[paulstovell]

Assuming $80k is market rate in the new location, if this person was paid $120k it creates another kind of risk: the person might be disgruntled and hate the job, but never leave, because they aren’t going to get $120k anywhere else.

As an employer the ideal is to pay at or slightly above the market. Enough to make money a non-issue, but not so much that people who secretly hate you still work for you.