Connect with us

Hi, what are you looking for?


Thousands of SVB staffers to receive $25 million in payroll stuck in stock purchase program

About 4,000 employees of Silicon Valley Bank are set to receive $25 million that has been trapped for weeks in an employee stock purchase program, according to the Federal Deposit Insurance Corp.

An FDIC spokesperson confirmed to NBC News on Tuesday that the money will be remitted to employees “shortly.” The payouts won’t require tapping the government’s deposit insurance fund that was used to save SVB depositors, because it concerns funds held by the bank prior to its collapse.

The agency’s move ends a month and a half of uncertainty for employees of the failed lender after government regulators shut it down March 10 and backstopped all SVB deposits days later.

But regulators’ efforts to wind down the bank, whose assets Raleigh, North Carolina-based First Citizens Bank purchased on March 27, didn’t initially address the employee stock purchase plan that had allowed SVB employees to contribute as much as 10% of their earnings (up to $25,000) into a fund that would buy the company’s stock at a discount.

Per the plan’s schedule, the fund is tapped every six months to purchase stock for the participating employees. SVB was in the middle of those purchase times when it collapsed, at which point its publicly traded stock ceased to exist.

First Citizens’ purchase of SVB assets didn’t include the ESPP funds. Instead, those payroll contributions have sat 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 weren’t authorized to speak publicly about internal compensation matters, told NBC News that ambiguity over the fate of staffers’ ESPP contributions fueled worries that they had lost that money for good. One of the employees said he has over $20,000 locked up in the program.

Some current staffers raised concerns in recent weeks to the human resources department. 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, without giving a timeline, according to communications seen by NBC News.

First Citizens declined to comment Tuesday.

The FDIC spokesperson acknowledged that the handling of the ESPP funds has been a lingering issue since it stepped in to resolve the second-largest bank failure in U.S. history. (Bloomberg earlier reported the agency’s planned move on Tuesday.)

All three employees said they had yet to receive internal communications about the resolution as of Tuesday afternoon, although the FDIC spokesperson said they would be notified soon.

“I’m skeptical until I actually have those funds,” one of the SVB staffers said Tuesday, but added, “If that holds true, I am absolutely relieved to say the least.”

This post appeared first on NBC NEWS

    You May Also Like


    On the surface, index and stock options are very similar. Still, there are some differences that traders should be aware of. Understanding these differences...

    Latest News

    The FBI was not forthcoming with the Trump, Biden and Pence classified documents during a House Intelligence Committee briefing last week, and lawmakers still...

    Editor's Pick

    iBASIS and Sequans have been selected by Actility to meet its delivery schedule for eSIM and iSIM iBASIS and Sequans now considered frontrunners in...


    American Airlines is getting rid of its traditional frequent flyer award chart as the carrier moves toward dynamic pricing for mileage redemptions, the latest shift in its lucrative AAdvantage...

    Disclaimer:, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2024