Reviewing Chris Hayes' Twilight of the Elites, Tim Lee says that a better and more functional version of meritocracy in action could be found by looking at Silicon Valley rather than Wall Street.
I would say that Silicon Valley offers a better and more functional model of inequality than Wall Street precisely because it's not a meritocracy, and in fact is so clearly not a meritocracy that it works better. Consider the richest software entrepreneur in all the land, Bill Gates. Nobody denies that Gates is successful because he was a skilled computer programmer and a shrewd businessman. But nobody thinks the moral of the Microsoft story is that Bill Gates is the best computer programmer in human history. By the same token, everyone loves the story of how David Choe became a multimillionaire by accepting Facebook shares instead of money for painting the walls of their office but nobody thinks the moral of that story is that Choe is the greatest painter in the world. In the tech world you have people who've made important contributions without getting rich (Linus Torvalds) you have products that are commercially successful even though nobody really thinks they're very good (iTunes) and you have products that ultimately failed in the marketplace (Xerox Alto, Palm OS) but are worthy of recognition for advancing the state of the art in important ways.
Steve Jobs founded the most successful company in the world, but ended his life nowhere near the richest man in the tech game because he made much worse personal financial decisions than some other people. Oddly, he seems to have made more money off Pixar/Disney than he ever did off Apple.
Viewed from the perspective of an ex ante commitment to meritocracy, these all look like giant bugs in the system. But I think they're actually features of a healthy ecosystem. Ability and hard work and good judgment are more or less rewarded in an all-things-equal sense such that it makes sense for people to try to do a good job, but it's just obvious that a hazy veil of contingency hands over the whole thing. Wall Street, by contrast, has done the best job of any American sector at ensuring that meritocratic values are upheld. By definition, the people who are "the best" at financial manipulation are the people who make the most money. It's a total disaster, but it's very much a meritocratic one.