Laura Izurieta, former chief risk officer at Silicon Valley Bank, walked away with more than $7.1million last year after hashing out a lucrative exit deal
The former chief risk officer at busted bank SVB walked away with over $7.1million last year, filings show.
Laura Izurieta’s unexplained exit from Silicon Valley Bank in April 2022, leaving it without a chief risk officer for eight months, has raised suspicions among financial analysts conducting a postmortem on the failed financial institution.
Izurieta, 62, presided over a spree of bond-buying in 2020 and 2021 that left the bank vulnerable to just the kind of frenzied bank run which toppled it last week.
But she managed to exit the company unscathed before it all came crashing down – and even made out with $7,151,136.
In a Securities and Exchange Commission (SEC) filing, SVB said it approached Izurieta about terminating her job early last year – after she sold $4,176,354 of her stock in the company on December 6, 2021.
The filings said that her dismissal was ‘without cause’ meaning it was not for any kind of misconduct, but did not offer any other explanation.
She ended her role as Chief Risk Officer on April 29, hashing out an exit deal with the board earning her $512,500 base pay, a $450,000 bonus, $457,192 severance and an extra $1.5million to stay on as a consultant for five months while the bank looked for a successor.
Her unexplained exit from SVB in April 2022 left it without a chief risk officer for eight months, a role required by federal regulations
SEC filings showing the bank’s risk committee met 18 times in 2022, more than double the seven meetings it held the previous year
The bank had seven of its 11 board members join the committee, while other committees had a maximum of five members
Izurieta ended her role as Chief Risk Officer on April 29, hashing out an exit deal with the board earning her $512,500 base pay, a $450,000 bonus, $457,192 severance and an extra $1.5million to stay on as a consultant for five months
Izurieta, who worked for the bank for almost six years, has not announced another role on her LinkedIn page.
She lives in a four-bed, $2million home in Arlington, Virginia, with her husband and two sons in their 20s. She also owns a three-bed lake house in Mineral, Virginia.
Izurieta previously served as an executive vice president at Capital One bank and has a background in mortgage lending.
SVB spent the remainder of 2022 without a chief risk officer, a role required by federal regulations for financial institutions handling $50billion or more.
Izurieta remained as a consultant at the bank from April 29 to October 1.
All the while, the Federal Reserve steadily increased interest rates, devaluing the low-yielding, long-dated bonds SVB had invested in with its customers’ deposits.
Villanova University Business School professor Noah Barsky spotted signs that the bank’s board was becoming increasingly worried about risk, judging by its disclosures.
Barsky spotted SEC filings showing the bank’s risk committee met 18 times in 2022, more than double the seven meetings it held the previous year.
It had seven of its 11 board members join the committee, while other committees had a maximum of five members.
And with Izurieta gone, the committee had no chair and no financial risk experts.
‘Intriguingly, the risk committee excludes its most qualified director — Thomas King, a former Barclays investment banking CEO, who joined SVB’s board in 2022,’ Barsky wrote in Forbes earlier this month.
‘He ostensibly has far greater substantive financial services experience than the committee comprised of a Napa vineyard owner, a retired healthcare CIO, a former U.S. Treasury undersecretary, venture capital partners and consulting firm heads.’
And with Izurieta gone, the committee had no chair and no financial risk experts. Izurieta has not been accused of any wrongdoing in the bank’s demise
Izurieta lives in this four-bed, $2million home in Arlington, Virginia, with her husband and two sons in their 20s. She also owns a three-bed lake house in Mineral, Virginia
Despite the apparent internal turmoil, the bank tried to put on a brave face to investors.
It hid the losses on its bonds by classifying them as ‘held to maturity’ – indicating that they would not be for sale any time soon, and so any unrealized losses did not need to be disclosed in its public financial reports.
The average bank with at least $1billion categorized only 6% of its debt as ‘held to maturity’ at the end of 2022. But SVB put 75% of its debt in this category, according to a report by wealth management firm Janney Montgomery Scott.
The move kept the veil drawn but left them with dwindling cash reserves, just as the Silicon Valley startups who made up most of their customer base were starting to draw down on their checking accounts, as the economy weakened.
It is unclear whether Izurieta had a hand in this decision. She ended her role as chief risk officer on April 29, 2022, but stayed on as a consultant until October 1.
The bank appointed a new officer, Kim Olson, in January 2023.
SVB’s 2023 shareholder proxy statement said ‘the Company initiated discussions with Ms. Izurieta about a transition from the Chief Risk Officer position in early 2022.’
‘Accordingly, the Company and Ms. Izurieta entered into a separation (without cause) agreement pursuant to which she ceased serving in her role as Chief Risk Officer as of April 29, 2022 and moved into a non-executive role focused on certain transition-related duties until October 1, 2022.
‘Such duties included supporting and advising on our Risk organization and ongoing initiatives and on the search for an anticipated new Chief Risk Officer.
‘Given the significance of the position of the Chief Risk Officer, it was important to the Company that the transition be facilitated in a manner that supported continuity and retention within the Risk organization as we searched for a new Chief Risk Officer.’
Izurieta has not been accused of any wrongdoing in the bank’s demise.
DailyMail.com spotted Silicon Valley Bank’s failed CEO Greg Becker in Maui last week after he was fired amid the collapse of the bank. He’s been accused of lying and misrepresenting SVB’s precarious position to investors
Izurieta did not respond to DailyMail.com’s several attempts for comment.
But its CEO Greg Becker and CFO Daniel Beck have been accused of lying and misrepresenting SVB’s precarious position to investors, in a civil class-action lawsuit filed in a California federal court on Monday.
Becker’s attorney James Kramer told DailyMail.com: ‘I’m confident Greg conducted himself appropriately at all times.’
Chandra Vanipenta, a 51-year-old software engineer, is the lead plaintiff in the lawsuit against the collapsed bank and its leaders.
The complaint accuses Becker and Beck of ‘false and misleading statements’ to investors in their official filings with the Securities and Exchange Commission (SEC).
It says their 2021 reports ‘did not disclose the risk that future interest rate hikes posed to the Company’s business, despite the Fed signaling that it might raise interest rates in the future, and was certainly prepared to do so in the event of rising inflation.’
Vanipenta told DailyMail.com that he filed the legal complaint to ‘vent’ and ‘express my anger’, accusing Becker of ‘lying’.
