[alexeichemenda]

Some companies agree with that and some don’t. For companies that disagree with you statement, the rationale is really simple: the company is ready to pay top $ because cost of life is high. They know that the rent you’ll pay is high hence the money. They’re reducing their net profit (ebitda) to lay the high salary you need to pay your rent. They do that because your rent in SF is what it is. But for those companies, there’s no way they reduce their ebitda for you to profit off that.

The other companies, who pay on value of output, will agree with that statement. As far as I know, most companies fall under cost of life approach rather than value of output.

[hackissimo123]

> most companies fall under cost of life approach rather than value of output.

I think most companies fall under "what's the minimum we can get away with?"

[belorn]

I would think that most companies pay based on what is needed to retain employees and keep churn rates down to acceptable rates. Location should not matter beyond what the manager in charge or salaries think it matters for the employee willingness to stay at the company, and as such it depends.

[alexeichemenda]

Managers, probably. Companies + investors = less likely.

>what is needed to retain employees and keep churn rates down to acceptable rates

Ultimately, this value depends on the location. Assuming identical salaries, it is more expensive to retain someone for 5 years in NY than in Nebraska, because the person in Nebraska making $200k+ lives like royalty, and whereas NY would be a different story.