HSBC approves multi-million-pound bonuses for Silicon Valley Bank UK staff
Jessie A Ellis Mar 20, 2023 08:59
HSBC UK Bank, which acquired Silicon Valley Bank UK for just one pound, has reportedly approved multi-million-pound bonuses for its staff and senior executives. The bonus pool, totaling between £15m and £20m, was described as "modest" by insiders and was said to be in honor of previously agreed payments and to retain key staff.
On March 10, the activities of Silicon Valley Bank UK were terminated by order of the Bank of England (BoE), which said that the bank did not provide any "critical services" in support of the financial system. Once this event occurred, HSBC purchased the bank for the very cheap price of one pound. But, just a few days following the purchase, HSBC gave its approval for bonuses of several millions of pounds to be given to workers and top executives of Silicon Valley Bank UK.
It was emphasized by the sources that the bonuses would not have been paid out if Silicon Valley Bank UK had not been purchased in a financially sound manner. The exact amounts of the bonuses that were given to Erin Platts, CEO of Silicon Valley Bank UK, and her senior colleagues are unknown at this time; however, insiders have emphasized that the payments were a signal of HSBC's confidence in the talent base at Silicon Valley Bank UK as well as an effort to retain key staff.
As a result of the BoE's announcement that it intends to place Silicon Valley Bank UK into a "bank insolvency procedure," the bank was required to cease making payments and accepting deposits. Prior to this, Silicon Valley Bank UK was instrumental in the growth and support of the innovative economy in the UK. In the meanwhile, the United States banking arm of Silicon Valley Bank has been taken over by the government. In the meantime, Silicon Valley Bank's parent company, SVB Financial Group, has filed for protection under Chapter 11 bankruptcy while it searches for purchasers for its other assets.
SVB Group's chief restructuring officer William Kosturos stated that the Chapter 11 process will allow the group to "preserve value" as it evaluates strategic alternatives for its prized businesses and assets. Kosturos stated that the group will be able to "preserve value" if it goes through with the process. Notwithstanding this, both SVB Capital and SVB Securities will continue to do business as usual, both under the direction of their own separate teams.
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