to buy M shares were pegged to profit-growth targets
- Value has fallen by about half since 2013 amid record outflows
Pimco Flashes the Cash in Effort to Retain Top Talent
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Pacific Investment Management Co., beset by fund outflows and management turmoil, swapped out the part of its compensation plan that hinged on earnings growth in favor of a more stable cash incentive.
The company, which manages about $1.5 trillion in assets, stopped giving top managers new options to buy M shares, equity in the firm that fluctuates with profitability, according to a U.S. Securities and Exchange Commission filing last month. The shares, also known as shadow equity, had been a key component of pay since 2008. In their place, high-ranking executives will get long-term compensation in cash paid over three years.