4 ms·

Sure they could. To put it in perspective, thousands of companies are unable to pay their employees and vendors this week due to the SVB collapse. It does not

Sure they could. To put it in perspective, thousands of companies are unable to pay their employees and vendors this week due to the SVB collapse. It does not seem unreasonable that SVB employee bonuses for "great job done in 2022" should have been delayed given the clear evidence on Thursday that the bank was imploding.

danpalmer 4y ago
The perspective is not lost on me, I just think it's completely unrealistic on multiple fronts: it's a tiny fraction of the money, it's executed on a very different timeline and potentially not possible to stop (certainly not easy, HR may not even talk to treasury), and it may be against their contracts. In jobs like this bonuses are also not just "great job" money, they're a predictable part of compensation that people depend on.
- ssss11 4y ago
  Sorry but it’s as simple as a directive to the person who clicks “Pay Now” to not do that yet. A predictable part of compensation is being paid your regular wage on time and for many clients of SVB this is probably not possible this week coming. They should have halted the bonuses.
  - danpalmer 4y ago
    It's not always that simple. Making several thousand payments totalling as much as $100m is not "clicking a button". The process of making those transfers could be days or even weeks long. Payroll processes and the actual transacting involved typically take at least a few days.
    - deepsun 4y ago
      I clicked that "Pay Now" button in my business. Nothing really that complex there, once the amounts are calculated (usually by automated programs). The rest is just regular ACH transfers, which take 2 business days to clear.
    - JumpCrisscross 4y ago
      > process of making those transfers could be days or even weeks long Every payroll processor worth their salt has a big red abort button. Worst case: funds hit flagged and are then reversed.
    - thanksgiving 4y ago
      Screw that. If the recipient of the bonus is CXO level or higher, I’d say the government has a duty to claw back this money.
      - danpalmer 4y ago
        For that I would agree! They're directly responsible for this mess. However almost every bonus is not a CXO bonus, and I think clawing those back would be the wrong decision, and could be quite harmful to many.
  - shadowgovt 4y ago
    Why?
    - candiodari 4y ago
      No reason at all, obviously after bankruptcy is declared contractual obligations to pay mean nothing until the courts decide on what they mean ... which is never 100%.
- dehrmann 4y ago
  Yeah. HR had most likely started the final bonus payout process before they knew about the bank's situation. This was just a coincidence of timing.
  - coldtea 4y ago
    This surely takes "charitable intepretation" to a whole new level!
    - tssva 4y ago
      Since the article itself states that the payout of the bonuses was scheduled for March 10th in advance of the current situation it doesn't seem to. I got my bonus for 2022 paid out on March 3rd. Everyone in my company knew the bonus payout date months ago.
  - wise_young_man 4y ago
    It always is a coincidence isn’t it. Isn’t that unfortunate.
- mbreese 4y ago
  > and it may be against their contracts Those contracts are with a company that doesn’t exist anymore… so I’m not sure that’s a good argument. I get that this is part of the compensation that people rely on (I’ve seen Christmas Vacation), but it’s a really bad look. Paying out bonuses right before your company is taken over by the Feds is a horrible PR image. Regardless of if it is the right thing to do or not.
  - dylan604 4y ago
    >Those contracts are with a company that doesn’t exist anymore the company existed when the payment was made though, so why would your comment anything at the time of the payouts?
- npunt 4y ago
  I appreciate the complexity of the unwind, and that many employees may not have had a direct hand in the risk that SVB accrued, but I think there's a bigger picture at play. Banks are supposed to be one of the bedrocks upon which the economy rests and they are given certain privileges (like access to low interest rates ordinary people cannot get) as part of that role. Its clear the financial sector needs to have an extremely close eye on it to not cause all sorts of destruction across the economy, which it still manages to do pretty regularly out of a fun mix of short-termism, stupidity, and greed. So from a signaling perspective, if the org is sitting on a lot of risk and employees may have benefitted during the accrual of that risk, shouldn't they also face consequences? Wouldn't that cause each employee in a bank to pay some more attention to the fundamentals of the org, to put pressure on any situation where large risk accrual happens? Wouldn't that cause the internal structure of banks to change so that more eyes were on these large risk accrual moments, because talented people wouldn't join unless they knew their livelihoods weren't at risk by one bad decision? Regulations can't be the only form of pressure for banks to not fuck up.
  - scns 4y ago
    This might be the best comment regarding the financial system i have read to date.
  - VagueMag 4y ago
    In the U.S. there used to be a system called "double liability" where bank shareholders could be assessed up to the par value of their stock for money needed to make depositors whole in the event of a failure.
- TomSwirly 4y ago
  > I just think it's completely unrealistic on multiple fronts: Somehow, it's always unrealistic, and somehow, these scenarios always repeat. > it's a tiny fraction of the money, No, allowing people to steal is a moral hazard no matter how much money it is. Suppose I steal a $1000 TV from WalMart, and use the argument that this is a tiny fraction of their profits. No one would buy that. So why should we buy that when it's orders of magnitude more money?
- dragonwriter 4y ago
  > HR may not even talk to treasury. HR, especially in places where they don’t talk to treasury, may have the power to request for payments to be made but they aren’t likely to have the ability to approve or authorize payments.
FireBeyond 4y ago
"in retrospect, we have significant doubts about the job you did in 2022".

danpalmer 4y ago

The perspective is not lost on me, I just think it's completely unrealistic on multiple fronts: it's a tiny fraction of the money, it's executed on a very different timeline and potentially not possible to stop (certainly not easy, HR may not even talk to treasury), and it may be against their contracts. In jobs like this bonuses are also not just "great job" money, they're a predictable part of compensation that people depend on.

ssss11 4y ago
Sorry but it’s as simple as a directive to the person who clicks “Pay Now” to not do that yet. A predictable part of compensation is being paid your regular wage on time and for many clients of SVB this is probably not possible this week coming. They should have halted the bonuses.
- danpalmer 4y ago
  It's not always that simple. Making several thousand payments totalling as much as $100m is not "clicking a button". The process of making those transfers could be days or even weeks long. Payroll processes and the actual transacting involved typically take at least a few days.
  - deepsun 4y ago
    I clicked that "Pay Now" button in my business. Nothing really that complex there, once the amounts are calculated (usually by automated programs). The rest is just regular ACH transfers, which take 2 business days to clear.
  - JumpCrisscross 4y ago
    > process of making those transfers could be days or even weeks long Every payroll processor worth their salt has a big red abort button. Worst case: funds hit flagged and are then reversed.
  - thanksgiving 4y ago
    Screw that. If the recipient of the bonus is CXO level or higher, I’d say the government has a duty to claw back this money.
    - danpalmer 4y ago
      For that I would agree! They're directly responsible for this mess. However almost every bonus is not a CXO bonus, and I think clawing those back would be the wrong decision, and could be quite harmful to many.
- shadowgovt 4y ago
  Why?
  - candiodari 4y ago
    No reason at all, obviously after bankruptcy is declared contractual obligations to pay mean nothing until the courts decide on what they mean ... which is never 100%.
dehrmann 4y ago
Yeah. HR had most likely started the final bonus payout process before they knew about the bank's situation. This was just a coincidence of timing.
- coldtea 4y ago
  This surely takes "charitable intepretation" to a whole new level!
  - tssva 4y ago
    Since the article itself states that the payout of the bonuses was scheduled for March 10th in advance of the current situation it doesn't seem to. I got my bonus for 2022 paid out on March 3rd. Everyone in my company knew the bonus payout date months ago.
- wise_young_man 4y ago
  It always is a coincidence isn’t it. Isn’t that unfortunate.
mbreese 4y ago
> and it may be against their contracts Those contracts are with a company that doesn’t exist anymore… so I’m not sure that’s a good argument. I get that this is part of the compensation that people rely on (I’ve seen Christmas Vacation), but it’s a really bad look. Paying out bonuses right before your company is taken over by the Feds is a horrible PR image. Regardless of if it is the right thing to do or not.
- dylan604 4y ago
  >Those contracts are with a company that doesn’t exist anymore the company existed when the payment was made though, so why would your comment anything at the time of the payouts?
npunt 4y ago
I appreciate the complexity of the unwind, and that many employees may not have had a direct hand in the risk that SVB accrued, but I think there's a bigger picture at play. Banks are supposed to be one of the bedrocks upon which the economy rests and they are given certain privileges (like access to low interest rates ordinary people cannot get) as part of that role. Its clear the financial sector needs to have an extremely close eye on it to not cause all sorts of destruction across the economy, which it still manages to do pretty regularly out of a fun mix of short-termism, stupidity, and greed. So from a signaling perspective, if the org is sitting on a lot of risk and employees may have benefitted during the accrual of that risk, shouldn't they also face consequences? Wouldn't that cause each employee in a bank to pay some more attention to the fundamentals of the org, to put pressure on any situation where large risk accrual happens? Wouldn't that cause the internal structure of banks to change so that more eyes were on these large risk accrual moments, because talented people wouldn't join unless they knew their livelihoods weren't at risk by one bad decision? Regulations can't be the only form of pressure for banks to not fuck up.
- scns 4y ago
  This might be the best comment regarding the financial system i have read to date.
- VagueMag 4y ago
  In the U.S. there used to be a system called "double liability" where bank shareholders could be assessed up to the par value of their stock for money needed to make depositors whole in the event of a failure.
TomSwirly 4y ago
> I just think it's completely unrealistic on multiple fronts: Somehow, it's always unrealistic, and somehow, these scenarios always repeat. > it's a tiny fraction of the money, No, allowing people to steal is a moral hazard no matter how much money it is. Suppose I steal a $1000 TV from WalMart, and use the argument that this is a tiny fraction of their profits. No one would buy that. So why should we buy that when it's orders of magnitude more money?
dragonwriter 4y ago
> HR may not even talk to treasury. HR, especially in places where they don’t talk to treasury, may have the power to request for payments to be made but they aren’t likely to have the ability to approve or authorize payments.

FireBeyond 4y ago

"in retrospect, we have significant doubts about the job you did in 2022".