I have written on the topic of merit before but wish here to approach the subject from a slightly different angle. That is, how it is related to compensation.

First, merit can never be properly assessed by others since it is an individual affair and the efforts of the individual can never be objectively weighed by outsiders, or compared to the efforts of others.

It might be appropriate here to recall that merit is ascribed to the efforts an individual makes to put to best use the talents and opportunities they have been afforded.

Compensation is never attributable to merit. Instead it is based upon the satisfaction of a desire in the population for which they are willing to pay handsomely. 

This is why an actor or athlete can make 10,000 times as much money as a schoolteacher who labors away diligently at her profession.

The reason this is the case of course is that far more people can perform the work of the schoolteacher while far fewer can perform that of the star actor or athlete.