Merrill Lynch has shown the world that it's possible to get rich from failure, at least on Wall Street, with its announcement yesterday that after a loss of $2.2 billion last quarter following an $8.4 billion write-down, its former CEO Stanley O'Neal is walking away with more than $160 million. The investment bank said O'Neal and the board had "both agreed that a change in leadership would best enable Merrill Lynch to move forward and focus on maintaining the strong operating performance of its businesses."

Yeah right, that is how they rewarded someone who plunged the bank into its biggest loss for years by exposing it to bad deals in subprime mortgages, credit derivatives and leveraged loans.

Let's cut to the chase here. Instead of sacking him and forcing him to take responsibility for driving his managers into doing risky deals, they have allowed him to "retire" which will let him keep the $US48 million he was paid last year when he was doing the work to get those dodgy deals up and running. And as a bonus, he keeps the deferred compensation in the form of unvested shares worth $US90 million.

According to some compensation experts, it's all good because there was no severance package. "In my view, to have given O'Neal anything more than he was already due would have been to subvert the principle of pay-for- performance. If he were performing, he wouldn't have exited. And if he was a poor performer, he doesn't deserve a cent extra,'' says Bloomberg's Graef Crystal.

Come off it!! This guy got $160 million-plus for producing a financial disaster and analysts are now warning that Merrill Lynch could write down another $4 billion in the upcoming quarter? On top of the $8 billion in value of collateralized debt obligations and subprime mortgage-backed securities it's already written down.

Brett Arends from TheStreet.com asks the obvious question: what would they pay a really good CEO?

The interesting question now is who's next? Charles Prince, the chairman and chief executive of Citigroup and Jimmy Cayne, the chief executive of Bear Stearns must be getting nervous.

Still, don't expect investment analysts to bag Merrill Lynch for this, they're all in on this. It's one rule for Wall Street, and another for everyone else.