The new salvage crane for harsh sea conditions is a salvage and rescue device that is used for the space launch capsule. The wave compensation algorithm can improve search and rescue ability at sea, and can also provide wave compensation guidance for other sea vessels under harsh sea conditions. Firstly, compared with the traditional fuzzy PID algorithm, the wave compensation algorithm is improved in three aspects: fuzzy rules, fuzzy inputs, and fuzzy outputs. For the fuzzy rules, E and EC are used separately. E plays a main role and EC plays an auxiliary role. For the fuzzy inputs, the angle deviation is the sum of current angle and angle's changing rate. For the fuzzy outputs, the cylinder's inertia and the electro-hydraulic valve's reverse dead zone factors are taken into account, and the PID output value is set with upper limit, lower limit, and dead zone. Secondly, the control valve and the hydraulic system's model are established in AMESim. The improved algorithm is established in SIMULINK. Combining the hydraulic model with the algorithm model, we do the co-simulation analysis. Thirdly, the improved algorithm's verification experiments are carried out on a rocky platform, which can simulate the ship's instability in different sea conditions. Finally, the simulation and experimental results verify that the improved fuzzy PID algorithm enhances the salvage crane's response and robustness, and also improves the salvage effect.