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More Rolling Heads

It has been another day in the business world, with two major companies announcing more departures of misbehaving top executives.

First, KB Home ousted CEO Bruce Karatz after an internal investigation revealed he improperly dated personal stock options over the eight-year period from 1998 and 2005. The agreement in which Karatz "retired" requires him to repay the company nearly $13 million. The company also fired human resources director Gary Ray and accepted the resignation of chief legal officer Richard Hirst, both related to the matter. KB Home is the fifth-largest home builder in the United States and, according to the Wall Street Journal, Karatz was one of the nation's highest-paid executives, earning $155.9 million in 2005.

Then, DaimlerChrysler disclosed that the head of its bus unit, Wolfgang Diez, had resigned "for personal reasons" amid discoveries of "irregularities" at the world's largest bus manufacturer. Diez had been the chief executive of DaimlerChrysler's EvoBus unit since its formation in 1995. The company said it uncovered the irregularities during a "routine investigation of its own business." However, the company is also under investigation by the U.S. Securities and Exchange Commission for allegedly bribing foreign officials, while financial regulators are probing into potential violations of U.S. anti-corruption laws.

Ethicist Michael Josephson said, "There's a hole in the moral ozone and it's getting bigger." It's becoming increasingly apparent that ethical holes start with a puncture at the top.
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