Per Bloomberg
First Republic paid dozens of employees over $10 million nearing to the collapse, with one of them earning $35 million
5/25/2023
Recent findings revealed that before the collapse of First Republic, the firm still paid dozens of its employees over $10 million each. One of their employees, which remained unnamed, earned $35 million.
First Republic was seized by regulators and sold to JPMorgan Chase & Co., and so far, its unnamed employee, who was paid $35 million, made more than even its new boss, JPMorgan CEO Jamie Dimon, who had been running the largest bank in the nation for 17 years.
The person who reportedly made $35 million wasn't even a top executive.
Regulatory filings revealed that employees received compensations averaging $310,000 each in 2022. However, this depended on their role, performance, and client portfolio size.
Compared to JPMorgan, First Republic reportedly paid double the norm. The latter reportedly offered incentives for the following.
- Arranging home loans
- Amassing deposits
- Growing wealth-management portfolios
In December 2022, First Republic said it would lose $19 billion if it sold its loan portfolio. JPMorgan, the new owner of the bank, told employees that they would be given an update regarding their employment status and what would happen by the end of the month.
When First Republic was in hot water, numerous banks came to the rescue, sending $30 billion in cash to stop the panic from spreading. Some of the largest banks that made $5 billion in uninsured deposits included JPMorgan Chase & Co., Citigroup Inc., Bank of America Corp., and Wells Fargo & Co.
Other banks contributing $2.5 billion included Morgan Stanley and Goldman Sachs Group Inc. There were also five other banks that gave $1 billion, including U.S. Bancorp, PNC Financial Services Group Inc., Truist Financial Corp., Bank of New York Mellon Corp., and State Street Corp.
In mid-March, it was reported that the US government was trying to orchestrate a rescue of First Republic Bank with the help of the nation's biggest banks. Shortly before that, First Republic said that they had over $70 billion in unused liquidity to fund operations.
See flow at unusualwhales.com/flow.
Other News:
- List of banks that rescued First Republic Bank by sending $30 billion
- The US government is trying to orchestrate a rescue of First Republic Bank, FRC, with the aid of the nation’s biggest banks
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