Om Saturday, CNBC posted an article about the Silicon Valley Bank.
The article reports:
- Silicon Valley Bank employees received their annual bonuses Friday just hours before regulators seized the failing bank, according to people with knowledge of the payments.
- The payments were for work done in 2022 and had been in process days before the bank’s collapse, these people said.
- 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 sources.
Who made the decision?
The article continues:
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.
After its seizure, the FDIC offered SVB employees 45 days of employment, the people said. The bank had 8,528 employees as of December.
A spokesman for the FDIC declined to comment on the bonuses.
There are two sides to this discussion–the employees did earn their bonuses in the prior year and it was customary to pay them at this time, but essentially the taxpayers all over the country were responsible for paying those bonuses. Those are pretty generous bonuses for a business that failed.
On Monday, The New York Post noted that despite what we are being told, the taxpayers will be bailing out the Silicon Valley Bank.
The New York Post reports:
The cost of bailing out two banks that catered to the tech industry will likely be paid by average Americans in the former of more fees, less service and potentially higher taxes — despite President Biden’s pledge otherwise, experts warned Monday.
The dire predictions came as the price of regional bank stocks fell due to fears of further collapses, with trading in more than a dozen of them paused during a massive market sell-off.
The extraordinary rescue announced Sunday night will use the Federal Deposit Insurance Corp.’s Deposit Insurance Fund to make whole all customers of the Silicon Valley Bank and Manhattan’s Signature Bank, which did business with tech startups and the cryptocurrency industry, respectively.
But the fund gets its money in quarterly payments from FDIC-insured banks, which will likely make customers shoulder the burden of any added costs, said William Luther, director of the American Institute for Economic Research’s Sound Money Project.
Hold on to your wallet–President Biden is in the White House.