Gary Crosby has a million reasons to help First Niagara Financial Group (FNFG) find a permanent chief executive.
The $37 billion-asset company disclosed in a regulatory filing Wednesday that Crosby, tapped as interim president and CEO following the departure of John Koelmel, will receive a $1 million cash payout when his interim role ends. The filing did not specify whether Crosby would get the money if he were named the permanent CEO.
Such a payout is highly unusual, said Rod Taylor, the CEO of executive recruitment firm Taylor & Co. "The only explanation is that they fear losing him," Taylor said in an interview.
First Niagara also agreed to pay Crosby, 59, a monthly cash fee of $25,000 while he is the interim CEO. Those payments would be on top of the $655,000 base salary he will receive this year. He is also working toward a maximum long-term incentive award of $1 million for 2013, the filing said.
First Niagara, based in Buffalo, N.Y., also disclosed the Koelmel's departure will be "deemed to be a termination … for reasons other than for cause" and that he will receive benefits under the company's CEO severance plan for such a termination. Koelmel also met the definition of retirement under First Niagara's annual incentive plan and long-term incentive plans.
The company said late Tuesday that it had formed a special committee of independent directors to search for a permanent president and CEO. The committee, chaired by Nathaniel Woodson, will consider internal and external candidates and will hire an executive search firm, First Niagara said.