Silicon Valley Bank staff handed up to £20m in bonuses
The British arm of Silicon Valley Bank has paid staff up to £20m in bonuses after it was bought by HSBC in a rescue deal.
Payouts to employees were signed off by HSBC, SVB UK’s new owner, earlier this week, according to Sky News – just days after its insolvency was averted by the takeover.
The bonus pool, of £15m to £20m, was described as “modest” by sources familiar with the matter. It was unclear how much had been paid to Erin Platts, the UK bank’s chief executive, or her senior colleagues.
One insider said the awards indicated HSBC’s confidence in the staff at its new subsidiary and its desire to retain them by honouring previously agreed payments.
SVB UK is a profitable business with about 700 employees in Britain, but the actions of its American parent company brought it close to collapse this week.
If it had become insolvent, the bonuses would not have been paid this week, sources said.
Senior executives and other employees have already been negatively affected by the plunging value of the company stock they hold, according to an insider.
In the US, the company’s banking arm has been taken into Government ownership.
Its holding company, SVB Financial Group, has filed for Chapter 11 bankruptcy protection and is looking for buyers for its other assets.
American staff also received bonuses hours before the bank collapsed, according to previous reports.
HSBC, Europe’s biggest lender, swooped in to acquire SVB UK for just £1 in an emergency auction.
The bank was given an exemption from rules that do not allow complicated corporate customers to be housed within ring-fenced banks.
Challenger banks including Oaknorth and The Bank of London had also shown interest in taking over SVB UK.
Jeremy Hunt, the Chancellor, said the takeover had been vital to protecting funds for start-up companies in Britain.
He said: "The UK's tech sector is genuinely world-leading and of huge importance to the British economy, supporting hundreds of thousands of jobs.
"We have worked urgently to deliver on that promise and find a solution that will provide SVB UK's customers with confidence.
"[This] ensures customer deposits are protected and can bank as normal, with no taxpayer support."
Hundreds of tech entrepreneurs had lobbied the Government to ensure that SVB UK did not collapse, warning that its failure would pose an existential threat to the UK industry.