Abstract— MTN45 LCOS was studied experimentally and by simulation. Optimized retardance and orientation of the compensation retarder were found by simulation and verified by experimental data for both wire‐grid PBS and McNeil‐type PBS systems. The parasitic reflectance from the counter‐electrode (CE) glass and the retarder surface are two major effects that decrease the contrast of LCOS panels. Their effect was simulated by inserting several imaginary optical layers into the real system. Results also show that decreasing the retardance of the retarder; thus increasing the maximum driving voltage for the dark state can increase contrast. By combining all the improvements, we can achieve a contrast of 1500:1 in green and a contrast of 1000:1 in blue for MTN45 LCOS panels.