Photo-Illustration: Shutterstock/CNNMoney
Now playing
01:31
GE changed our lives. Why is it struggling?
Now playing
04:56
How these startups are tackling high drug costs in the US
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Win McNamee/Getty Images
WASHINGTON, DC - MARCH 09: Elon Musk, founder and chief engineer of SpaceX speaks at the 2020 Satellite Conference and Exhibition March 9, 2020 in Washington, DC. Musk answered a range of questions relating to SpaceX projects during his appearance at the conference. (Photo by Win McNamee/Getty Images)
Now playing
04:19
Bitcoin and crypto's 'Elon Musk problem'
Now playing
02:29
'Outrageous' used car prices amid highest inflation in 13 years
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
jeff bezos blue origin space launch cooper intv sot vpx_00021804.png
Now playing
03:05
Jeff Bezos reveals most surprising part of space mission
CNN
Now playing
03:05
These moms explain how child tax credit checks will help them
CNN/John General/Atom Smasher
Now playing
04:04
Here's everything you need to know about ransomware
Now playing
04:04
Subway CEO on menu changes: The one thing we did not touch is our tuna
Now playing
02:40
Gretchen Carlson tells Anderson about the bipartisan bill she's backing to help workers
Rachael Flores
Now playing
02:22
Employees go viral after resigning via Burger King sign
Virgin Galactic
Now playing
02:05
Richard Branson lands safely after rocketing to outer space
CNN/Shutterstock
Now playing
02:20
Prices are going up on almost everything. Here's why
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation.  (Photo by Justin Sullivan/Getty Images)
Justin Sullivan/Getty Images
A car drives by a Speedway gas station next to the Shell refinery on March 03, 2021 in Martinez, California. Gas prices have increased across the United States to a national average of $2.72 per gallon, an increase of 30 cents from one month ago. Gas in California has an average price of $3.68 per gallon, the highest in the nation. (Photo by Justin Sullivan/Getty Images)
Now playing
04:01
Gas prices are high. Here's why
Now playing
02:46
The US needs construction workers
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
BetterUp CEO Alexi Robichaux workplace mental health orig_00023111.png
Now playing
03:06
This CEO says leaders need to focus on mental health to boost productivity at work
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Jade Gao/AFP/Getty Images
A driver uses the Didi Chuxing ride-hailing app on his smartphone while driving along the street in Beijing on July 2, 2021. (Photo by Jade GAO / AFP) (Photo by JADE GAO/AFP via Getty Images)
Now playing
02:13
Didi shares plummet after China bans it from app stores
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% above the 30-day average prior to Culp’s arrival, the new CEO would claim a one-time reward.

A 50% 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% – 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.

Former Danaher CEO Larry Culp was hired by GE on October 1 to become the company's first ever outsider CEO.
T. Rowe Price/AP
Former Danaher CEO Larry Culp was hired by GE on October 1 to become the company's first ever outsider CEO.

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.