The Wall Street Journal just posted a good story looking at the much debated issue of ZelnickMedia's new compensation package from all sides.

As an applied ethics expert quoted in the piece says, it's certainly "ethically problematic" that the firm, which includes executive chairman Strauss Zelnick, CEO Ben Feder, and exec VP Karl Slatoff, got a big raise amidst a takeover bid from EA that shareholders didn't know about at the time. Particularly since it gives Zelnick a chunk of shares that are supposed to vest over time but half of which will vest immediately if Take-Two is acquired.

In other words, Zelnick gets a healthy payday if a deal that the management, but not shareholders, knew could happen at the time goes through.

The truly cynical will also note that perhaps Zelnick and his team have said they won't negotiate with EA until at least April 30, the day after "GTA IV" comes out, because that will be after the company's annual meeting where the new compensation package has to be approved.

On the other hand, I think Zelnick makes a very fair case that he has become much more actively involved in the company than he  planned when becoming chairman last spring, thus meriting the raise, which also made him executive chairman. Not to mention the very fact that EA is offering $26 per share, a 50% bonus over current prices, indicates the company is doing pretty well under him.

And while one may complain that in the grand scheme of things giving executives a "golden parachute" when their firm gets acquired is outrageous, it's certainly standard practice.

The only way this will turn out really disturbing will be if, after April 30, Zelnick ends up accepting EA's offer of $26 per share or something close to it. That's pure naked greed just to get his golden parachute. Otherwise, he certainly has a plausible case that he's doing what's best for shareholders.