To be honest, I think that would have been massively disrespectful to do that to anybody, let alone one of the biggest legends in the club's long history.
Maybe if it's handled incorrectly it could come across that way. But with KK being who he is, he has always said that his only concern is the club. He didn't need the job for the money, or to prove himself etc. He was as pained as anyone to see our plight and felt he could provide a solution. He has also said a few times that of there's someone better than so be it.
If that's the case then with an honest chat with the owners would surely have cleared up any misgivings about such a contract. It's in the clubs interest financially as potential compensation is limited to an affordable amount. It would've served KK fine as well as his contract is never running down and he's always guranteed some compnsation should things change. In any case, finance wasn't his motive for th job so he could just focus on his job every day knowing he's still got a year left on his contract.