Based on dynamic trade-off theory and A-share listed companies from 1999 to 2014, this paper uses mixed ownership structure reform as natural experiment condition to study the effect of equity incentives of executives on defensive behavior in their financing decision-making and isolate the dual effects, namely incentive effect and governance effect. It arrives at the conclusions as follows: firstly, equity incentives help to inhibit defensive behavior in executives' financing decision-making, but this effect only exists in private enterprises; secondly, a similar effect is observed in SOEs only after non-tradable shares reform, and before non-tradable shares reform, executives unidirectionally reduce debt financing while they increase the level of equity incentives, showing obvious autoexcitation problem; thirdly, companies with higher-degree mixed equity are more cautious about granting equity incentives to executives, but in companies with higher proportion of state-owned shares, mixed ownership structure reform obviously increases the level of equity incentives; fourthly, mixed ownership structure significantly improves the efficiency of inhibiting executives' defensive behavior by equity incentive contracts, and this effect is stronger in companies with higher proportion of non-state-owned shares.