FWIW from the data I've seen (at Google) this isn't really the case. When the guideline for a location increases, salaries are set to the new guideline * whatever the prior performance/tenure/whatever multiplier on top of that guideline was. This is also the case when you transfer to a more expensive location. (A well-tenured senior engineer who transfers from Bangalore to Mountain View won't be set to the minimum salary for L5, but something higher)