Empirical Research on Equity Incentives for Executives of Different Industries and Dividend Policy

This article selected panel data of Chinese listed companies from 2009 to 2013, and carried out empirical research on interaction between equity incentives for executives of Chinese listed companies in different industries and their cash dividend policy. We reached the following conclusions: the correlation between equity incentives and cash dividend policy is prevalent in all companies, but whether it is positive or negative varies in different industries; the tendency and degree of equity incentives of each industry have the same impact on dividend payout ratio. Through further research we also concluded that the impact from equity incentives on cash dividends will be weakened if the management is over empowered; for Chinese listed companies, the dividend policy is significantly affected by equity incentives when the management has little power, and the direction of effect varies in different industries. The conclusions of this paper provide experience and evidence for improvement of incentives and dividend policies in Chinese listed companies.