Elizabeth Warren is among the furious politicians demanding SVB execs return their salaries, bonuses, and $84 million in stock sale profits

“While you and company executives appear to have been successful in cashing out before the crash, SVB’s customers were not as lucky,” she wrote Tuesday, arguing execs need to pay for “facilitating a near-economic disaster.” 

The 40-year old tech-focused Silicon Valley Bank or SVB failed dramatically last week due to what Mark T. Williams, a Boston University professor and former bank examiner at the Federal Reserve, told Fortune was “a colossal failure in asset-liability risk management.” Warren said Tuesday that executives shouldn’t be rewarded with lucrative pay packages after their mismanagement forced the Federal Deposit Insurance Corporation (FDIC) to backstop depositors in order to “protect the economy” from “contagion” that was threatening other regional banks. 

She requested Becker respond to a series of questions about his bank’s risk management strategy, his previous lobbying efforts against banking regulations, and bonuses that were paid out during the bank’s downfall.

SVB spent more than $2.2 billion on compensation for executives and rank and file employees last year, SEC filings show. Becker was also awarded a total compensation package of $9.9 million in 2022 alone, including a $1.5 million cash bonus for improving the bank’s profitability, and since 2021, SVB execs have raked in $84 million from stock sales, CNBC reported Tuesday. 

Multiple key executives also reported major stock sales last week before SVB blew up, including Becker, who sold $3.6 million in stock, and CFO Daniel Beck, who sold $575,000. Those sales would have been prohibited under new insider selling rules issued by Securities and Exchange Commission Chair Gary Gensler in December that will take effect next month. The regulations make it so execs must wait 90 days between filing plans to sell shares and when the sales are executed.

In her Tuesday letter, Warren went on to question if Becker and other execs knew that SVB was in trouble at the time of the planned stock sales.

“Rather than making the safety and soundness of your bank your primary priority, you spent the weeks in the lead up to SVB’s failure securing yourself $3.6 million by selling off company shares,” she wrote. 

California Rep. Ro Khanna said Saturday that he also believes there should be a “clawback” of the money SVB executives made from stock sales in recent weeks, adding in a Monday tweet that it is a reminder of the “need to impose strong financial regulations on banks.” 

“Whatever his motives, and we should find out, that $3.6 million should go to depositors,” he wrote.

Just hours before regulators took control of SVB Friday, the company also paid out its annual bonuses, CNBC reported, citing unnamed sources within the bank. Employees at SVB, who have long been some of the country’s highest-paid bankers, pulling in over $250,000 on average in 2018, were also offered 45 days of employment post-collapse at 1.5 times their salary by the FDIC.

“Shareholders and executives at banks like SVB should not benefit from either taxpayer dollars or the help of the FDIC to secure buyers without being compelled to submit to regulations that amount to more than a slap on the wrist,” Khanna said of the bonuses. 

Warren also questioned SVB’s Becker, who served on the board at the Federal Reserve Bank of San Francisco, over his efforts to roll back parts of the Dodd-Frank Wall Street Reform and Consumer Protection Act—which was designed to prevent bank runs and stabilize the financial system.

In 2015 testimony to the U.S. Senate committee Becker said that SVB and other mid-sized banks were facing “significant burdens” that reduced their ability to provide proper banking services to clients because of Dodd-Frank. He complained that the regulations—including liquidity coverage requirements meant to ensure banks have enough cash on hand to give depositors in a worst-case bank run scenario—would cause his “compliance costs to increase dramatically.”

The CEO added that his bank engaged in “low risk activities” and did not “present systemic risks” to the financial systems. His efforts proved fruitful for the bank, as some of the regulations that Becker spoke out against were thrown out or changed in the following years.

“You have nobody to blame for the failure at your bank but yourself and your fellow executives,” Warren wrote of Becker’s efforts to thwart regulation. “You lobbied for weaker rules, got what you wanted, and used this opportunity to abdicate your basic responsibilities to your clients and the public.”