Abstract: This paper selected 285 A-share listed companies which had implemented the equity incentive plan during 2007to2013，and tested the

impact of equity incentive on earnings management and company performance from the perspective of the non-linear relationship. Itwas found that the linear relationship which is positively correlated between equity incentive and corporate performance，but also the inverted U-shaped relationship between equity incentive and earnings management. However，a U-shaped relationship between equity incentive and real performance is corrected by the earnings management，and the turning point lies in the range of 4.2% to 4. 7%，which means that the effect of equity incentive on real performance is interval,and that the equity incentive improves the real performance only beyond this range. This research provides empirical evidence and theoretical reference for the determination of equity incentive levels for listed companies in our country.

Keywords: Equity Incentive Earnings Management Company Performance Property Nature