According to a report filed to SEC, Gregory Becker, Silicon Valley Bank CEO, they sold bank shares worth over two million dollars late last February. The stocks sold by Becker were part of a program that He filed in late January.
Media reports indicate that before its collapse, Silicon Valley Bank (SVB) granted annual bonuses to all eligible employees, and its CEO exercised stock options for cash.
In January, another SEC filing report revealed that Becker had liquidated about one million dollars worth of bank stocks to address tax obligations. The filings further indicated that CEO Gregory Becker primarily sold stocks worth between two hundred and eighty-five dollars and three hundred and two dollars.
According to another report by CNBC, Silicon Valley Bank CEO Becker, and fellow Silicon Valley executives, Daniel J Beck and Michelle Draper had sold over four million dollars worth of bank shares before the collapse of the bank.
Silicon Valley Bank Rushes to Pay Employee Bonuses
In a recent report by Axios, on March 10th, moments before Silicon Valley Bank was taken over by The Federal Deposit Insurance Corporation, CEO Gregory Barker rushed to pay the annual employee bonuses.
Although the timing of the payments coincided with the bank’s collapse, it is a mere coincidence. The bonuses were planned for March 10th and intended for 2022.
As resident employees received their bonuses, international employees were requested to await payment later during the same month. It, however, remains to be determined whether or not scheduled payments will be successful given The Federal Deposit Insurance Corporation has taken over Silicon Valley Bank.
The agency suggested a few employees be retained for up to a month and a half to provide needed assistance to facilitate a smooth transition for the bank.
Is a Bailout Likely for Silicon Valley Bank?
The recent Silicon Valley Bank crisis has attracted more attention to the bank since it was the first largest bank to collapse ever since the end of the financial crisis of 2008. The situation has sparked the attention of stakeholders now advocating for a government bailout during these dire times for the bank.
Among the stakeholders is Bill Ackman, a billionaire investor. Ackman has called for the government to intervene and bail out Silicon Valley Bank, citing the potentially catastrophic consequences for the economy if the bank fails.
The investor argued that several large venture capital-backed firms rely on SVB for their financial needs, and its collapse could have a ripple effect throughout the entire economy.
In a statement regarding the potential for another private bank to bail out Silicon Valley Bank, Ackman expressed his doubts, citing the actions regulators took in response to JPMorgan’s bailout of Bear Stearns.
He pointed out that it was highly unlikely that another bank would be willing to take on the risk and responsibility of bailing out Silicon Valley Bank, especially given the regulatory scrutiny of such a move.
Ackman thought the potential risks and repercussions of bailing out SVB would be too great for any other private bank to consider. He suggested that Silicon Valley Bank would need to seek alternative funding sources or find a way to resolve its financial troubles without the assistance of another private bank.
