Bonuses Outlive Profits That Spawned Them

Merrill Lynch lost more money this year than it earned in the previous 20 years.

That comparison puts an exclamation mark on arguments for overhauling Wall Street compensation patterns, which hand executives and some employees massive rewards for short-term gains that can prove ephemeral.

Using Merrill Lynch as a case study, a recent New York Times story lays out the connections between outsize compensation and excessive risk-taking in great detail. Little of the information in the story is new, and its analysis pretty much parallels arguments put forward by various policy makers and set forth (in much drier language) in a "Best Practices" report issued this past July by the Institute For International Finance.

Still, the Times piece helps flesh out the trail of causation - and responsibility - that culminated in the global financial meltdown.