What is ‘Camouflage Compensation’
Compensation that is granted to upper echelon employees, directors, consultants and related parties that is not fully disclosed in mandatory company filings. In some cases of camouflage compensation, the compensation is fully disclosed, but in such a way that it is very difficult for the average investor to decipher the true value of gross pay compensation.
Explaining ‘Camouflage Compensation’
Non-qualified deferred compensation plans, SERPs, stock options, stock appreciation rights and share grants are all potential places where compensation can be hidden from analysts and shareholders. The SEC has proposed new regulations to more completely disclose the full cost of compensation to related parties, consultants, directors and employees.
Further Reading
- Executive compensation at Fannie Mae: A case study of perverse incentives, nonperformance pay, and camouflage – heinonline.org [PDF]
- Stealth compensation via retirement benefits – www.nber.org [PDF]
- … compensation versus managerial power: A review of Lucian Bebchuk and Jesse Fried's pay without performance: The unfulfilled promise of executive compensation – www.aeaweb.org [PDF]
- Managerial Power, Camouflage, and Executive Compensation: An Empirical Study on Listed Companies in China [J] – en.cnki.com.cn [PDF]
- How powerful CFOs camouflage and exploit equity-based incentive compensation – link.springer.com [PDF]
- Board reputation, CEO pay, camouflaged compensation – e-archivo.uc3m.es [PDF]
- Managerial Power and Compensation——Research from the Perspective of Camouflage [J] – en.cnki.com.cn [PDF]
- Comprehensive disclosure of compensation and firm value: The case of policy reforms in an emerging market – onlinelibrary.wiley.com [PDF]
- Effect of Sarbanes-Oxley Act on the influencing of executive compensation – papers.ssrn.com [PDF]
