SVB’s key employee incentive plan draws objection from U.S. trustee

By Sarah Lizee

Olympia, Wash., Aug. 17 – SVB Financial Group’s motion seeking approval of a key employee incentive plan drew an objection from Region 2 U.S. trustee William K. Harrington, according to documents filed Wednesday with the U.S. Bankruptcy Court for the Southern District of New York.

The company wants approval to pay $6.4 million to $12.5 million in bonuses to nine senior level executives of SVB Capital over the next 45 days.

Harrington said that while the debtor has characterized the bonuses as part of an incentive program, the true purpose is to keep the participants in place so the value of the business can be maintained and sold.

“While maximizing value to the estate is an important goal in bankruptcy restructurings, retaining insiders by paying them large bonuses under the guise of an incentive plan that is primarily retentive is not an allowable way to meet this goal,” the U.S. trustee said in his objection.

The financial services and bank holding company is based in Santa Clara, Calif. The company filed bankruptcy on March 17 under Chapter 11 case number 23-10367.

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