Investors get stung twice by lavish pay at the top

New York

IT'S a frustrating fact of life for many mutual fund investors: Even if they are distressed by outsize executive compensation at public companies whose shares they indirectly own, chances are good that the votes cast by their investment managers actually encourage delusional pay.

In recent years, as executive pay has climbed, fund managers have continued voicing their approval for stratospheric compensation packages. The failure by these fiduciaries to use their power to rein in pay has led some critics to contend that the managers aren't viewing the packages in the context of what they cost company shareholders.