MSR can pay well, but top flight universities (in CS at least) do actually pay pretty well. But MSR is in some ways almost a university in and of itself. It ha

MSR can pay well, but top flight universities (in CS at least) do actually pay pretty well. But MSR is in some ways almost a university in and of itself. It has extremely good talent and is as competitive as many faculty departments. The appeal of MSR (to me) is from the research opportunities afforded to them. The product of MSR researchers is still mostly papers. In other words, they are still researchers and research (papers) is what they want to produce. They serve on conference committees, the works. It's easy to go from MSR to academia and back again. The professors who give up a big salary are those who could take the skills they developed and apply it in a more industrial capacity, where their innovations are not public or published. This is worth a lot more to a company. Taking highly motivated and intelligent people and having them solve the hardest problems at the biggest companies in such a way (i.e., secretly) that gives the company a competitive advantage is going to pay quite well.