Abstract : 251 A-sharelistedcompanieswhichimplementedtheequityincentive plan during 2007 and 2013 wereselected , and acomprehensive framework wassetupby mean sof structural equation modeling ( SEM ) to analyze the direct and indirect effect sof equity incentive on company performance,and to examine the path way of equity incentive on the performance of listed companies.It was found that equityincentive can significantly improve company performance.87.56% of the effect of equity incentive on company performance is realized throug the direct acting path way, and the rest 12.44% is realized through the indirectacting pathway.The path way of agency cost accounts for 8.00% and the path way of earnings management accounts for4.44% , but the path way of investment efficiency does not have asignificant effect.

Keywords : equity incentive ; company performance ; structural equation modeling