On compensation incentive, there's been a long research history overseas, and more of the researches aimed at the theory of management other than experience analysis. So regardless of the theory or experience analyses, the theme of the levels and structure of TMT's compensation still were limited, and contradictions existed in the same conclusions. This paper employs the structural equation model rather than simple or multiple linear regression models to analyze TMT information (such as the decision factors and effect of the compensation) of Chinese listed companies' annual report in the year of 2005 quantitatively and provide some valuable results.