This paper contributes to the literature on directors' remuneration by reporting the results of interview-based research carried out with executive and non executive directors at two listed UK utilities, and their advisors. The findings on how directors' pay is set reflect aspects of both economic and social- psychological theories. They show that the level and structure of remuneration were clearly influenced by the market, and highlight the problems of determining a suitable comparator market. Institutional theory influences were identified in the level and structure of the pay, and the way in which trends in practices influenced the protagonists. Furthermore, the way in which the companies' policies were tailored to their corporate strategies was consistent with contingency theory
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