Bank / Credit Union

Congress grills SVB, Signature Bank execs over bank collapse, compensation

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May 17, 2023

Greg Becker, CEO of Silicon Valley Bank alongside Scott Shay, chairman of Signature Bank, recently appeared before Congress to answer questions both on the failure of their banks and their compensation. In particular, Senators questioned the representatives if they planned to return any of their compensation they gained prior to the collapses, according to a Yahoo! Finance report.

The Senate Banking Committee asked Becker if he planned to give back money to the Federal Deposit Insurance Corp. and if he knew about SVB's troubles when he sold stocks a few weeks before its failure. Becker was non committal and said that he was not in possession of non public information when he sold the stocks. When asked if he deserved his $1.5 million bonus he received from the board, he said that the board, "believed it was fair and I believe they were accurate."

Elizabeth Warren, Democrat Senator from Massachusetts, questioned Becker on the $40 million he had earned over the last five years.

"The collapse of your bank cost the FDIC fund $20 billion," she said. "I want to know about basic accountability. How much of the $40 million you earned from loading up SVB with risk are you planning to return to FDIC?"

Warren has introduced legislation that would give the FDIC authority to claim CEO compensation up to five years prior to the banks' failures.

Shay, in turn, also said he didn't plan to give his compensation from Signature Bank to the FDIC.

When Senators questioned Becker about his role in SVB's downfall, he claimed that the failure were due to events beyond his control, such as aggressive interest rates hikes, social media rumors and an intense bank run.

Republican Senator John Kennedy of Louisiana said to Becker, "You made a really stupid bet that went bad. This was bone deep down to the marrow stupid. You put all your eggs in one basket, and unless you were living on the international space station, you could see that interest rates were rising."

Democratic Senator Sherrod Brown of Ohio and chairman of the banking committee said, "Your version of events..sounds a lot like the dog ate my homework. You have blamed pretty much everyone else."