SVB’s new owner, the FDIC, grants workers 45 days of employment
(Bloomberg) – The Federal Deposit Insurance Corporation added some new employees to its payroll late Friday and hired employees from the defunct SVB Financial Group for at least a few weeks as it serves as a recipient of the collapsed lender.
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The newly formed entity, the Deposit Insurance National Bank of Santa Clara, or DINBSC, sent a letter to employees offering 45 days of employment, according to a copy of the message seen by Bloomberg. After the 45 days, the employees would be fired, the letter said.
The Company and its subsidiaries employed more than 8,500 people worldwide as of December 31st. SVB’s Santa Clara, Calif., headquarters and all branches will reopen Monday, the FDIC said.
Read more: SVB depositors, investors tried to withdraw $42 billion on Thursday
The FDIC wants to incentivize employees to stay with the bank for those 45 days and is offering employees 1.5 times their current salary. Hourly workers who work overtime are paid twice, according to the offer.
The rule is not uncommon, according to the FDIC, the US federal agency that insures deposit products such as savings accounts and money market accounts up to a certain amount.
“It is standard practice for us to ask employees to work with us during the resolution process,” a spokesman for the FDIC said. “It’s one of the first things we do after we’re made a recipient.”
Silicon Valley Bank was seized by regulators on Friday amid a deposit rush and an aborted capital raise. The collapse marks the largest US bank collapse since the financial crisis.
The FDIC is now looking to find buyers for the company’s various businesses in order to return as much of customer funds as possible.
Read more: SVB’s auction block includes VC-focused lenders, Wealth Unit
A higher salary and a possible continued payment of wages, which is regulated over the weekend, put the company’s employees in a difficult position: resign now and look for a new job or stay and hope that DINBSC finds buyers.
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https://finance.yahoo.com/news/svb-owner-fdic-gives-workers-185547112.html SVB’s new owner, the FDIC, grants workers 45 days of employment