As investment banks prepare for another round of public flogging over pay and bonuses, it is almost ironic that much of the criticism will focus on a single number that is so misleading as to be virtually meaningless: the compensation ratio.

The "comp ratio" (in Wall Street jargon) is a rough measure of pay and bonuses at an investment bank expressed as percentage of its net revenues. Before the crisis, a well-managed investment bank would post a comp ratio in the mid- to high 40s, although the comp ratio at many banks was frequently north of 50% or even 60%.