This study investigates the determinants of compensation disclosure transparency in the context of the Securities and Exchange Commission (SEC) compensation regulation of 2006. Specifically, it focuses on incentive-related compensation disclosure required by Reg. S-K 402(b). I find that compensation disclosure transparency is negatively associated with managerial power and proprietary cost but is positively associated with external monitoring. These findings hold for both the pre- and postregulation periods. Furthermore, the effects from proprietary cost become weaker in the postregulation years, and stronger external monitoring tends to reduce the negative relations between compensation disclosure transparency and managerial power and proprietary cost. Finally, I document an inverted U-shape relation between excess CEO compensation and compensation disclosure transparency.
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