This is not only the obvious solution, but a necessary part of the basic idea. I want to keep you from telling $STUFF to a competitor? That $STUFF is valuable?

This is not only the obvious solution, but a necessary part of the basic idea. I want to keep you from telling $STUFF to a competitor? That $STUFF is valuable? Then there's a very good chance the opponent will simply try an buy it. Employment is only one of the many ways they make such a purchase, and so this ends up being a simple supply/demand problem. If I'm serious about keeping $STUFF out of the competitor's hands, I better be paying the people that know $STUFF better than any likely buy price (legal or not). This isn't even for post-employment when the typical non-compete is relevant; it's the same reason you pay your employees enough so they don't take your ideas to a competitor (or regulatory agency). This same problem of having to pay at least some minimum if you want to maintain any loyalty is perhaps best seen with soldiers. Having an important engineer take the ideas for your next project is bad enough, but shorting the pay for soldiers tends to cause things like a "coup" or other "high chance of getting shot" scenario. During the last big budget mess, congress played fast and loose with a lot of stuff, but were able to agree very early into that mess to continue paying the "retainer" for the military's loyalty. ( http://www.politico.com/story/2013/09/government-shutdown-senate-sends-obama-military-pay-bill-97582.html http://www.politico.com/story/2013/09/government-shutdown-se... ) Of course, maybe managers could start to realize that their money is often better spent in R&D or production or sales...