The Collaborative International Dictionary of English v.0.48:

Compensate \Com"pen*sate\, v. i.
   To make amends; to supply an equivalent; -- followed by for;
   as, nothing can compensate for the loss of reputation.
   [1913 Webster]

The Collaborative International Dictionary of English v.0.48:

Compensate \Com"pen*sate\ (? or ?; 277), v. t. [imp. & p. p.
   Compensated; p. pr. & vb. n. Compensating.] [L.
   compensatus, p. p. of compensare, prop., to weigh several
   things with one another, to balance with one another, verb
   intens. fr. compendere. See Compendium.]
   1. To make equal return to; to remunerate; to recompense; to
      give an equivalent to; to requite suitably; as, to
      compensate a laborer for his work, or a merchant for his
      losses.
      [1913 Webster]

   2. To be equivalent in value or effect to; to counterbalance;
      to make up for; to make amends for.
      [1913 Webster]

            The length of the night and the dews thereof do
            compensate the heat of the day.       --Bacon.
      [1913 Webster]

            The pleasures of life do not compensate the
            miseries.                             --Prior.

   Syn: To recompense; remunerate; indemnify; reward; requite;
        counterbalance.
        [1913 Webster]

WordNet (r) 3.0 (2006):

compensate
    v 1: adjust for; "engineers will work to correct the effects or
         air resistance" [syn: compensate, counterbalance,
         correct, make up, even out, even off, even up]
    2: make amends for; pay compensation for; "One can never fully
       repair the suffering and losses of the Jews in the Third
       Reich"; "She was compensated for the loss of her arm in the
       accident" [syn: compensate, recompense, repair,
       indemnify]
    3: make up for shortcomings or a feeling of inferiority by
       exaggerating good qualities; "he is compensating for being a
       bad father" [syn: cover, compensate, overcompensate]
    4: make reparations or amends for; "right a wrongs done to the
       victims of the Holocaust" [syn: right, compensate,
       redress, correct] [ant: wrong]
    5: do or give something to somebody in return; "Does she pay you
       for the work you are doing?" [syn: pay, pay off, make
       up, compensate]
    6: make payment to; compensate; "My efforts were not
       remunerated" [syn: compensate, recompense, remunerate]