Dynamic SQL (EXECUTE) as condition for IF statement

This construct is not possible:

IF EXECUTE 'EXISTS (SELECT 1 FROM mytable)' THEN ...

You can simplify to:

IF EXISTS (SELECT 1 FROM mytable) THEN ...

But your example is probably simplified. For dynamic SQL executed with EXECUTE, read the manual here. You can check the special variable FOUND immediately after executing any DML command to see whether any rows here affected:

IF FOUND THEN ...

However:

Note in particular that EXECUTE changes the output of GET DIAGNOSTICS, but does not change FOUND.

Bold emphasis mine. For a plain EXECUTE do this instead:

...
DECLARE
   i int;
BEGIN
   EXECUTE 'SELECT 1 FROM mytable';  -- something dynamic here

   GET DIAGNOSTICS i = ROW_COUNT;

   IF i > 0 THEN ...

Or if opportune – in particular with only single-row results – use the INTO clause with EXECUTE to get a result from the dynamic query directly. I quote the manual here:

If a row or variable list is provided, it must exactly match the
structure of the query’s results (when a record variable is used, it
will configure itself to match the result structure automatically). If
multiple rows are returned, only the first will be assigned to the
INTO variable. If no rows are returned, NULL is assigned to the INTO
variable(s).

...
DECLARE
   _var1 int;  -- init value is NULL unless instructed otherwise
BEGIN

EXECUTE format('SELECT var1 FROM %I WHERE x=y LIMIT 1', 'my_Table')
INTO    _var1;

IF _var1 IS NOT NULL THEN ...

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