Silicon Valley Bank gave bonuses to employees just hours before its collapse – zoohousenews.com
- March 18, 2023
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(Natural News) Employees at Silicon Valley Bank received their annual bonuses on Friday, just hours before regulators seized the bank.
The payments were reportedly bonuses for work done over the past year that had been processed in the days leading up to the bank’s collapse. In the past, the bank has paid its employee bonuses every second Friday in March, sources claim.
In other words, it may be a coincidence that employees received their bonuses on the same day the bank collapsed. The Santa Clara, Calif.-based bank was in the midst of a bank run spurred by panicked investors when the Federal Deposit Insurance Corporation (FDIC) seized it around noon on Friday.
The FDIC acts as the receiver, which usually involves liquidating the bank’s assets to repay its customers, including creditors and depositors. In a two-minute video released Friday, the bank’s then-CEO Greg Becker announced to workers that he was no longer making decisions at the bank.
Although the amount of bonuses is unclear, Glassdoor.com notes that bonuses for employees at the bank range from about $12,000 for employees to $140,000 for those who hold executive positions. The bank’s employees earned an average of about $250,000 in 2018, making it the highest-paid publicly traded bank that year.
Bonuses for the bank’s international staff were planned for later in the month and have not yet been paid.
The FDIC emailed some employees at the bank Friday night to offer them temporary jobs. Employees who agree to remain at the failed bank will be paid 1.5 times their usual salary for the next 45 days, while hourly workers will be paid double their normal salary.
An FDIC official told Axios, “Without commenting on salaries, it is our standard practice to ask for salaries [sic] Bank employees to assist with an orderly transition as part of our resolution process.”
The bank, which had more than 8,500 employees as of December and is the 16th largest in the US, collapsed after a 60 percent drop in shares sparked a run on withdrawals in what has been dubbed one of the worst financial institution collapses in history the bank cares about the nation. Silicon Valley Bank controlled $209 billion in total assets at the end of last year and was considered the bank of choice for several Silicon Valley industries and startups.
Executives sold shares in the weeks leading up to the bank’s collapse
Ex-CEO Greg Becker sold $3.57 million worth of company stock just two weeks before the bank collapsed in a so-called pre-planned automated sell-off. On February 27, he sold more than 12,000 shares at an average price of $287.42 each, while CFO Daniel Beck sold 2,000 shares; the share price fell to just under $30 on Friday.
As an FDIC-insured bank, only $250,000 is guaranteed per account at Silicon Valley Bank. However, the bank’s most recent annual report shows that 96 percent of the $173 billion in deposits held there were uninsured.
The FDIC said all insured depositors will have access to their insured deposits, while uninsured depositors will receive an “advance dividend” within the next week.
Meanwhile, the bank’s new government-appointed CEO, Tim Mayopoulos, has appealed to the bank’s high-profile start-up and venture capital clients to put their money back in the bank. He also said he wasn’t sure what the bank’s “exact end state” would be, but listed three possible outcomes: liquidation, sale or recapitalization.
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