I have been approached to take over as CEO for a manufacturing business that is in a turnaround situation. The current owners took over the business a couple of years ago after injecting significant cash into the business and bailing out the previous owner from a default situation.

Their offer for me to take over as CEO includes a salary that is below market; the main incentive comes from equity upside of up to 20% depending on the turnaround progress. I will not have the opportunity to get to know the business intimately or do any kind of due diligence. From what they have told me, the turnaround is on track.

I want some opinions on a reasonable and fair compensation structure in this scenario and any pitfalls to look out for. For what it's worth, I have a previous relationship with the current owners and believe I can trust them.