Ordering Top Pay: Interpreting the Signals*

abstract Boardroom reward continues to attract controversy, despite the structural changes in corporate governance arrangements over the past decade. This study responds to Pettigrew's (1992 ) call to eschew over‐ambitious attempts to demonstrate causality in the area of executive management and firm performance, in favour of redressing the overwhelmingly prescriptive bias in the literature. A simple but important task is to ‘begin to provide some basic descriptive findings about boards and their directors’, and open up ‘the black box of board behaviour’– in this case, that of board remuneration committees. Interpretations of comparative market signals play a part in deliberations between the leading actors responsible for determining executive directors’ salary, bonuses and other emoluments. But the position is more deeply textured than the reified influence of (global) market forces sometimes implied in the normative literature. The study reported, based on qualitative interviews, taps in to the nuances of decision taking in respect of boardroom reward management, including remuneration committee members’ reactions to corporate governance reforms. Such initiatives locate non‐executive directors in the role of intermediaries in the principal‐agent relationship, explicitly assigned to resolve the conflict of interest inherent in boardroom remuneration systems, while simultaneously they are expected to play a team role as board members responsible for the overall strategy and operation of the company. The study is indicative: an attempt to open up research questions around the context and process of boardroom reward management that earlier analyses may have ignored or overlooked.