Although it seems unethical I'm not entirely sure why. They paid him to make sure a certain amount of work got done. It did. Does it really matter if he physically did it himself Vs supervising someone else doing it? Companies subcontract out work all the time.

That said, I wouldn't do it.

Maybe instead of firing him they should have put this Bob guy in charge of managing outsourced development and outsourced a bunch more stuff. Sounds like there is a pretty massive cost saving to be made there.