The accuracy of neural response recordings in neural stimulators, e.g., cochlear implants, is often degraded by a recording artifact. An idealized electrical-equivalent model of a neural stimulator is created to study, measure and compensate for artifact evoked compound action potential (eCAP). Using this model, the artifact is shown to occur even when the electrical components that make-up the neural stimulator are ideal. The model contains parasitic capacitances between the electrode wires. The model demonstrates that these small parasitic capacitances provide a current path during stimulation which can deposit charge on the electrode-tissue interfaces of the recording electrodes. The dissipation of this residual charge and the charge stored across the stimulating electrode is seen as the recording artifact. The proposed solution for eliminating the artifact problem is realized by utilizing a capacitive electrode material, e.g., TiO2, Ta2O5, or other dielectric coatings or films, instead of Faradaic electrode material, e.g., Platinum (Pt), Pt—Ir alloy or similar alloys, on the neural stimulator electrode lead.