SVB Pays Large Bonuses to All Employees Just Before Closure

Controversy Over the Timing of CEO Share Sale

[Asia Economy Reporter Oh Su-yeon] As the fallout from the Silicon Valley Bank (SVB) bankruptcy spreads worldwide, it has been confirmed that SVB paid large bonuses to employees just before its closure.

On the 11th (local time), the U.S. online media Axios reported, citing multiple sources, that SVB paid annual bonuses to all employees a few hours before the California Department of Financial Protection and Innovation decided to shut down the bank on the 10th.

Logo at the headquarters of Silicon Valley Bank [Photo by Yonhap News]

Axios pointed out that the bonus payment was originally scheduled for that day, coincidentally the same date the Federal Deposit Insurance Corporation (FDIC) was appointed as the bankruptcy receiver. Some employees' bonus payment dates were at the end of this month.

The exact amount of bonuses paid by SVB that day has not been disclosed. The U.S. economic media CNBC reported that the amounts varied from $12,000 to $140,000 (approximately 15.88 million to 185.22 million KRW). These bonuses were paid for last year's work performance.

Earlier, on the 27th of last month, it was revealed that Greg Becker, SVB Chairman and CEO, sold 12,451 shares of the parent company SVB Financial, sparking controversy. The sale proceeds amounted to $3.6 million (approximately 4.7628 billion KRW).

SVB’s stock price plummeted after it sent a shareholder letter stating it would raise capital by issuing more than $2 billion (approximately 2.646 trillion KRW) in shares to offset losses from bond sales, leading to the bankruptcy. There are criticisms that if Becker knew about SVB’s capital raising plan when he reported his share sale plan to financial authorities on January 26, it would constitute insider trading.