By the methods of OLS and Propensity Score Match (PSM), the effect of equity incentive on corporation innovation is tested based on the data of 2337 China's listed companies from 2009 to 2013. The results of different types of OLS regressions show that innovation tradition, profitability and debt capacity are the main factors that influence corporate innovation. Equity incentive does not inspire innovation significantly no matter tested by OLS or PSM. After changing the matching principles, investigating year by year, industry by industry, by different sizes or by different ownership types, we still find that the equity incentive has no significant effect on innovation. Equity incentive among A-share listed companies turns out to be a kind of welfare arrangement, measures should be taken to improve equity incentive.