NEW YORK (CNN Business) - Larry Culp will be a hero on Wall Street if he can revitalize General Electric's lifeless share price. The new GE boss will also be about $300 million richer.
Culp secured a handsome pay package when he agreed on Monday to become the first outsider CEO in GE's 126-year history. He faces enormous challenges given GE's debt-riddled balance sheet, shrinking cash flow and slumping power division.
The four-year agreement, detailed in filings made public late Thursday, calls for Culp to receive an annual base salary of $2.5 million and a bonus of up to $3.75 million a year.
Culp, the former CEO of industrial manufacturer Danaher (DHR), can also receive up to $15 million a year in performance share units if he hits certain other targets.
But Culp can really strike it rich if he's able to dramatically increase GE's (GE) depressed market value within four years.
If GE's share price holds at least 50 percent above the 30-day average prior to Culp's arrival, the new CEO would claim a one-time reward.
A 50 percent leap for GE shares would take it to about $18.60 -- a sizable recovery given the company's recent stumbles. Culp would receive 2.5 million shares valued at about $46.5 million.
The real big money comes if GE's shares spike 150 percent -- to about $31 a share -- by September 30, 2022. That would trigger a reward of 7.5 million shares, valued at $232.5 million.
In other words, Culp stands to receive more than $310 million in total compensation if he can engineer a GE comeback in the next four years.
Of course, shareholders would be thrilled with that kind of improvement in GE's share price after many years of horrible performance. Nearly half a trillion has evaporated from GE's market value over the past 18 years, or roughly the size of Facebook (FB).
"Larry is a proven executive with a long track record of superior execution," GE said in a statement. "The Board's package to attract Larry is overwhelmingly tied to performance."
Culp has a track record for success. Danaher's market value and revenue quintupled during his tenure there.
GE said that only about 10% of Culp's annual pay is guaranteed and the one-time grant will only pay if the company's market value climbs by at least $50 billion. Last week, GE fell below $100 billion in market value for the first time since the Great Recession.
The one-time reward will not pay if Culp is fired for cause or if he quits "without good reason," the filing said.
Investors are loving the early days of the Culp era. GE's share price climbed another 4% on Friday, leaving it up nearly 17% since the hiring was announced.
Even Wall Street's biggest GE bear praised the leadership shuffle.
"We fully expect him to do well," JPMorgan Chase analyst C. Stephen Tusa, Jr. wrote to clients this week. He called the hiring a clear "positive for future investor confidence."
But Tusa warned that Culp has a "large amount of wood to chop" because he's inheriting a troubled company.
Analysts expect Culp to seriously consider layoffs, especially at GE's headquarters and its slumping power division.
Some question whether GE's pay package will force the new boss to be too short-term oriented.
"Larry must be rewarded for the drivers of a great business and not be tempted to take shortcuts to boost stock price," said Eleanor Bloxham, founder and CEO of The Value Alliance, which advises boards on corporate governance.
Bloxham worries the $300 million pay package will encourage Culp to launch stock buybacks or sell great businesses.
"I'd be concerned about financial manipulation that would dress up a pig," Bloxham said.
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