According to the Federal Deposit Insurance Corp (FDIC), around 4,000 employees of Silicon Valley Bank will receive $25 million that has been trapped for weeks in an employee stock purchase programme, NBC News reports.
On April 25, an FDIC spokesperson confirmed to NBC News that the money will be remitted to employees “shortly.” The payouts won’t require access to the government’s deposit insurance fund that was used to save SVB depositors because it relates to funds held by the bank prior to its collapse.
FDIC’s move ends a month and a half of uncertainty for SVB employees after government regulators shut the failed lender down on March 10 and, days later, backstopped all SVB deposits.
However, regulators’ efforts to wind down the bank - whose assets were purchased by First Citizens Bank on March 27 - reportedly did not initially address the employee stock purchase plan.
The plan had allowed SVB employees to contribute as much as 10 per cent of their earnings (up to $25,000) into a fund that would buy the company’s stock at a discount.
The plan’s schedule reportedly sees the fund tapped every six months to purchase stock for participating employees. SVB was in the middle of those purchase times when it collapsed. At that point, its publicly traded stock ceased to exist.
First Citizens’ purchase of SVB assets reportedly did not include the ESPP funds. Those payroll contributions have instead remained on the balance sheet of the failed lender’s holding company - known as SVB Financial Group - as an “accounts payable” ever since.
Three current SVB employees - who were not authorised to speak publicly about internal compensation matters - told NBC News that ambiguity over the fate of employees’ ESPP contributions had fueled concerns that they had lost that money for good. One of the employees said he has more than $20,000 trapped in the programme.
Some current staffers have reportedly raised concerns in recent weeks to the HR department and bank officials responded last week that they were aware of the situation and were working with SVB Financial Group and the FDIC on a resolution. They did not give a timeline, according to communications seen by NBC News.
First Citizens declined to comment on the situation.
The FDIC spokesperson acknowledged that the handling of the ESPP funds has been a lingering issue since the agency intervened to resolve the bank’s failure.
All three employees told NBC News they had yet to receive internal communications about the resolution, by the afternoon of April 25. The FDIC spokesperson reportedly said they would be notified soon.
“I’m sceptical until I actually have those funds,” one of the SVB staffers said, but added, “If that holds true, I am absolutely relieved to say the least.”
Source: NBC News
(Links and quotes via original reporting)
According to the Federal Deposit Insurance Corp (FDIC), around 4,000 employees of Silicon Valley Bank will receive $25 million that has been trapped for weeks in an employee stock purchase programme, NBC News reports.
On April 25, an FDIC spokesperson confirmed to NBC News that the money will be remitted to employees “shortly.” The payouts won’t require access to the government’s deposit insurance fund that was used to save SVB depositors because it relates to funds held by the bank prior to its collapse.
FDIC’s move ends a month and a half of uncertainty for SVB employees after government regulators shut the failed lender down on March 10 and, days later, backstopped all SVB deposits.
However, regulators’ efforts to wind down the bank - whose assets were purchased by First Citizens Bank on March 27 - reportedly did not initially address the employee stock purchase plan.
The plan had allowed SVB employees to contribute as much as 10 per cent of their earnings (up to $25,000) into a fund that would buy the company’s stock at a discount.
The plan’s schedule reportedly sees the fund tapped every six months to purchase stock for participating employees. SVB was in the middle of those purchase times when it collapsed. At that point, its publicly traded stock ceased to exist.
First Citizens’ purchase of SVB assets reportedly did not include the ESPP funds. Those payroll contributions have instead remained on the balance sheet of the failed lender’s holding company - known as SVB Financial Group - as an “accounts payable” ever since.
Three current SVB employees - who were not authorised to speak publicly about internal compensation matters - told NBC News that ambiguity over the fate of employees’ ESPP contributions had fueled concerns that they had lost that money for good. One of the employees said he has more than $20,000 trapped in the programme.
Some current staffers have reportedly raised concerns in recent weeks to the HR department and bank officials responded last week that they were aware of the situation and were working with SVB Financial Group and the FDIC on a resolution. They did not give a timeline, according to communications seen by NBC News.
First Citizens declined to comment on the situation.
The FDIC spokesperson acknowledged that the handling of the ESPP funds has been a lingering issue since the agency intervened to resolve the bank’s failure.
All three employees told NBC News they had yet to receive internal communications about the resolution, by the afternoon of April 25. The FDIC spokesperson reportedly said they would be notified soon.
“I’m sceptical until I actually have those funds,” one of the SVB staffers said, but added, “If that holds true, I am absolutely relieved to say the least.”
Source: NBC News
(Links and quotes via original reporting)