[zaroth]

It depends how you measure the cost to the employer. When you're talking about increasing employee compensation in the $100k - $150k range, I look at the total cost to end up with $1.00 in the employee's savings account. The point is that increasing compensation is extremely inefficient in the $100k - $150k range. That's why, for example, US engineers getting raises in that pay range will often find it doesn't change much in their living situation. "I got a $10k raise" but really take-home pay just increased $4500.

Often times paying out compensation in cash like this is just too expensive. It's a weird concept that the cost of cash is a curve mostly dictated by tax rates. When the IRS is taking 55% at certain points in the curve, you get much bigger bang for the buck by offering other benefits, like maximizing expense reimbursements. (phone, internet, qualified commuting expenses, food & entertainment, etc.)