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Silicon Valley Bank’s new acting CEO, Tim Mayopoulos, appointed after the FDIC took over last week, spent much of Tuesday on the phone with key customers, encouraging them to return their money to the bank’s care, with some success.
His message to them: Silicon Valley Bank was fully operational, protected by unlimited FDIC insurance even for new deposits, and all business was functioning normally, as if the bank run on Friday never happened.
During an upbeat call with a “good vibe,” as a person who attended one described it, Mayopoulos made it clear that CEO Greg Becker and CFO Daniel Beck are officially out of SVB but the rest of the bank’s management team remains.
The FDIC said Sunday that “senior management has also been removed” when it announced it would protect all deposits, but did not specify which roles at SVB were impacted and an FDIC spokesperson declined to elaborate, telling Insider instead, “We routinely work with the employees of a failed bank to get it up and running for customers. In this case, Silicon Valley Bridge Bank is a full-service bank.”
Becker was still signing his name to press releases as “CEO” as late as Monday. That same day, the bank’s parent company, SVB Financial, appointed William Kosturos from management consulting company Alvarez & Marsal to operate as its chief restructuring officer and Kosturos has since taken over formal communications.
Retaining staff is one reason the bank is not only operating but is actively seeking new customers, according to people familiar with Mayopoulos’s Tuesday remarks.
The new CEO said one option for the bank may be to not sell itself at all — nor auction off its pieces — but to spin back up and continue operations as a new nationally chartered bank. It is also possible that a group of investors will come in and buy it, and not another bank. SVB is now formally calling itself “SVB Bridge,” according to the people familiar.
Retaining management is, perhaps, a good outcome for the moment for SVB employees who have been cast in a pall of uncertainty since last week. Staff are still reeling and many are angry, according to a recruiter who has worked with SVB and placed hundreds of people there.
No one has been laid off yet, the recruiter said. When the government first took over SVB last week, the bank’s staff was guaranteed 45 days of employment at 1.5x their salary. Since then, the government has shifted to telling everyone at the bank that they will instead keep their jobs at their usual salary, Insider previously reported.
The two main changes for SVB employees, so far, is the government putting an end to the bank’s 401K program and ending stock-based compensation, which could have been as high as 10% of a person’s salary at a 30% discount, the recruiter said. All SVB Financial shareholders, including employees, were not protected when the FDIC took over. And on Friday the holding company declared bankruptcy, Kosturos said. SVB Financial, which is no longer associated with SVB Bridge Bank, is seeking alternatives, such as selling off its businesses like its venture capital firm and its investment bank.
Many workers lost a big portion of their life savings by losing that stock, this recruiter added.
SVB employees now seem to fall into three groups, according to the recruiter, who has spoken with SVB employees in recent days. There are those angry at Becker and looking for new jobs; loyalists eager to pull in new business while reassuring current clients that almost lost it all a week ago; and those who feel to be in a sort of limbo, assigned to working on things like fintech apps, but no longer with any strategic oversight or direction.
Mayopoulos is said to only be selectively answering questions on calls with clients, and he keeps them short — no more than 20 minutes, another person who attended one of the calls said. One question he has not answered is how long the bridge bank will operate and have no limits on the deposits the government is now guaranteeing.
For employees, this means their jobs are preserved for now, while their future is as uncertain as that of SVB Bridge.
Are you a current or former employee of Silicon Valley. Bank? Do you have a tip or insight to share? Contact the reporter Darius Rafieyan (by email at drafieyan@insider.com or by text or encrypted messaging at 714-651-1367).
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