Abstract: In this paper，by the research of the listed companies that proclaimed the stock option incentive scheme in 2010-2012 and implemented this scheme in China，we study the role of the stock option incentive scheme on the R&D expenditure behaviors. We find that during the base period，the relation of the R&D expenditure intensity and whether to implement the stock option incentive scheme is significantly positive，but during the waiting period，the relation of the change of the R&D expenditure intensity and whether to implement the stock option incentive scheme is significantly negative. Which indicates that the managers have a strong motivation to get greater economic benefits by making use of the R&D expenditure to manipulate earnings，and we also find that the managerial power of the managers exacerbates this manipulation，as embedded in the corporate governance structure to protect the interests of small shareholders，the independent director system plays a role. The study can provide the constructive suggestions for the policy makers to adjust the relevant equity incentive policies.

Key words: equity incentives, R&D expenditure, earnings manipulation