Ethics, Ethics . . .

Of course the big news today is the sitting governor of Illinois being arrested for trying to "sell" Barack Obama's now vacated Senate seat. This on the heels of senator Ted Stevens being convicted of corruption and Charles Rangel of New York not far behind. At least the voters of Louisiana voted out William Jefferson--the congressman who happened to have $90,000 just sitting around (Alaska did the same to Stevens). But this is not the story on ethics I want to explore. These "gentlemen" did not have ethical lapses as much as they simply engaged in criminal activity (fraud, conspiracy, and corruption is not an "ethical lapse").

John Thain, the most recent CEO of Merrill Lynch -- swallowed up by Bank of America at the height of this Fall's financial meltdown, reportedly asked for a bonus of $10 million. I am sure the consensus among the punditry and people at large is that Thain getting a bonus is outrageous considering that the value of the stock has gone from about $60 to $15 over the course of his tenure. Is it ethical for Thain to even think he deserves a bonus?

Well, actually maybe. Here is one pundit who says Thain deserves it because he saved the company (and thousands of jobs in the process). In fact, some reporting back in September chronicled how well Thain actually performed in saving a company that was in serious trouble when he took over a year ago. Compared to some of his counterparts at Bear Stearns and Lehman (Mr. Fuld make a nice comparison), Thain was very good in a very tough situation. Thain has evidently accepted the Board's decision not to grant a bonus, but the decision may be more one of public relations than actual lack of merit.

Fraud and corruption are not hard to evaluate or condemn . . . the ethics of compensation and many other business decisions are prone to debates more difficult to evaluate.