Abstract：Based on principal-agent theory and board governance theory,this study adopts modified Jones model to study the influence of correlated non-executive director governance on earnings management behavior in executive stock option incentive.The results show that the association of non-executive directors can effectively inhibit the earnings management before the announcement and before the first exercise of the executive stock option incentive draft.Furthermore,compared with state-owned enterprises,the non-executive directors of non-state-owned enterprises have a more significant inhibitory effect on earnings management in stock option incentive.However,the power of management will hinder the inhibition of earnings management by correlated non-executive directors,and correlated non-executive directors with financial experience have more significant inhibition of earnings management in stock option incentive.
