Alabama Inc.

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Bronner's in-state investments may serve the state's economic development, but they "risk violating a core principle of his job — diversification," says Randall Eberts, executive director of the W.E. Upjohn Institute for Employment Research in Kalamazoo, Mich. "His projects are impressive, but they risk reducing the rate of returns he could be achieving." For the past decade, RSA's flagship $14 billion teachers' fund gained a respectable (if middling) 7.2% a year on average, compared with a median of 7.9% for public pension plans as tracked by the investment consulting firm Callan Associates. The teachers' fund outperformed its peers in the past three years and five years, and overall, RSA's 19-fund portfolio has been less volatile than most pension portfolios. While Bronner didn't earn the overall market's lavish returns during the 1990s tech boom, he hasn't lost as much since then either. Alabamians — especially those who remember RSA's volatile, pre-Bronner returns — seem to value such middle-of-the-road dependability even if the means to achieving it are unorthodox.

Some critics, such as former state finance director James White, argue that Bronner enjoys unusual authority and that RSA's boards of directors (one for the teachers' fund and another for the general employee fund), which together constitute the only body that could remove him, have become "rubber stamps" for his maverick ways. Bronner, who earns $308,000 a year (compared with $96,361 for the Governor), calls that charge "nonsense," but can't cite an instance in which either board reined in any of his investment plans. He says that he intends to give his $40,000 board fee from US Airways to a relief fund for airline employees.

For all the controversy over RSA's investment in US Airways, Bronner is already looking beyond that deal. During a recent Alabama trade mission to Cuba (where he got his Cohibas), Bronner, a golf enthusiast, couldn't help but notice the investment potential, exclaiming: "They've only got 27 holes in the whole country!"

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