NEW YORK – The heads of two big US banks that failed badly in March appeared before the Senate Banking Committee on Tuesday and answered questions about why their institutions failed and what regulators could have done to stop it.
In addition to questions about why these banks failed, senators used the hearing to address executive pay and whether such entrepreneurs are being rewarded more for short-term gains — such as rising stock prices — than for the long-term benefits of their companies. Period to ensure the health of.
The heads of Silicon Valley banks and Signature Bank collected millions of dollars during their tenures until their banks went bankrupt, most of the compensation in the form of company shares. Those shares are worthless now, but the CEO made millions from the anticipated sale of his shares before the banks failed.
Sen. Sherrod Brown, chairman of the committee, addressed executive compensation to start the hearing.
“They were paying premiums literally hours before regulators seized their properties. For people in Ohio and across the country, this is sickeningly familiar,” Brown said. “For most Americans, the lack of accountability on Wall Street matches their entire experience with our economy. Workers face the consequences; executives go home quietly.
Greg Baker, the former CEO of Silicon Valley Bank, received severance pay worth about $9.9 million in 2022, also selling shares in the company weeks before bankruptcy. Signature Bank CEO Joseph DePaolo also sold shares in the years leading up to the company’s bankruptcy.
DePaolo did not appear before the Senate on Tuesday due to health problems; Instead, the co-founder of Signature and the president of the bank agreed to testify.