This paper researches on the formation mechanism and influencing factors from the perspective of management agency conflict and internal/external compensation gap based on the samples of A-share listed companies from 2012 to 2020. Empirical test shows that the more serious the agency conflict, the larger the goodwill scale formed through M&A. Increasing the internal compensation gap can alleviate the relationship between agent conflict and goodwill scale. The positive external compensation gap does not have a significant impact. However, the negative external gap aggravates the positive relationship between agent conflict and goodwill scale. Further research shows that the company with worse agency problem is more likely to experience goodwill impairment and a negative performance during the subsequent period. The findings can help enterprises to restrain the formation of the non reasonable part of goodwill in order to reduce risks.