Earlier quoted context omitted.
So people are paid according what they spend, not what they produce? That doesn't sound very sensible to me.
We thought about paying independent of location. If we pay everyone the same we would have either a huge burn rate or we could never hire great people from the Bay Area. Another consideration is that people's costs are strongly related to where they live. But I can also see the case for paying everyone the same. But I think other remote friendly companies are doing the same as us, this video shows how Travis CI think…
I think what's more important is that their competing offers from local companies will necessarily be higher, so assuming they're worth the higher price, you have to pay it.