Employees of Silicon Valley Bank received year-end bonus hours before FDIC took over on Friday

On March 12, CNBC quoted people familiar with the matter as reporting that a few hours before the takeover of the Federal Deposit Insurance Corporation (FDIC), Silicon Valley Bank (SIVB) issued the year-end bonus to American employees on Friday (March 10) as scheduled. This payment is for the work completed in 2022, and was already being processed a few days before the bank failed.

Interpretation of this information:

The recent news about Silicon Valley Bank (SIVB) issuing bonuses to its American employees just hours before the takeover of the Federal Deposit Insurance Corporation (FDIC) has raised eyebrows in the financial world. According to sources familiar with the matter, the bank had already processed the payments for work done in 2022 a few days before it failed. The timing of the bonus issuance has piqued the interest of many, and there are speculations that it indicates that the bank may have known about its financial troubles much earlier than it let on.

It is not uncommon for companies to pay bonuses to their employees, especially at the end of the fiscal year. In this case, SIVB issued bonuses to its American employees on March 10, 2023, which was the scheduled time to do so. However, it is the timing of the bonus issuance that has people talking. Just a few hours later, the FDIC took over the bank’s operations, citing concerns over its financial health.

The fact that SIVB had already processed the bonuses a few days before its collapse has led many to question whether the bank’s management knew about the financial troubles facing the institution for some time. The timing also raises ethical concerns as it appears that the bank was more concerned with rewarding its employees than ensuring the financial stability of the institution.

It is important to note that the issuance of bonuses is not illegal and is a common practice in many companies. However, the interpretation of the bonus issuance in this case will depend on whether SIVB management knew beforehand that the bank was in financial trouble. If they did, it raises questions about their integrity and whether they were trying to hide the bank’s true state of affairs.

In conclusion, the issuance of bonuses by SIVB to its American employees just hours before the FDIC takeover has raised ethical and financial concerns. The timing of the payments suggests that the bank may have known about its financial troubles much earlier than it let on, and raises questions about the level of transparency in the bank’s management.