Guidestar - Ethics: Transparency vs. Privacy

We discussed Guidestar last night.
If anyone is unfamiliar with Guidestar (although with a class of 20 something non profit folks I imagine not many - but just in case) it is a website where you can obtain non profit reorts and the 990 tax forms they are required to file with the IRS.  If you are unfamililiar with a 990 then one important note is that it requires that the top 5 (maybe 10 now??) compensated individuals working for the organization be listed - with their salary and benefit pay listed.  This in and of itself creates an HR challenge - want to know how much your boss makes?  If they are listed as one of the top earners his/her total compensation would be listed as salary and benefits.  Is that ethical?

Here are two scenarios for us to ponder:

Case #1 - As the economic downturn loomed an organization told it's employees that there needed to be tight fiscal controls in place and in an open staff meeting asked the employees if there were ways to cut the budget, and if people preferred to all take small salary cuts, or freeze raises for the next year.  It was explained there would be a hiring freeze and that everything was being done to avoid any layoffs, and potential fundraising dollars were grouped into three categories: Highly Likely, Somewhat Likely, or Low. 

The staff opted for raise freezes and found some additional ways to save.

As the budget planning process for the following year continued it was announced that enough savings were captured and factoring highly and somewhat likely fundraising dollars to bring the organization into the following year in the black, salaries and hiring were frozen, but $20,000 had been reserved for equity adjustments because some recent hires were brought on at a lower salary than their previous positions and compared to their equals in the organization they were not were they should be.

Three months later there were layoffs.

A year later when the 990 became available after filing with the IRS it was discovered that the $20,000 that had been reserved went to one person, an executive previously making less than other manager counterparts.  This person had not been hired recently, but had been promoted to the role the previous year.

Case # 2 - During an economic downturn an organization told it's staff that it could not afford to provide raises greater than 4% to anyone.  So after merit increases ranging from zero to 4%, and maybe some case 5% for high performers everyone went about their work.

A year later, after the 990 was filed, it was discovered that the highest level earners had received raises of between 10% and 20%.

What do you think the staffs did in this case or the previous case?  Did the management of these orgs act ethically?

-Ken