On Friday, regulators shut down Silicon Valley Bank in the 2nd largest banking failure in U.S. history.
Economic Collapse: Depositors Conduct RUN On Silicon Valley Bank—2008 All Over Again?
Did SVB know the financial institution was on the verge of being seized by the Federal Deposit Insurance Corporation?
Multiple sources reportedly said Silicon Valley Bank “paid out annual bonuses to eligible U.S. employees” hours before Friday’s takeover,” Axios reports.
What an interesting coincidence?
The bonuses were supposedly for work completed in 2022 and scheduled for March 10th, the day SVB collapsed.
NEW: Silicon Valley Bank paid out bonuses just hours before seizure https://t.co/X3DV8ES9Xh
— Dan Primack (@danprimack) March 11, 2023
*SILICON VALLEY BANK PAID OUT BONUSES AHEAD OF FDIC SEIZURE: AXIOS pic.twitter.com/uUaumiY1qJ
— Investing.com (@Investingcom) March 12, 2023
The bonuses were for work done during 2022, and were previously scheduled to be disbursed on March 10. That date ultimately coincided with the bank’s takeover by the Federal Deposit Insurance Corporation.
- Bonuses for employees in some other countries were scheduled for later in the month, so those haven’t yet been paid.
An unknown number of SVB employees were emailed by the FDIC on Friday evening, offering them employment with the remnant organization for the next 45 days.
Sources claim that SVB depositors were engaged in a classic run on the bank in the light of the collapse.
Could this be the first sign of an economic collapse like the one in 2008 when Lehman Bros and Bear-Stearns collapsed?
Economist and Marco Mavens CEO Stephanie Pomboy warned of a “2008-style financial crisis” after SVB’s collapse Friday.
The Santa Clara, California-based bank has historically paid employee bonuses on the second Friday of March, said the people, who declined to be identified speaking about the awards. The payments were for work done in 2022 and had been in process days before the bank’s collapse, the sources said.
This year, bonus day happened to fall on SVB’s final day of independence. The institution, in the throes of a bank run triggered by panicked venture capital investors and startup founders, was seized by the Federal Deposit Insurance Corporation (FDIC) around midday Friday.
On Friday, SVB CEO Greg Becker addressed workers in a two-minute video in which he said that he no longer made decisions at the 40-year-old bank, according to the people.
The size of the payouts couldn’t be determined, but SVB bonuses range from about $12,000 for associates to $140,000 for managing directors, according to Glassdoor.com.
SVB was the highest-paying publicly traded bank in 2018, with employees getting an average of $250,683 for that year, according to Bloomberg.
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