I don't think the drop from $6.5 million to $1.5 million in 2 years is allowed, but other than that it's what I'd expect his next contract to look like. It's no more egregious than the other retirement contracts that have been accepted. He does have a higher top salary than the other contracts, so the difference from high to low is greater, but it's still consistent with the salaries of players at that age. Nobody expects Kovalchuk to be superman when he's 40 years old, so he'd be paid like any of the other guys who last until they're 40.
The NHL "investigating" those other contracts could be an issue. They need to hurry up with those investigations, because the Devils need to know what is allowed.