Executive Heterogeneity, Executive Power and Selection of Equity Incentive Mode: Empirical Evidence from Chinese Listed Companies

How to choose the equity incentive mode scientifically and rationally has always been an significant research issue. This study takes the Chinese listed companies that implemented stock option and restricted stock incentive schemes from January 1, 2006 to December 31, 2019 as the sample, and studies the effect of executive heterogeneity on the choice of equity incentive mode, and further reveals the moderating effect of executive power. The results show that the heterogeneity of the incentivized executive, such as age, tenure and educational background, significantly affects the choice of the equity incentive mode of company. For executive with age, long tenure and high academic qualification, the enterprise is more inclined to grant restricted stock; The larger the proportion of male executive, the more the company prefers giving the stock option, but the impact of executive gender is not significant. Executive power has a significant negative moderating effect on the influence of executive heterogeneity on the choice of equity incentive mode of Chinese listed companies, that is, the greater the executive power, the less the influence of executive heterogeneity on the choice of equity incentive mode. After robustness test, the conclusion of the study is still valid. The conclusions of this paper provide a reference for listed enterprises to choose the equity incentive mode effectively.