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by crumpets 2445 days ago
No, value to the business only sets the ceiling. The floor comes from the labor supply side of the market. (i.e. can the company find qualified people willing to do it at X rate)
2 comments

Hiring and compensation decisions have enough of a principal-agent problem that value to the business doesn't even set a firm ceiling.
Value to the business is the floor more often than not. Plenty of business activities simply don't generate much money in the first place, with salaries capped accordingly. Albeit not the typical tech company or F500.