|Scrutiny over pay is intensifying as banks like Merrill prepare to dole out bonuses even after they have had to be propped up with billions of dollars of taxpayers' money. While bonuses are expected to be half of what they were a year ago, some bankers could still collect millions of dollars.|
Critics say bonuses never should have been so big in the first place, because they were based on ephemeral earnings. These people contend that Wall Street's pay structure, in which bonuses are based on short-term profits, encouraged employees to act like gamblers at a casino - and let them collect their winnings while the roulette wheel was still spinning.
"Compensation was flawed top to bottom," said Lucian Bebchuk, a professor at Harvard Law School and an expert on compensation. "The whole organization was responding to distorted incentives."