Assuming this is "an employee" and not CEO or someone you report to, use your corporate structure in its intended fashion- draft a memorandum to the CEO, who is

Assuming this is "an employee" and not CEO or someone you report to, use your corporate structure in its intended fashion- draft a memorandum to the CEO, who is typically the sort of person who has to make these decisions, don't spend all day drafting it, and get back to work. According to what you've written, you lead engineering. Unless you're somehow complicit in the deception, you're blameless as long as you pass that information on, because engineering doesn't involve recommendations. I would imagine most CEO's would quietly correct/retract the recommendation, and take up (or not) the issue with the employee. There's your fix right there. If they fail to, that says more about their leadership than a rogue employee does, and either way, probably time to start looking for a move up to somewhere else. 3-4 years is the longest you should be working somewhere without substantial financial reason to stay. The cachet of a long time in a position saturates out at about 3-4 and unless you plan to retire in this position, you'll be in a weaker negotiating position with 5, 10, or 20 years in the same job.