Abstract:Using the data of Shanghai and Shenzhen A-share listed companies from 2012 to 2020 as samples, this paper empirically examines the relationship between innovation-driven development and labor income share of enterprises, and the moderating effect of executive equity incentives and employee shareholding on the above relationship. The study found that the promotion of innovation-driven development by enterprises can effectively increase the labor income share of enterprises; The implementation of executive equity incentives and employee stock ownership plans can significantly enhance the above relationship. Further research found that profitability played a part in mediating the effect, and that the upward relationship was more significant when firms were in growth and decline periods, in more market-oriented regions, and in non-state enterprises. The study concludes that enterprises, especially those in growth and decline periods, regions with a higher degree of marketisation, and non-state-owned enterprises, vigorously promote innovation-driven development, and supplement it with executive equity incentives and employee stock ownership plans, which can increase the labour income share of enterprises, achieve harmonious development and the goal of common prosperity.