Business LawData Security & Privacy

Citing Failures Related to Massive Data Breach, Sony CEO Loses 15% of Salary

Citing a lack of corporate contorls and preparedness to protecting mission-critical data, more corporate boards are holding back the salaries and bonuses of its chief executives.  At Sony, Corp., the board of director’s decided to cut the salary of its current CEO, Howard Stringer, by 15%, and its probably successor Kazuo Hirai, from 110 million yen to 101 million yen.  Mr. Hirai was the man in-charge of the PlayStation division at Sony, Corp., when that unit was hacked into last April.  The cyber-attack exposed the personal information of over 100 million users of PlayStation.  During Mr. Stringer’s tenure as CEO, Sony, Corp., has lost over 37 percent of its market value.  Additionally, Sony, Corp., has proposed that its board members and executives all receive cuts in salary and bonues of 11 percent.

The translation here is that organizations are expecting more from its executive leadership.  Cyber-attacks are a real threat to the long-term viability of an organization, and there needs to be initiatives, on the part of boards’, to start considering how a data governance program might be implemented into an overall risk management strategy.  Creating a culture of compliance associated with protecting mission-critical information starts with a “tone at the top” mentality.  Compensation for executive management and board membership will be directly related to how the organization goes about implementing controls related to securing data.

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