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I have no problem with compensating employees for work done in 2022. The problem I might have, and I guess many others, is the incompetence of SVB executives a

I have no problem with compensating employees for work done in 2022. The problem I might have, and I guess many others, is the incompetence of SVB executives and the board of directors, in relation to how they (didn't) handle this particular risk.

phone8675309 4y ago
Some of the work they did in 2022 and before likely contributed to them being unable to handle this risk, so why should the be rewarded for running this bank into the ground before depositors and other creditors are made whole?
- lukeschlather 4y ago
  This doesn't say "executive bonuses." I would not be surprised if SVB employs customer service teller-type-people making $60k/year with an annual $5k bonus, and this headline would be consistent with such people getting their scheduled bonuses paid on time. The headline says nothing about what the compensation level or responsibility of the people getting paid bonuses was.
npunt 4y ago
It seems like a bad way to run a bank if these kinds of large risk decisions (buying ~$80b in 10y bonds at ~1.5%) are solely driven by a few execs and the BoD, while everyone else in the bank is just a drone. If employee comp (yearly and even historic bonuses) was tied to the bank's catastrophic risk levels, I bet you'd see banks restructure their operations to curtail these kinds of catastrophic risk factors. Smart people wouldn't join banks where they didn't have a say in that. Instead, we get short-termism where the longest timeframe people care about is 'this years bonus'. Banking is too important to be that stupid.
- dasil003 4y ago
  I think you're misinterpreting what the GP is saying. It's an organization, and those at the top bear responsibility regardless of how decisions are made internally (and there's no way those executives are making decisions without a huge lift from the rank and file). Sure it's hard to stay on top of everything—executives are human and will make mistakes–but that's why they get paid the big bucks! At the end of the day anything short of full accountability from those at the top is a huge moral hazard and recipe for disaster.
smsm42 4y ago
Most of executive compensation is likely in stock, and by some reports, there were a lot of selling just before the collapse. That would be something worth looking into, and maybe also for some shareholders and SEC to consider suing about.

phone8675309 4y ago

Some of the work they did in 2022 and before likely contributed to them being unable to handle this risk, so why should the be rewarded for running this bank into the ground before depositors and other creditors are made whole?

lukeschlather 4y ago
This doesn't say "executive bonuses." I would not be surprised if SVB employs customer service teller-type-people making $60k/year with an annual $5k bonus, and this headline would be consistent with such people getting their scheduled bonuses paid on time. The headline says nothing about what the compensation level or responsibility of the people getting paid bonuses was.

npunt 4y ago

It seems like a bad way to run a bank if these kinds of large risk decisions (buying ~$80b in 10y bonds at ~1.5%) are solely driven by a few execs and the BoD, while everyone else in the bank is just a drone. If employee comp (yearly and even historic bonuses) was tied to the bank's catastrophic risk levels, I bet you'd see banks restructure their operations to curtail these kinds of catastrophic risk factors. Smart people wouldn't join banks where they didn't have a say in that. Instead, we get short-termism where the longest timeframe people care about is 'this years bonus'. Banking is too important to be that stupid.

dasil003 4y ago
I think you're misinterpreting what the GP is saying. It's an organization, and those at the top bear responsibility regardless of how decisions are made internally (and there's no way those executives are making decisions without a huge lift from the rank and file). Sure it's hard to stay on top of everything—executives are human and will make mistakes–but that's why they get paid the big bucks! At the end of the day anything short of full accountability from those at the top is a huge moral hazard and recipe for disaster.

smsm42 4y ago

Most of executive compensation is likely in stock, and by some reports, there were a lot of selling just before the collapse. That would be something worth looking into, and maybe also for some shareholders and SEC to consider suing about.