First Solar's new CEO will get a cool $5 million sign-on bonus and a starting annual salary of $850,000, according to a company filing with the U.S. Securities and Exchange Commission on Thursday.

Robert Gillette, who is due to start his new gig on Oct. 1, is replacing Michael Ahearn as the leader of one of the largest solar panel makers in the world. Ahearn has been at the helm for about 10 years and will become executive chairman to work on policy advocacy.

In an employment contract signed Wednesday, Tempe, Ariz.-based First Solar (NSDQ: FLSR) agreed to give Gillette annual bonuses that would be set by the compensation committee of its board of directors.

Gillette won't have to work long to get the first year-end bonus, however. His contract calls for him to receive "at least $850,000 (without proration) and subject to upward adjustment based on performance" for First Solar's fiscal 2009.

For next year, Gillette is entitled to a bonus that is equal to his annual salary, the SEC filing said.

First Solar also will give him $3.25 million of fully vested shares of the company, as well as $3.25 million of fully vested stock options. Gillette also will get $6.5 million in restricted stock.

Gillette is heading to First Solar from Phoenix-based Honeywell Aerospace, where he had been the CEO since January 2005. The business employs about 40,000 people and includes nearly 100 factories and service offices worldwide.

Before Honeywell Aerospace, Gillette was the CEO of Honeywell Transportation Systems. He earned a bachelor's degree in finance from Indiana University. (Other recent Honeywell alums include Adura Technologies CEO Jack Bolick.)

Gillette will be taking over a company that is making a big push into the project development business. First Solar, which is known for its ability to make solar panels cheaply, is facing a tougher competition these days from competitors who also are rapidly driving down their manufacturing costs.

Earlier this week, First Solar said it had secured a preliminary agreement with the Chinese government to build a 2-gigawatt solar farm in Inner Mongolia.

China expects to get more than just a solar power plant, however. First Solar would be hiring and training Chinese companies on how to engineer and build solar power projects, a skill that is largely lacking in a country with a small solar power generation capacity (see First Solar's Gift to China: How to Build a Solar Farm).

Tags: china, first solar, robert gillette