SVB Financial Group said it agreed with the Justice Department to tweak the financial terms and benchmarks of a plan to pay millions of dollars in bonuses to executives at a subsidiary.
(Bloomberg Law) — SVB Financial Group said it agreed with the Justice Department to tweak the financial terms and benchmarks of a plan to pay millions of dollars in bonuses to executives at a subsidiary.
Bonus benchmarks for nine leaders of SVB Capital — the capital and investment arm of the bankrupt company — are now more “substantive and focused,” James Bromley of Sullivan & Cromwell said at a Tuesday hearing. The total payout for executives at lower performance benchmarks was reduced by $500,000, Bromley said, while the top level of payouts was increased by the same amount.
The changes come after the Justice Department’s bankruptcy watchdog said the plan’s performance benchmarks were vague and not rigorous. The “true purpose” of the initial $12.5 million in bonuses was to maximize SVB Capital’s sale value by keeping the executives in place, the department said.
SVB Financial Group, the former parent of Silicon Valley Bank, filed Chaper 11 in March. It’s exploring a sale of SVB Capital, its primary remaining asset. The US Trustee, part of the DOJ, oversees bankruptcies on behalf of all creditors, and can object to a companies’ restructuring plans.
The case is SVB Financial Group, Bankr. S.D.N.Y., No. 23-10367, 8/22/23.
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