First I would ask what he's going to do with the compressor. You may get it for the taking! If not you have the option of throwing money at him.
Second it depends who made the pump, Sounds like the bearings are shot. Turning stiff but still turning indicates a lower end rebuild. You can find a shop that will rebuild it or provide you with parts to do it your self.
Also the pump has a core value in it self. Look for a dealer and find out what a new/rebuilt pump will cost.
Your boss weighted the cost of new to the cost of rebuild/time lost on the jobs and opted to purchase a new unit. His need for a running piece of equipment is your gain. Good luck on getting it. TF