What's all the fuss about Citigroup (C) wanting to pay bonuses to top performers so that they don't abandon ship? Obviously you wouldn't want to lose employees that are bringing in big bucks. However, you don't need to take the money from the taxpayers for this.
The answer lies in the question. Simply take the money away from board members and senior managers on down, starting at the top, who are not bringing in noteworthy profits (a CEO bringing in TARP money doesn't count) and balance out the bloated payroll to the degree necessary to keep top staff.
Better to take money from poor performers to pay top performers than go back to the public trough. In addition, any profits the company can generate must be used to reduce debt and stabilize the balance sheet.
One other thing: top earners seeking bonuses should have to disclose how they earned those profits. If these managers have anything to do with the world of high leverage and high risk, then Citi may have an even bigger problem.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I have traded options in Citigroup, all in naked puts.