CAMBRIDGE, Mass. — In a report just filed with the U.S. court that is overseeing the bankruptcy of Lehman Brothers, a court-appointed examiner described how Lehman's executives made deliberate decisions to pursue an aggressive investment strategy, take on greater risks and substantially increase leverage.

Were these decisions the result of hubris and errors in judgment or the product of flawed incentives?

After Bear Stearns and Lehman Brothers melted down, ushering in a worldwide crisis, media reports largely assumed that the wealth of these firms' executives was wiped out, together with that of the firms they navigated into disaster. This "standard narrative" led commentators to downplay the role of flawed compensation arrangements and the importance of reforming the structures of executive pay.