John Koelmel will receive a severance package from First Niagara Financial Group (FNFG) that is 38% smaller than previous reports had indicated.

Koelmel, whom the Buffalo, N.Y., bank ousted from the chief executive job in March, will receive a severance payment worth approximately $2.9 million and an incentive award worth more than $200,000, according to a regulatory filing Friday. The company will also pay Koelmel $25,000 for legal expenses.

A Buffalo news station reported in May that Koelmel and the $37 billion-asset company had reached a deal under which the former CEO would receive $5 million.

But Koelmel could stand to earn far more than $3 million if First Niagara's stock rises, the Buffalo News reported Friday. Koelmel was granted options to buy 895,000 shares of First Niagara stock during his tenure, and the options vested when he was fired. The average exercise price of the options is $12.81, according to the Buffalo News, higher than the company's Monday morning share price of $10.66.

Koelmel began working for a Buffalo real estate developer last month. Gary Crosby is First Niagara's interim CEO while the company searches for a permanent replacement for Koelmel.

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