This comment isn't against you, because you are right that a lot of companies calculate this way. It is also undeniably short sighted. Because value in this case is literally in the eye of the beholder. If they were worth at least million and mission critical, market rate was 100k-200k. Pay 400k-500k. Guarantee employee knows they are valued and no other company would match because the person isn't worth as much to the competitor.

There was an article a few years ago about a Google employee. Competitor interviewed, offered what they thought was a great package around 500k, found out candidate was making 3mil at Google. Failure on the recruiter part not getting that info beforehand, but can understand more senior folks not discussing till the end.