Anecdotally, companies which I've worked with set bands based on local market conditions and allocate you within the bands on a roughly cross-company performanc

Anecdotally, companies which I've worked with set bands based on local market conditions and allocate you within the bands on a roughly cross-company performance basis. e.g. 10 levels of engineers, level 3 engineers in NYC and Bogota are roughly comparable in skill level but the ones in NYC make quite a bit more. Mostly for internal sensibilities of fairness, it is generally the case that e.g. level 3 engineers in Bogota working at the company would earn above-market for their skillset in Bogota. The companies tried to strike a balance between "We want to pay them equitably with our employees in high-cost US locales.", "We want to retain them versus other offers.", and "We do not want to give them golden shackles by e.g. paying grossly more than any employer in their low-cost locale." This assumes functioning remote cultures and regular, full-time, full-class employees. Consultants obviously do things differently. (And any consulting client which made reference to Nagoya FTE rates in a negotiation with me would have gotten a firm handshake and non-specific pleasantries immediately.)