public sealed class PictureElement : GraphicElement, System.ComponentModel.INotifyPropertyChanged, System.IComparable, System.IEquatable<Element>  

///This example references a PictureElement on a layout and changes the picture by setting a path to a file on disk using the

//Added references
using ArcGIS.Desktop.Core;                        
using ArcGIS.Desktop.Layouts;                      
using ArcGIS.Desktop.Framework.Threading.Tasks;    

public class PictureElementExample
{
  public static Task<bool> UpdatePictureElementAsync(string LayoutName, string PictureName, string PicturePath)
  {
    //Reference a layoutitem in a project by name
    LayoutProjectItem layoutItem = Project.Current.GetItems<LayoutProjectItem>().FirstOrDefault(item => item.Name.Equals(LayoutName));
    if (layoutItem == null)
      return Task.FromResult(false);

    return QueuedTask.Run<bool>(() =>
    {
            //Reference and load the layout associated with the layout item
            Layout lyt = layoutItem.GetLayout();

            //Reference a picture element by name
            PictureElement picElm = lyt.FindElement(PictureName) as PictureElement;
      if (picElm == null)
        return false;

            //Change the path to a new source
            picElm.SetSourcePath(PicturePath);

      return true;
    });
  }
}

//Create a picture element and also set background and border symbology.

//Construct on the worker thread
await QueuedTask.Run(() =>
{
  //Build 2D envelope geometry
  Coordinate2D pic_ll = new Coordinate2D(6, 1);
  Coordinate2D pic_ur = new Coordinate2D(8, 2);
  Envelope env = EnvelopeBuilder.CreateEnvelope(pic_ll, pic_ur);

  //Create and add element to layout
  string picPath = @"C:\Temp\WhitePass.jpg";
  GraphicElement picElm = LayoutElementFactory.Instance.CreatePictureGraphicElement(layout, env, picPath);
  picElm.SetName("New Picture");

  //(Optionally) Modify the border and shadow 
  CIMGraphic picGra = picElm.GetGraphic();
  CIMPictureGraphic cimPicGra = picGra as CIMPictureGraphic;
  cimPicGra.Frame.BorderSymbol = new CIMSymbolReference();
  cimPicGra.Frame.BorderSymbol.Symbol = SymbolFactory.Instance.ConstructLineSymbol(ColorFactory.Instance.BlueRGB, 2.0, SimpleLineStyle.Solid);

  cimPicGra.Frame.ShadowSymbol = new CIMSymbolReference();
  cimPicGra.Frame.ShadowSymbol.Symbol = SymbolFactory.Instance.ConstructPolygonSymbol(ColorFactory.Instance.BlackRGB, SimpleFillStyle.Solid);

  //Update the element
  picElm.SetGraphic(picGra);
});