Just hours before regulators moved in to take control of the failing Silicon Valley Bank, bank employees were given their annual bonuses, according to people with knowledge of the payments.
Historically, employees of the bank have been paid their bonuses on the second Friday in March, according to the sources, who did not want to be identified speaking on the matter. The sources noted that the awards were for performance which occurred in 2022, and the awards had been being processed for days prior to the collapse of the bank.
The sources indicated this year, the bonus day just happened to land on the final day of the bank’s independent operation, and its seizure by the Federal Deposit Insurance Corporation.
The financial institution found itself in the midst of a bank run set off when it was revealed the bank had been forced to sell off various assets at a loss to cover withdrawals, and was seeking investors.
The revelation of the bonus payouts came as it was also revealed the bank’s top leadership had sold over $4.5 million in bank stock prior to the bank’s collapse. Chief Executive Officer Gregory Becker, Chief Financial Officer Daniel Beck, and Chief Marketing Officer Michelle Draper had all sold their shares of the bank’s parent company SVB Financial Group. President Becker had sold over 12,000 shares for $3,578,652.31 on February 26, as CFO Beck sold $575,180 in stocks in a separate transaction on the same day.
Popular among tech companies and high-net-worth individuals, whose high-dollar accounts would not be covered by FDIC insurance, the bank saw a flood of panicked venture capitalists and startup founders seeking to withdraw their funds, when the FDIC moved in and seized the bank at about midday Friday. Some reports said as much as 95% of the bank’s accounts would not be insurable.
Bank CEO Greg Becker released a two-minute video in which he addressed workers Friday, revealing he would no longer be making decisions at the 40 year old bank, according to people who saw the video.
The size of the bonuses paid out was unknown, however according to Glassdoor.com, typical bonuses paid out at the bank would range from roughly $12,000 for associates, to $140,000 for managing directors.
According to Bloomberg, employees made an average of $250,683 for 2018, back when the bank was the highest-paying publicly traded bank.
Following its takeover, the FDIC offered the bank’s employees 45 days of employment. As of December, the bank had 8,528 employees.
