overcompensate

[oh-ver-kom-puhn-seyt]
verb (used with object), overcompensated, overcompensating.
1.
to compensate or reward excessively; overpay: Some stockholders feel the executives are being overcompensated and that bonuses should be reduced.
verb (used without object), overcompensated, overcompensating.
2.
to exhibit psychological overcompensation; strive to overcome a sense of inferiority through overt, opposite behavior: The aggressive patient may be overcompensating, and be a profoundly shy person beneath the façade.

Origin:
1760–70; over- + compensate; as term in psychology, perhaps back formation from overcompensation

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Based on the Random House Dictionary, © Random House, Inc. 2014.
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World English Dictionary
overcompensate (ˌəʊvəˈkɒmpɛnˌseɪt)
 
vb
1.  to compensate (a person or thing) excessively
2.  (intr) psychol to engage in overcompensation
 
over'compensatory
 
adj

Collins English Dictionary - Complete & Unabridged 10th Edition
2009 © William Collins Sons & Co. Ltd. 1979, 1986 © HarperCollins
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Example sentences
They intensify blue, causing red and green to overcompensate in the image.
We overcompensate and try to be extra-available in all sorts of ways.
However, the method used to compute payment rates tended to overcompensate for
  inflation.
Unless compensation proposals explicitly considered that phenomenon, they might
  overcompensate some property owners.
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