The news that Bear Stearns chairman Jimmy Cayne cashed out $61.3 million in stock had people wondering yet again what it is that people on Wall Street get paid for. After all, Cayne presided over Bear’s near-collapse. The stock he cashed in was all back pay, and owed to him, but it drives home the point that someone who played bridge while Rome burned had devalued stock worth more than many.

Stock options were supposed to make people into better managers and encourage them to communicate well with the market and add value to their firms. What happened?

Some great minds are mulling over the problem of how to pay people so that they help their companies without pulling too many levers to fill their own pockets. Warren Buffett’s longtime adviser, Charlie Munger, is one of those people, as is Netscape founder Marc Andreessen.

At issue is whether stock options corrupt the soul by making people treat their stock-based pay like a lottery ticket. Andreessen references some previous writings by Munger in this blog post:

“Another generalized consequence of incentive-caused bias is that man tends to ‘game’ all human systems, often displaying great ingenuity in wrongly serving himself at the expense of others.”

Andreessen himself argues against both stock options and restricted stock as a way to get people to do their jobs responsibly. He writes:

“In the long run it probably makes sense for some new approach to stock-based compensation to be developed that both preserves the motivation to create as opposed to preserve value, but factors out the environmental swings of rising and falling stock markets. Some form of indexing against market averages would probably do the trick. This has been tried from time to time, and I expect it to be tried more in the future, at least for public companies.”

Deal Journal readers, here is our weekend question to you: Are stock options a force for good or evil?