The main purposes of the study were to explore the relationships between Incentives compensation of the management, firm investment decision and firm performance, as well as the mediate effect of firm investment decision. This study samples were from public companies listed in the Taiwan Stock Exchange and Over-the-Counter from 2005 to 2010. The data were collected and analyed by using descriptive statistics analysis, collinearity diagnostics, and multiple regression analysis. According to the findings, stock-based compensation can promote the firm performance, but managers investment decision are inefficiency. Inefficiency of the firm investment decision has a few mediating effect between relationship manager’s incentives compensation and firm performance.