Unnamed sources claim that Silicon Valley Bank UK (SVB UK), which was saved by the large international bank HSBC for just one pound, has given millions of pounds in employee incentives.
According to a March 18 Sky News story citing anonymous sources, payments to SVB UK employees and top executives were approved “early this week” by HSBC UK Bank, the company that bought SVB UK on March 13 for one British pound ($1.22 USD).
According to the sources, the amount given to Erin Platts, CEO of SVB UK, “or her top colleagues,” was “unclear,” but they defined the bonus pool as “small” and said it was “between £15m and £20m” (about $18.26 million and $24.35 million USD).
While the insiders reportedly pointed out that the bonuses wouldn’t have “been paid this week” had SVB UK “not been bought solvently,” one insider reportedly “pointed out” that the shares that top executives and other staff owned had been “made worthless” by SVB UK’s close call.
According to another insider, the incentive payments were intended to honor “already negotiated payments” in an effort to “retain important workers” and were “a show of HSBC‘s confidence in the talent pool” at SVB UK.
In an earlier tweet on March 17, SVB UK expressed its “pleasure” at joining HSBC after 14 years of fostering and expanding “the UK’s innovative economy.”
This comes after the Bank of England stopped SVB UK’s operations on March 10 due to its “limited presence” and lack of “critical functions” sustaining the financial system, according to the bank.
SVB UK will “cease making payments or receiving deposits,” according to the statement, as the BoE plans to ask the court to put SVB into a “Bank Insolvency Process.”
While seeking purchasers for its other assets, SVB’s US banking division has been taken over by the government, and its holding company, SVB Financial Group, filed for Chapter 11 bankruptcy on March 17.
According to William Kosturos, chief restructuring officer at SVB Group, the Chapter 11 procedure will enable SVB Financial Group to “preserve value as it considers strategic alternatives for its prized businesses and assets.”
Kosturos stressed that the autonomous teams that run SVB Capital and SVB Securities will continue to run those businesses.