WASHINGTON — In a bruising Senate Banking Committee hearing, former Silicon Valley CEO Greg Becker took most of the heat from both sides of the aisle about the compensation he received while making decisions that contributed to the bank's failure.
Becker, along with Signature Bank's former President Eric Howell and Signature co-founder and former Chairman Scott Shay, took sharp questions from Republicans and Democrats alike about their compensation packages they received for leading the failed banks. Curbing excessive executive compensation has been one of
The hearing was the first time the executives have spoken publicly about
It was the first of two days of testimony for the trio. Becker, Shay, Howell and former CEO of First Republic Bank Michael Roffler will appear before the House Financial Services Committee on Wednesday.
Throughout the hearing, Becker attempted to place the blame for Silicon Valley Bank's failure on a number of factors, mostly the speed at which depositors withdrew their money and the pace of the Federal Reserve's interest rate increases.
"I do not believe that any bank could survive a bank run of that velocity and magnitude," Becker said. The failure of the bank was "personally and professionally devastating, and I am truly sorry for how this has impacted SVB's employees, clients and shareholders."
But lawmakers — even Republicans, who have
"Mr. Becker, you made a really stupid bet that went bad," said Sen. John Kennedy, R-La. "This was bone deep, down in the marrow, stupid. You put all your eggs in one basket, and unless you were living on the international space station you could see that interest rates were rising and you weren't hedged."
A number of lawmakers, including Warren, Sen. Thom Tillis, R-N.C., and Sen. Katie Britt, R-Ala., among others, pressed Becker and the Signature executives on bonuses and other compensation for their roles at the banks. While Republicans fell short of calling for specific legislation, their ire toward Becker and the other executives of failed banks could make them welcome allies in what has, to this point,
Sen. Elizabeth Warren, D-Mass., reiterated that she is working on a bipartisan bill that would give regulators more ability to claw back executive compensation for the leaders of failed banks, one of several bills that would bolster regulators' toolbox.
Sen. Sherrod Brown, the chairman of the panel, also has an executive compensation bill in the works but has yet to introduce it. There will likely not be a markup on executive compensation legislation until he does so.
Silicon Valley Bank took particularly sharp criticisms for bonuses paid to employees hours before the bank's failure. Fed Vice Chairman for Supervision Michael Barr
Becker, who repeatedly said that his compensation and bonuses were determined by the bank's board, eventually said he believed that the compensation he received last year was reasonable.
"From the standpoint of that compensation, that's determined by the board of directors," Becker said. "And so, I know they believed it [was] fair, and I believe that they were accurate."
Several lawmakers also asked if Becker would return any of the compensation he received. Becker said that he would "cooperate with the regulators as they do a review."
