Sweden is worst place work imho.
Even the janitor thinks he is on the same level as you and your half of your money goes for the education of his kids.
Would you subscribe to a Goverment which averages out your genetic gains due to high IQ for average life?
This happened at our company too and really engineers do respond to this.
When this happened to one guy on friday, next week on Monday everyone took ownership of their work and started organising better and collaboration shot up.
And to the OP of this thread. No one here will tell you anything that works because that would be politically incorrect and receive backslash from the receivers od this treatment.
On this forum, majority are engineers who don't know anything about management. So any pro management shit will be downvoted to oblivion by labour class engineers.
You are at a wrong place asking for advice op!
This forum only helps with job hoping/getting company to pay you more/ negotiating less work hours.
He can't monetize the bug because that would be illegal!
This is granted by the law.
So why pay? Paying for bug is useless here.
Sending him to prison and making an example out of him so that others do not break into your system and make a joke of your engineering team/security team is better for their morale.