Employee Compensation and Benefit Plans

12 Months Ended

Dec. 31, 2021

Retirement Benefits [Abstract]

Employee Compensation and Benefit Plans

Employee Compensation and Benefit Plans Our employee compensation and benefit plans include: (i) Incentive Compensation Plan; (ii) Direct Drive Incentive Compensation Plan; (iii) Warrant Incentive Plan; (iv) Deferred Compensation Plan; (v) 401(k) and ESOP; (vi) SVB Securities Incentive Compensation Plan; (vii) SVB Securities Retention Award; (viii) EHOP; (ix) 2006 Incentive Plan; and (x) ESPP. The 2006 Incentive Plan and the ESPP are described in Note 5—“Share-Based Compensation.”

A summary of expenses incurred under certain employee compensation and benefit plans for 2021, 2020 and 2019 is as follows:

	Year ended December 31,
(Dollars in millions)	2021		2020		2019
Incentive Compensation Plan	$	352	$	193	$	144
Direct Drive Incentive Compensation Plan	64		38		37
Warrant Incentive Plan	71		34		15
SVBFG 401(k) Plan	40		30		26
SVBFG ESOP	14		6		4
SVB Securities Incentive Compensation Plan	366		233		107
SVB Securities Retention Award	10		13		12

Incentive Compensation Plan

Our ICP is an annual cash incentive plan that rewards performance based on our financial results and other performance criteria. Awards are made based on company performance, the employee's target bonus level and management's assessment of individual employee performance.

Direct Drive Incentive Compensation Plan

The Direct Drive Incentive Compensation Plan (“Direct Drive”) is an annual sales cash incentive program. Awards are based on sales teams' performance as to predetermined financial targets and other company/individual performance criteria. Actual awards for each sales team member under Direct Drive are based on: (i) the actual results and financial performance with respect to the incentive gross profit targets; (ii) the sales team payout targets; and (iii) the sales team member's sales position and team payout allocation.

Warrant Incentive Plan

The Warrant Incentive Plan provides individual and team awards to those employees who negotiate warrants on our behalf. Designated participants, as determined by the Company, share in the cash proceeds received by the Company from the exercise of equity warrant assets.

Deferred Compensation Plan

Under the Deferred Compensation Plan (the “DC Plan”), eligible employees may elect to defer up to 50 percent of their base salary and/or up to 100 percent of any eligible bonus payment earned during the plan year. Any amounts deferred under the DC Plan will be invested and administered by us (or such person we designate). We generally do not match employee deferrals to the DC Plan. From time to time, we may also offer deferred special retention incentives and employer contributions under this plan to key plan participants. The deferred incentives and employer contributions are eligible for investment in the DC Plan during the retention qualifying period or vesting period.

Voluntary deferrals under the DC Plan were $8 million, $6 million and $7 million in 2021, 2020 and 2019, respectively. The DC Plan overall, had investment gains of $7 million, gains of $8 million and losses of $7 million in 2021, 2020 and 2019, respectively.

401(k) and ESOP

The 401(k) Plan and ESOP, collectively referred to as the “Plan”, is a combined 401(k) tax-deferred savings plan and employee stock ownership plan in which most regular U.S. employees are eligible to participate.

Employees participating in the 401(k) Plan are allowed to contribute up to 75 percent of their pre-tax pay as defined in the Plan, up to the maximum annual amount allowable under federal income tax regulations of $20,500 for December 31, 2021, $19,500 for 2020, and $19,000 for 2019. We match the employee's contributions dollar-for-dollar, up to five percent of the employee's pre-tax pay as defined in the Plan. Our matching contributions vest immediately. The amount of salary deferred, up to the allowed maximum, is not subject to federal or state income taxes at the time of deferral.

Discretionary ESOP and profit-sharing contributions, based on our company performance, are made by us to all eligible individuals employed by us on the last day of the fiscal year. We may elect to contribute cash or our common stock (or a combination of cash and stock), in an amount not exceeding ten percent of the employee's eligible pay earned in the fiscal year. The ESOP and/or profit-sharing contributions vest in equal annual increments over a participant's first five years of

service (thereafter, all subsequent ESOP and/or profit-sharing contributions are fully vested). For 2021, 2020 and 2019, 6,100, 12,094 and 14,442 shares, respectively, were allocated to participants in the ESOP.

SVB Securities Incentive Compensation Plan

Our SVB Securities Incentive Compensation Plan is an annual cash incentive plan that rewards performance of SVB Securities employees based on SVB Securities' financial results. This plan requires employees who exceed certain compensation levels to defer a portion of their compensation, of which, 25% will be settled in the form of restricted stock units and 75% will be settled in the form of cash. The deferred compensation vests over a period of up to five years.

SVB Securities Retention Award

The SVB Securities Retention Award is an incentive award that granted designated SVB Securities employees restricted stock awards and cash after the close of the acquisition of SVB Securities in January 2019. The aggregate amount of the awards was $60 million, of which 50% will be settled in the form of cash and 50% in the form of restricted stock awards. The awards vest in equal annual increments over five years.

EHOP Program

The EHOP is a benefit plan that provides for the issuance of mortgage loans to eligible employees. Eligible employees may apply for either an adjustable rate mortgage (ARM) or a fixed rate loan for their primary residence. The ARM is a 30 year loan and has an initial fixed interest rate for five, seven or ten years after which a floating rate will be set annually. The fixed rate loan program offers a 15 or 30 years loan and the interest rate is fixed for the life of the loan. Applicants must qualify for a loan through the normal mortgage review and approval process, which is typical of industry standards. The maximum loan amount generally cannot be greater than 85 percent of the lesser of the purchase price or the appraised value. The interest rate on the fixed-rate loan is written at SVB Private Bank client mortgage rates and determined at SVB's discretion. Floating rates applied at the end of the fixed-rate period will be reset annually at 12 month LIBOR plus two and one quarter percent. For additional details, see Note 10—“Loans and Allowance for Credit Losses: Loans and Unfunded Credit Commitments.''