From the May 2009 issue of Boomer Market Advisor • Subscribe!

We've seen the enemy, and he is...

We understand that excessive executive compensation as a "cause" of the current crisis is more hype than help. Still, it's hard not to get a little peeved. But according to The Financial Times, we should really be mad at ourselves.

The paper reports mutual funds have contributed to corporate America's excessive pay by voting in favor of companies' compensation plans, research by corporate governance experts revealed.

"AllianceBernstein, Barclays Global Investors, Ameriprise and Bank of America's Columbia Management were the most consistent backers of management proposals to increase executive pay, according to the study."

The paper reports that the Corporate Library and the American Federation of State, County and Municipal Employees, one of the largest US trade unions (OK, so they have a serious dog in the hunt), analyzed mutual funds' votes in 2008 annual shareholder proposals.

Some mutual fund companies acted as "pay constrainers," consistently voting against pay rises. T. Rowe Price, Templeton (part of Franklin Resources) and Charles Schwab were at the top of the rankings of those voting to constrain pay, the study found.

Other companies have changed course. Oppenheimer was a "pay enabler" in 2005 but qualified as a "constrainer" in 2008.

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