Silicon Valley Bank CEO Greg Becker cashed out stock and options in the weeks leading up to Friday’s collapse, netting him a $2.27 million profit, public filings reveal.
The state of California shuttered SVB on Friday, just two days after the nation’s 16th largest federally insured bank announced that it needed to raise more than $2.2 billion to remain solvent, which sent its stock price plunging over 60% in 48 hours. The Federal Deposit Insurance Corporation took the embattled bank into receivership in what is being described the worst U.S. bank failure since the Great Recession of 2007-2009.
SILICON VALLEY BANK SHUT DOWN BY REGULATORS IN MOST NOTABLE FAILURE SINCE 2008 CRISIS
Becker exercised his stock options before immediately selling them on Feb. 27 as part of a prearranged executive stock sale plan, according to Securities and Exchange Commission filings. He had filed sales as part of that plan as recently as Jan. 26. He also sold stock on Jan. 31 for an additional $1.1 million, though the SEC filing for this sale states that the transaction was conducted to cover a tax liability.
News of Becker’s recent profits comes amid multiple reports that the bank, which mostly served technology workers and venture capital-backed companies, paid out bonuses to employees just hours before the FDIC takeover on Friday. Multiple sources told Axios that the bonuses had been previously scheduled to be disbursed on Friday for work done in 2022. Bonuses for employees working abroad were scheduled for later this month and have yet to be paid out.
SVB achieved financial stardom during the COVID-19 pandemic because major cash deposits from the booming firms increased its deposits from $60 billion in the first quarter of 2020 to over $200 billion in December 2022, the Wall Street Journal reported. Its securities portfolio rose from roughly $27 billion in 2020’s first quarter to approximately $127 billion at the end of 2021.
The fact that most of SVB’s assets were seemingly secure — they were mainly longer-term government bonds — led many investors to feel the bank was secure. The government securities bought by SVB pay a fixed rate, so when market interest rates were raised, a gap began to grow between how much the securities were worth on the open market and what they were valued on the bank’s books. The unrealized losses in SVB’s securities portfolio in December had grown to more than $17 billion, a number expected to grow, as the securities could only be sold at a loss.
The FDIC moved SVB’s remaining assets on Friday to the newly created Deposit Insurance National Bank of Santa Clara. Prior to the collapse, SVB had 17 branches located across California and Massachusetts. At the close of last year, the bank had roughly $209 billion in total assets and approximately $175.4 billion in total deposits.
Reacting to the shocking collapse in a Fox News interview Saturday, billionaire Home Depot co-founder Bernie Marcus said that blame should be placed on the “woke” bank and the Biden administration for its persistent push for financial institutions to prioritize “global warming” over shareholder returns.
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“I think that the system, that the administration has pushed many of these banks into [being] more concerned about global warming than they do about shareholder return,” Marcus told host Neil Cavuto. “And these banks are badly run because everybody is focused on diversity and all of the woke issues and not concentrating on the one thing they should, which is, shareholder returns.”
“Instead of protecting the shareholders and their employees, they are more concerned about the social policies,” he continued. “And I think it’s probably a badly run bank. They’ve been there for a lot of years. It’s pathetic that so many people lost money that won’t get it back.”
