All else aside, this would make for a pretty amazing answer to the "So why did you leave your last company?". I can't imagine the loyalty inspired by this type of "treat my team right or I'm out" mentality.
"I left because I was incapable of persuading management of the effectiveness and importance of my team and its contribution to the overall enterprise."
"Wow, don't you think you're being a little hard on yourself?"
"Well, they gave away my team's bonus to another team, despite my objections."
"That's unfortunate, but that still doesn't really explain why you left your last company."
"Well, despite the clear signal they sent when they took away my team's bonus, I didn't get the hint and completely misjudged my importance to the company. See, I painted myself into a corner by giving the executive team an ultimatum."
"Hmmm, yea, not very wise, you probably do suck as a manager."
Someone will have to deal with this issue.. either him or the new manager. His job is to handle issues like this.. quitting the moment he runs into a problem is not a sign of a good manager.