Highlights include Citigroup, Inc. (C), Bank of America Corp. (BAC), Comerica Inc. (CMA), Regions Financial Corp. (RF) and Morgan Stanley (MS).

Citigroup's Frugal but Important Reward to Its Smith Barney Brokers

In light of the company's current share price, receipt of substantial capital infusions from the government, and 5 consecutive quarters of losses, Citigroup, Inc. (C) has come up with a more reasonable approach to reward the top revenue-generating advisers of its Smith Barney brokerage division, in lieu of the 3 trips usually planned.

Moreover, the rewards will be funded from operating revenue of Smith Barney, not from the capital the government has invested. In addition, the rewards will represent nearly an 80% cost saving over some previous recognition programs.

Rising loan losses and defaults as well as write-downs on the value of certain investments, especially those tied to the souring residential real estate have been an Achilles heal for Citigroup and other institutions such as but not limited to Bank of America (BAC), Comerica (CMA) and Regions (RF).

While overspending on bonuses and rewarding lavish trips have caused outcries from most corners, it is easy to forget that the intellectual and/or relationship-generating assets leave financial institutions every night. However, it is important in the current part of the economic cycle to balance recognition and development needs with fiscal prudence.

To that end, Smith Barney's top 500 brokers received $3,000 debit cards (totaling $1.5 million), with the next 500 getting $2,000 debit cards (totaling $1.0 million) and the next $1,000 brokers getting $1,000 (totaling $1.0 million). The $3.5 million in rewards is a far cry from that which John Thain bestowed upon former top managers at Merrill Lynch. Citigroup's reward program goes a long way to help retain brokers at the brokerage unit, given that it is being sold to Morgan Stanley (MS).