Most employers determine pay based on market analysis. Generally, the employer will pay a consulting firm for a job market analysis that shows pay rates by job

Most employers determine pay based on market analysis. Generally, the employer will pay a consulting firm for a job market analysis that shows pay rates by job function and geo. The employer then performs it's own internal assessment using this data to develop an approach for talent acquisition (base pay, bonus, options, location, market competitiveness, etc). Cost of living adjustments typically isn't a consideration.