Citigroup, under pressure since accepting bailout funds, has found a new way to keep and reward “talent.”

This week it began to issue several million stock options to a quarter of its workforce in a way that they may become extremely lucrative for the employees lucky enough to receive them.

This partly to compensate for the evaporation of the Citi stock share price, which has gone from a high of $56 a few years ago down to $4 a share.

Whats the grand plan? Citi will be issuing one stock option at just above the current price for each unvested share that employees had accumulated.  When (and unless they fail, I don’t really think it is an “if”) the share price climbs, Citigroup employees could see a sharp rise in their 2009 compensation.

The good news is this is that it excludes the top 100 earners at Citi — meaning most of those in the executive suites.

It’s a shame that their shareholders that lost a ton of money due to their reckless actions cannot get the same sweet deal.

Source: To Retain Its Bankers, Citi Offers Option Plan