Another framing of this is whether companies treat their engineering organizations as a cost center or a profit center. Cost centers suppress salaries as much as possible optimizing the budget. There's little growth within these companies which is why the zero-sum philosophy is passed down to their compensation strategy. Whereas profit centers encourage more and more investment as compounding profits come in from previous dividends. Growth is what powers everything, higher pay has a positive-sum gravitational pull on talent sustaining a flywheel for more profits to come in (hopefully).

All the companies that pay very well such as on https://levels.fyi/2023/ are profit centers encouraging investment in talent, competing for the best across companies because they know its worth it. Each hire even at extremely competitive wages will make back their salary manyfold if they're successful.