El-Erian can't respond to Pimco's Gross due to terms of departure: sources
(Reuters) - Mohamed El-Erian, former CEO of Pimco, has been unwilling to respond to criticism from the bond investment firm's chief investment officer Bill Gross because of a strict non-disclosure agreement he made with Pimco, according to two sources familiar with his thinking.
Pimco shocked investors in January when it announced that El-Erian was leaving the firm. He had been groomed to be successor to Gross, who is known as 'The Bond King' and who oversees nearly $2 trillion of assets.
Gross said this week that the departure came as a complete surprise and El-Erian still hasn't explained why. "He hasn't spoken up, and that's a mystery to us and quite frankly an extreme disappointment," Gross told Bloomberg TV in remarks broadcast on Thursday. "He simply said that he wasn't the man to take the company forward. And he constantly repeated that without explaining it."
"I thought I knew him better," added Gross, who turns 70 on Sunday.
The sources close to El-Erian said that it shouldn't be a mystery to Gross as to why El-Erian, who was also co-chief investment officer of Pimco until he left the firm in March, hadn't commented publicly on the reasons for his resignation.
If he breached the NDA, which ends in May, El-Erian could put any compensation package he received on his departure in jeopardy and potentially open him up to a lawsuit from Pimco, they said.
Gross insisted on the non-disclosure pact before El-Erian's departure, these sources added.
His comments about El-Erian's departure were the latest episode in a soap opera-style public falling-out between the two executives that has been playing out in the media in the past few weeks.
Newport Beach, California-based Pimco did not return phone and email messages seeking comment on whether it may be prepared to lift the NDA's provisions.
El-Erian declined to comment for this story. Gross could not be immediately reached for comment.
Gross, who had shared the title of co-chief investment officer with El-Erian, became the sole CIO after his partner's departure.
El-Erian retains a role at Allianz, the German insurer that owns Pimco, as its chief economic adviser. That is a part-time role.
(Reporting By Jennifer Ablan; Editing by Martin Howell)
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