CEO Salary Leak: How Can We Prevent Future Confidentiality Breaches?

We have a situation where the accountant has revealed the CEO's salary to many employees, which has created a lot of unrest and gossip within the organization. How could we avoid this from happening in the future?

Dear Manukarnika,

I believe there is a policy in the appointment letter that states that "the salary would remain confidential to everyone and no one would discuss it."

Also, you must have discussed with the accountant well in advance that he is not supposed to reveal any information, whether confidential or not, to any employees other than those to whom he is entitled, regardless of their position. He should be called in and asked for an explanation. Please don't give him any space to offer excuses. Clearly, orient everyone on the basic employee guidelines and what is expected. Emphasize that under no circumstances should salary details be disclosed to anyone, and no one should express interest in knowing such information about others. Anyone found doing so in the future will face immediate disciplinary action without room for excuses.

Regarding the accountant, please be cautious about assigning him extra work. It may not only be the CEO's salary but also other crucial information that he might have disclosed. He needs to be reoriented on the basic ethics expected in his work, the failure of which will make him decide whether he wants to continue in his role.

Handle this situation with less emotion but with a very stern message to everyone. This will deter gossip, allowing focus to return to what's more important – work.

Hi Manukarnika,

Kindly inform the accountant not to reveal anyone's salary no matter which grade they are in. This is a very sensitive area.

By the way, why are people so unrestful and gossiping? If he is the CEO of the organization, he deserves it. What will be the strength of the organization, yaar?

Thanks, Asha and Arjun. We currently have 26 employees. The organization is very flat, and our CEO moves freely with all employees. The organization encourages a friendly, yet professional atmosphere. The fact that the accountant was revealing sensitive information (despite being informed about the need for confidentiality on all matters) to employees came to light when an employee, fired for lack of performance, made a scene while exiting.

Dear Manu,

While exiting under such a scenario, people tend to show their anger/frustration. Their thinking process is: "Why are you terminating me - after all, I am only getting so much salary - and you are ready to pay the CEO so much - can't you adjust with my salary? Why me?" This is their thinking process (can't blame them - because under a survey the two major reasons for depression and loss of peace are: a) Loss of a close relative/friend through death b) Loss of job. Please highlight that it is not the salary - but just the performance did not match what this company expected. He may be an asset to another company that would be able to use his skills in a much useful way - but unfortunately, his skills do not match the current performance requirement. Let him know that only a positive reference will be given about his work, and no one will be told that he was terminated. It's common for people to feel bad and make such statements while in depression.

And the accountant: handle him and ask him what made him reveal those pieces of information. Under no circumstances must the salary the company pays to any employee be linked with someone else's termination. Let him know it was not cost-cutting - but performance monitoring that caused his loss of job.

Thanks Asha and Arjun. We currently have 26 employees. The organization is very flat, and our CEO moves freely with all employees. The organization encourages a friendly, yet professional atmosphere. The fact that the accountant was revealing sensitive information (despite being told about the need for confidentiality on all matters) to employees came to light when an employee fired for lack of performance made a scene while exiting.

Dismiss the accountant citing breach of confidentiality and secrecy. Let the guy know this and also penalize him for this. Anyone is entitled to privacy and confidentiality.

Sack the accountant. It will set an example on confidentiality and secrecy for others.

Regards,
Venky

I agree with the two gentlemen suggesting the dismissal of this accountant. For all we know, he has (I am sure) signed a confidentiality agreement, which is most often reflected in his job description regarding what the company expects of him. His action in divulging the CEO's salary has clearly violated the said code. On the other hand, this mandate will echo justice and fair judgment on the part of the administrative level. His actions are set to be an example for all. Needless to say, this is something the company has to think over.

Dismissing someone would not solve the unrest and gossip, yet sometimes it might aggravate. The clear action and judgmental decision on this matter play a crucial role in all staff milieu.

It seems that the accountant is purposefully revealing confidential matters to other employees. It is not because of his ignorance. Since he knows the salaries of all employees, he might be trying to create unrest among the low-paid employees by revealing the salaries of highly paid employees, so that they may demand a salary hike. If their demand is accepted, the accountant can also expect a salary hike and at the same time, be in the good graces of management. He seems to be either a very clever guy or very stupid. In my opinion, he is not fit for his job.

Well, it depends on the type of company you work for. If the company is public, then the CEO and other board members' salary is always public - so no big deal. On the other hand, if you work for a private company, then the founder (if he is not CEO) should have agreed to pay the CEO the salary, so others should just mind their own business. If the CEO is the founder (in a private company), then again, he knows what he wants to do with the company, and he will most likely take the least salary and increase the assets of the company to get a better value of his company in the long run. So again, no big deal.

Dear Friends,

Agreed, this is a mistake from the accountant, but why such a big hue and cry to the tune of sacking someone? We are in an era of RTI and accountability. You want a candidate to declare the assets before the election, and lo, here in a group of 26 persons, you cannot assimilate the fact. This opinion is for us to think from a different angle.

Regards,
PPR

Dear Friends,

I feel in this case, the HR is either towing the management line blindly, as usual (there's no option in a small Pvt co.), or trying to unleash one of its sticks, as usual, that goes by the name of "confidentiality". Always the instinct of a 'policeman', the mentality of a sadist.

I think being an accountant, the person is much more learned and competent in his profession than our HR friends. Please remember that HR is the only profession where you do not need any qualification, accreditation, or certification. We have already seen, in CiteHR posts itself, that any Tom, Dick, and Harry are made an HR manager/executive; be it a receptionist or any person working in the office or even a fresher. So, anyone can be made an HR functionary and set upon the employees to teach them "discipline". :-P

I want to ask you all HR people, who are making a hue and cry over this incident, the following questions:

1. Is it a public limited company?
2. Is not the CEO a senior functionary of the company - in most cases at least a Director?

If the answer to both these questions is TRUE/YES; then my ultimate question is:

Have you ever seen a company's Annual Report? (Hint: An accountant has almost always seen (rather studied) an Annual Report, so he knows what is Confidential and what is in the Public Domain; whereas an HR person in most cases has only "heard" that companies have something called an Annual Report but is ignorant of its content). :-D

P.S. - If you still do not get what I am implying, please do not post derogatory posts; rather ask/discuss with a knowledgeable colleague of yours.

Regards to you all, my friends - Hats off!!!!

Dear Manukarnika,

If your appointment letter specifies not to disclose salary information, it is the right time for HR to address this issue during a personal review with the accounts personnel. If your company is policy-oriented, consider either terminating his employment or issuing a show cause notice. This action will serve as a lesson for others.

Thanks,
Karan Kesarkar

Raj - I agree that some HR professionals don't do an in-depth analysis of the situation and end up making judgments that are detrimental to the company and culture. But in this case specifically - we don't know whether the organization involved is a Pvt Ltd or a Public company. I can safely assume that the company presented here is a Pvt Ltd company - Reason: Few employees, flat structure, friendly atmosphere, etc. Secondly, if it was public, then the accountant would have put in a defense by showing HR the "Annual Report" and getting a clean chit, which apparently he hasn't. Can the author of this post brief us about a) Is the organization Pvt or Public and b) has the accountant put in a defense for the show cause (if at all it is issued)? If the organization concerned is Pvt Ltd, then the accountant, while joining, would have signed a confidentiality and non-disclosure agreement - based on the agreements, the organization has full rights to ask for an explanation and be termed. I WILL WRITE ON THIS IF I GET AN ANSWER TO THE QUESTIONS ABOVE :) Regards Trinity-Morpheus

Raj Kumar Hansdah: Dear Friends, I feel in this case, the HR is either towing the management line blindly, as usual (there's no option in a small Pvt co.), or trying to unleash one of its sticks, as usual, that goes by the name of "confidentiality". Always the instinct of a 'policeman', the mentality of a sadist. I think being an accountant, the person is much more learned and competent in his profession than our HR friends. Everyone respect every profession, especially the HR. Be it a sweeper or accountant or be it a person of your intellect. HR understands the pain it takes to recruit and retain, and from here comes the realization of respecting professions. Please remember that HR is the only profession where you do not need any qualification, any accreditation, or certification. We have already seen, in CiteHR posts itself, that any Tom, Dick, and Harry is made an HR manager/executive; be it a receptionist or any person working in the office or even a fresher. So, anyone can be made an HR functionary and set upon the employees to teach them "discipline". :-P Disagree completely with this statement. You have to be an HR for 1000 odd employees before making such statements. You will then gain insight into what HR is really about. No certification or accreditation can get you into a senior management bracket if you haven't earned it. No lunches are free, and HR is no exception to this rule. Performance pays. I want to ask all you HR people who are making a hue and cry over this incident the following questions: 1. Is it a public limited company? 2. Is not the CEO a senior functionary of the company - in most cases, at least a Director? If the answer to both these questions is TRUE/YES, then my ultimate question is: Have you ever seen a company's Annual Report? This is a totally irrelevant question to the discussion initiated and is a deviation. (SADLY) (Hint: An accountant has almost always seen (rather studied) an Annual Report, so he knows what is confidential and what is in the public domain; whereas an HR person in most cases has only "heard" that companies have something called Annual Report but is ignorant of its content). :-D P.S. - If you still do not get what I am implying, please do not post derogatory posts; rather ask/discuss with a knowledgeable colleague of yours. Regards to you all, my friends - Hats off !!!!

My dear Friend Trinity, I have always admired your level-headed posts and your objectivity in addressing the issues, and this post is no exception. I had requested the members specifically not to respond in profanities (or use derogatory terms)!!!!! 😃 But typical HR habits die hard... 😛

In the organization where I had worked for more than twenty years starting my career as a Management Trainee and subsequently in the functional area of HR, the employees at single locations/plant exceed a lakh - and the industry is called the "mother of all industries" and the plant is bigger than a township and the movement of materials is done only through rails; where even a newly appointed (post training and probation) HR manager would look after at least 1400 employees; the number of persons in HR dept itself exceeds 1200; and I am just talking about one unit of the company which has one of the core values (out of total four) as - "concern for people".

My team and friend would say in a lighter vein, it is 'not concern for people' but 'making people concerned' and unofficial HR philosophy can be explained by providing a twist to a couplet of Ghalib (ghar sey masjid hai bahot door, chalo kisi roatey huye bachchey ko hasaya jayein) - aaj office bandh hai ---- (hr manager's name); chalo kisi hanste huey bachchey ko rulaya jay!!

I have always been a crusader for "HR Managers, Be a Human first". Just tell me, [B]can't anyone find the salary of CEO from the Annual Report wherein the emoluments of all senior functionaries are disclosed to the stakeholders??? At worst, one simply divides the amount by 12 to arrive at a monthly approximation!!!!

Take a survey: You'll find not more than 3 to 4% of HR persons have ever set their eyes upon a company's Annual Report. I have done a pilot survey, and I know it.

Coming to the point; even otherwise, whether the accountant has committed this momentary lapse by commission or omission (carelessness); is the punishment of taking away his job commensurate with the offence? Why make his and his family's life miserable??

If you say YES, then I have nothing more to say, except that it will further strengthen my perception of the deficiencies in HR practice and practitioners. Warm regards.

Hello,

Being an Accounts graduate who later specialized in HR, I have had the chance to glance through a company's annual report. Could Mr. Raj please highlight how to interpret the CEO's salary for a layman (exclude me here - exclude HR here. Include only an ordinary employee who reads the annual report - in the way it is read by a layman).

A few points to note before we enter an argument or blame HR:

a) If at all there is a possibility of anyone in the company knowing the salary of their CEO through any report, would there be a clause in the CEO's appointment "your salary is confidential"?

b) Assuming anyone could know the salary, why would the MD or the CEO himself request people not to share information about his salary?

c) Mr. Raj - this is specific to you! Let the HR be the person who you call "someone with less sense and no brains." What happened to the CEO? Should he not be aware that "hey big deal - the whole public out there knows my salary, so what if my team people know about it? So HR - don't make a deal about it!"

And what about this intelligent accountant? He could have said, "Hey HR..Read our company's annual report. There you have the CEO's information!" :-) Simple. A lot of information can be gathered by the way the question is put across. It's obvious that the person who posted the query here is sure that the information on the CEO's salary is not available elsewhere.

Terminating the accounts person may not be the right idea. You don't have the proper information on the source of how the information was spread. If the accountant acknowledged it - well and fine, warn him! That's it. Because information has already been out - you have no choice but to bring it back to the "hidden space" and rewind the situation. A strict warning would help for a) People who possess such confidential info b) People who are interested in knowing about such confidential information.

The person who made a cry about the CEO being paid is absolutely getting defensive. It is not the salary here that lost his job. Probably be clear to him that you are still looking for a person who would be paid his same salary (or something better), but skills that align with what your company expects. Maybe the terminated person is an excellent resource for another company - but not yours. The point is "not on breach of confidentiality" but handling this "terminated guy who is deeply frustrated" - Handle it - don't run away from the "actual problem".

The actual problem is "in handling the terminated person."

I think Trinity, Morpheus, and Raj Kumar Hansdah should read my (bobbydeb's) little comment carefully and add anything new if they have it. Otherwise, it's a waste of everybody's time.

Asha M-

What you say is right - there is a different issue related to Employee termination (along with the one we have discussed - Non-disclosure/confidentiality). Well, if you ask me, which issue is more important, I would say both, but would also say that both are different and fall under different categories. The first (i.e., Confidentiality) falls under the disciplinary policy framework, and the second (termination) falls under the Performance Management System. We cannot confuse both issues as being less/more important. Anything/Any issue that affects the employee (or their morale) is an issue of the highest importance.

Would ask you a question: Supposedly you resolved the situation of the terminated employee, would it suffice that someone in the org (assuming that it's a Pvt Ltd) is leaking salary figures? You would undoubtedly say 'NO'.

An employee is terminated after a thorough study is done and not on whims and fancies of the employer. I do agree that the situation exploded with the employee (terminated), but for an HR, he is a lost case. The only thing that an HR can do in this case is help the employee to get a new job or counsel the terminated employee. Terminations are delicate to handle, and at some time HR loses their sensitivity to deal with such situations. Experience pays in such matters. However, coming back to the point - terminated cases are lost cases. Nothing can be done about the employee, but HR can ensure that the internal atmosphere remains intact and undisturbed. But largely, the implications for terminating a single employee due to lack of performance are negligible and send a right message to the existing workforce about the expectation of the employer. I have handled hundreds of terminations every month when I was working for an insurance firm, and keeping the morale up was a challenge. The policy we adopted at that point in time was crystal clear transparency to all employees on matters related to their performance and parameters that could evoke terminations. And it helped because everyone knew their performances and knew what was coming if their performance dropped. The best way to deal with terminations is a clear understanding between the management and the employee about the expected performance. And when this is clear, then scenarios like the one which happened at our colleague's office could be avoided.

Coming to the other important issue - Breach of NDA. You have to take steps to rectify this situation. It could be issuing a warning letter or a show cause and subsequently reprimanding the concerned employee. You have to do it - the reason: if you don't do it now, you won't be surprised to find the entire unit going amok and chatting gibberish. You have to put your foot down and nip it in the bud. What if the person (leaking info) accidentally passes the information to a recruitment/consultancy/HR guy from a competing firm???? The implications of such a deal would be a) Attrition b) staffing costs going high c) Training cost gets appreciated d) Delivery (when project-related) gets impacted.

In both cases, communications play a vital role, and knowing what to do when in these situations will save the day.

Warm Regards

Trinity - Morpheus

Ash Mathew:

Hello,

Being an Accounts graduate who later specialized in HR - I have had the chance to glance through a company's annual report.

Could Mr. Raj please highlight how to interpret the CEO's salary - for a layman (exclude me here - exclude HR here. Include only an ordinary employee who reads the annual report - in the way it is read by a layman.)

A few points to note before we enter an argument - or blame an HR.

a) If at all - there is a possibility of anyone in the company to know the salary of their CEO through any report, would there be a clause in the CEO's appointment "your salary is confidential"?

b) Assuming anyone could know the salary, why would the MD or the CEO himself request people not to share information about his salary?

c) Mr. Raj - this is specific to you! Let the HR be the person who you call "someone with less sense and no brains." What happened to the CEO? Should he not be aware that "hey big deal - the whole public out there knows my salary, so what if my team people know about it? So HR - don't make a deal about it!"

And what about this intelligent accountant? He could have said "Hey HR..Read our company's annual report. There you have the CEO's information!" :-)

A lot of information can be gathered by the way the question is put across. It's obvious that the person who posted the query here is sure that the information on the CEO's salary is not available elsewhere.

Terminating the accounts person may not be the right idea. You don't have the proper information on the source of how the information was spread. If the accountant acknowledged it - well and fine, warn him! That's it. Because information has already been out - you have no choice to bring it back to the "hidden space" and rewind the situation. A strict warning would help for a) People who possess such confidential info b) People who are interested in knowing about such confidential information.

The person who made a cry about the CEO being paid is absolutely getting defensive. It is not salary here - that lost his job. Probably be clear to him that you are still looking for a person who would be paid his same salary (or something better), but skills that align with what your company expects.

Maybe the terminated person is an excellent resource for another company - but not yours. The point is "not on breach of confidentiality" but handling this "terminated guy who is deeply frustrated" - Handle it - don't run away from the "actual problem".

The actual problem is "in handling the terminated person".

Dear Trinity,

I am sure that this "issue" popped out only when the terminated person said that out loud - when he was frustrated. Most people tell their greatest secrets when they are not in a position to handle their emotions. I am sure each and everyone in that company had known what the CEO is paid even earlier. It's a poor reflection on the accountant that he did not realize it could eventually link back to him. He must have been more careful - and it is a black mark on his review. A huge black mark. However, firing the accountant makes less sense to me if the accountant has not been properly oriented about such confidential information and the consequences of the same.