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Net Net: Promoting innovation and managing change

'Mediocre' Gross overpaid at $200 million: Trustee

Bill Gross, chief investment officer of Pacific Investment Management Co. (Pimco).
Andrew Harrer | Bloomberg | Getty Images

Life just isn't getting any easier for Bill Gross.

Not so long ago known as the untouchable Bond King of the investment world, the Pimco founder now finds himself the subject of intense scrutiny, the most recent being over the enormous salary he receives to run the Newport Beach, Calif.-based firm.

Pimco trustee William J. Popejoy believes Gross' reported $200 million annual salary is out of line.

"I think his salary needs to be reviewed," Popejoy told "I'm not suggesting he be replaced."

(Read more: Big investors warily eye Pimco after internal strife)

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Bill Gross 'the secret sauce' of Pimco: Analyst

A more workable number, according to the thinking from Popejoy, who has been a Pimco trustee for 23 years, would look more like the reported $20 million a year Larry Fink gets to run investment giant BlackRock, which at $3.8 trillion manages twice the assets of Pimco.

Gross' salary, reported in 2012 by The New York Times, "seems to be out of line, way out of line," Popejoy said.

The comments come at an awkward time for Pimco, which manages about $1.9 trillion for clients and runs the largest bond fund in the world—the Total Return Fund, which has $236.5 billion under management.

A recent unflattering Wall Street Journal profile painted a picture of dysfunction at the firm, recalling battles between Gross and former co-CEO Mohamed El-Erian and showing Gross as a controlling, dominating presence who was prone to impose draconian office conditions.

More recently, Reuters reported that several key institutional investors have put Pimco on a "watch list" of firms that could be heading for trouble.

"As far as behavior, dressing down people, including Mohamed, in front of a group of executives—that is not the kind of behavior that works in a corporate situation," said Popejoy, who said Gross may be a "genius" who needs to rein in his behavior.

"Most geniuses have idiosyncrasies, but that doesn't mean he's the only person at Pimco," he said. "They have hundreds of very able people that help with their management of funds."

Popejoy's criticisms were first reported in the Los Angeles Times, in which he called Gross "mediocre" and rebuffed a quote, reported in the Journal piece, in which Gross compared himself to horse racing legend Secretariat.

"You could hire 2,000 schoolteachers for that money," Popejoy told the newspaper in a story published Tuesday. "I don't know what Bill should be paid, but $200 million is not appropriate."

(Read more: Tell-all on Pimco was 'overblown,' Gross says)

"I don't know if Secretariat made $200 million a year," he added.

For the firm's part, it insists that conditions are business as usual. Pimco tweeted Tuesday:

Pimco tweet

Go here for the full Times story.

—By CNBC's Jeff Cox. Follow him on Twitter @JeffCoxCNBCcom.