Equity incentives and ESG performance: Evidence from China

Yongliang Zeng, Xiangfang Zhao and Yiwen Zhu

Finance Research Letters, 2023, vol. 58, issue PC

Abstract: Using Chinese A-share listed firms from 2006 to 2021, we investigate the impact of executive equity incentive plans (EEIPs) on corporate environmental, social, and governance (ESG) performance. We find that EEIPs positively affect ESG performance. We also find that options have a stronger incentive effect on ESG performance than restricted stock, and longer valid period and higher vesting targets can enhance the incentive effect of EEIPs on ESG performance. Moreover, the positive impact of EEIPs on ESG performance is stronger for non-SOEs and firms with better external governance.

Keywords: ESG performance; Executive equity incentive plans; Sustainable development (search for similar items in EconPapers)
JEL-codes: G30 M12 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pc:s1544612323009649

DOI: 10.1016/j.frl.2023.104592

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