Does one Citi trader deserve a $100 million bonus?

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Americans have devoted $351 billion of their hard-earned tax dollars to bailing out Citigroup (C). No doubt if you hold a credit card with Citi and are paying 30 percent interest rates on your balance, you must be glad that Citi is still around to collect that interest. If you're like me and hold Citi stock, you've watched most of the value of that investment evaporate as Citi lost $28 billion in 2008.

But Citi does not exist for its customers or its stockholders. Your $351 billion -- split between $45 billion in TARP money being converted into common shares which dilutes current holders, plus $306 billion in loan loss guarantees -- has been given to Citi because it has a few dozen employees who need eight figure bonuses.

And one of those is going for a nine figure bonus -- $100 million. The name of the lucky fellow? Andrew Hall, the director of Citigroup's energy-trading division, Phibro LLC. As you pay more money at the gas pump, Hall is "earning" his $100 million bonus.

The question is whether the government (which owns an estimated 36 percent of Citi) has any power to cap that bonus. And resolving that issue will fall into the bailiwick of one Kenneth Feinberg, the comp cop. Feinberg's job is to "strike the right balance around [the bailout recipient companies'] need to retain talent, reward performance, and protect the taxpayers' investment."

I am going to suggest that Feinberg's job here is easy -- if Citi earns a cash profit in 2009 (as opposed to the paper profits it has been reporting) -- then Citi can use that profit to pay back whatever part of the $351 billion in taxpayer money it can afford.

If after repaying that $351 billion, there's $100 million left over to pay Hall, then I will walk down to Citi's headquarters and eat my Citi stock certificates on national TV. Otherwise, Hall can take his "talent" to some other company with the cash to pay him the $100 million he thinks he deserves.

What do you think?

Peter Cohan is president of Peter S. Cohan & Associates. He also teaches management at Babson College. His eighth book isYou Can't Order Change: Lessons from Jim McNerney's Turnaround at Boeing. He owns Citi shares.

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