Hydropower plants with good regulating performance were made reluctant to be engaged in the joint  operation of cascade reservoirs because of institutional irrationality in the distribution of compensation benefits for the reservoirs. Shapley-Value method of game theory was used to explore the approach of benefit distribution. The Three Gorges and Qingjiang cascade reservoirs were selected as case study. The result manifested that this method was practicable. The compensation for Qingjiang cascade reservoir which has good regulating performance was fully considered in the system of compensation. Fair and reasonable distribution could be achieved so that the reservoirs could take active cooperation to  boost an optimal benefit for all the reservoirs.