This study documents the danger of limiting the coverage of mandatory pay disclosure. Exploiting the 2013 rule change in Korea, we find that its restrictive coverage, confined to board members with total annual pay exceeding 500 million Korean won, led a large fraction of executives to evade disclosure through deregistration (i.e., stepping down from the board) or pay-cuts. We also find that suchevasion is mostly carriedout by family executives in firms with highexecutive-to-workerpay ratios. If the original pay level is close to the threshold, we find that family executives choosepay-cuts over deregistration, as theirpreferred means of evasion. 

JEL classification: G32, G34, G38, J3, M48
Keywords: executive compensation, disclosure evasion, family executives, executive-to-worker pay ratio​