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Does Managerial Stock‐Based Compensation Improve Chinese Manufacturing Firms' Carbon Performance? Regulating Preferences and Climate Risk Exposure

Author

Listed:
  • Shaoyu Li
  • Zihao Qu
  • Xian Wang
  • Chunhui Zhu

Abstract

This article explains the nexus between managerial stock‐based compensation and carbon performance by regulator environmental preference and climate risk exposure. Drawing from extensive datasets and variables by textual analysis, we find that the adoption and change of managerial stock‐based compensation have a positive effect on carbon emission intensity, and this effect is particularly pronounced among privately owned and higher‐emitting firms. The link between stock‐based compensation and carbon emission intensity is enhanced by CSR reporting but diminished by ESG reporting, catering to be aligned with regulatory preference. Climate risk exposure, particularly when monitored by managers, moderates the relationship between stock‐based compensation and carbon emission intensity.

Suggested Citation

  • Shaoyu Li & Zihao Qu & Xian Wang & Chunhui Zhu, 2025. "Does Managerial Stock‐Based Compensation Improve Chinese Manufacturing Firms' Carbon Performance? Regulating Preferences and Climate Risk Exposure," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 65(4), pages 3923-3945, December.
    • Handle: RePEc:bla:acctfi:v:65:y:2025:i:4:p:3923-3945
    DOI: 10.1111/acfi.70054
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    References listed on IDEAS

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