Abstract: Equity incentives have important effect on the performance of listed firms.We investigated the effects of equity incentives on firm performance in Chinese listed firms.Results show that under the condition of controlling the deviation of sample choice,the performance of listed firms is positively related to the equity incentives,that the equity incentives of private firms can obviously reduce agency costs of shareholders and management institutions,that the option plans can effectively improve firm performance,but such effectiveness can only be observed in firms controlled by private major shareholders.Further,option plans are more effective than share plans.