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SVB Reportedly Paid Hefty Bonus to Employees on Day of FDIC Takeover

CC0 / / Dollar banknotes
Dollar banknotes - Sputnik International, 1920, 13.03.2023
Hours before the Silicon Valley Bank's (SVB) collapse on March 10, its employees received their hefty annual bonuses.
Even though the Silicon Valley Bank found itself between a rock and a hard place on Friday, after concerned investors withdrew a staggering $42 billion from its coffers, it nonetheless paid out annual bonuses to eligible US employees, Axios has learned from multiple sources.
The SVB, one of the top 20 US commercial banks operating since 1983, spiraled into a capital crisis and collapsed on March 10, making it the second biggest bank failure since the 2008 financial crisis.
According to sources, the California-based bank routinely disbursed employee bonuses on the second Friday of March. This year, the date coincided with the bank's takeover by the Federal Deposit Insurance Corporation (FDIC).
While the amount of the bonuses is unclear, the US press cites Glassdoor – a website where current and former employees anonymously review companies – as saying that other SVB bonuses have ranged from about $12,000 a year for associates to around $140,000 for managing directors.
A property managment representative gestures while asking reporters to clear the entrance area to Silicon Valley Bank in Santa Clara, Calif. - Sputnik International, 1920, 13.03.2023
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Bonuses for employees in some other countries, which were scheduled for later in March, haven't yet been paid, according to the media.
It was also reported that some SVB employees were emailed by the FDIC on Friday: they were offered employment with the remnant organization for the next 45 days. All in all, the bank had over 8,500 employees at the end of 2022.
Reportedly, the employees would be compensated 1.5x times their normal salaries. For their part, hourly workers would receive 2x their normal wages for overtime, as per the US press.
Meanwhile, during his Monday speech, US President Joe Biden made it clear that the management of the SVB would be fired. "If the bank is taken over by FDIC, the people running the bank should not work there anymore," the president said.
Dollar banknotes - Sputnik International, 1920, 13.03.2023
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He also called for a "full accounting" of what exactly led to the shutdown of the financial institution and "why those responsible can be held accountable."
"In my administration, no one is above the law," Biden emphasized. "And finally, I must reduce the risk of this happening again."
It turned out that the SVB had no risk assessment head for nine months, while the bank's European risk officer appeared to be more focused on multiple diversity efforts amid soaring inflation and central bank interventions.
The Biden administration is seeking to calm the public by protecting American depositors. On Monday, the president declared the US banking system "safe" and vowed stiffer bank regulation, but financial experts warn that the situation is still fragile and the risk of the domino effect after the SVB collapse is still on the table.
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