This exploratory paper examines the relationship between the remunerat
ion of the highest paid director and company performance in the privat
ized utilities. Four conclusions regarding the structure of top direct
ors' pay emerge from the analysis. First, the salary plus bonus remune
ration of top directors in the privatized utilities has increased by 1
2 per cent per annum since 1990. Second, average employee pay in these
utilities has grown by about 3.1 per cent per annum over the same per
iod. This suggests that top pay growth in the privatized utilities has
outstripped that of the average worker since 1990. Third, the analysi
s cannot isolate a robust statistical relationship between directors'
compensation and measures of pre-dated company performance. Finally, d
irectors' share option dealings can sometimes considerably inflate the
ir overall compensation. Taken together, these findings implicitly que
stion the current efficacy of remuneration committees for determining
boardroom pay in the privatized utilities. One solution, which may ena
ble shareholders more accurately to assess executive performance, is f
or complete disclosure of all components of directors' pay in the comp
any accounts.