You can't have a bubble in something you can't resell.
This isn't an argument that salaries are at the correct long term level. I'm just saying that salaries can't have a bubble that "pops" and collapses like asset bubbles do.
A bubble is when you're paying for something based purely on speculation about the future value of that thing, rather than on a rational analysis of the expected future return.
I would wager that Google does not have an internal projection of the value of any engineer showing them to be worth $3.5m over four years; rather, I'd bet that comp decision was made based on an irrational fear of yet another defection from Google to Facebook.
If we were talking tulips, if you purchase at 100 florins, and a year later the bulbs are worth 400 florins in the market, you've made 300 florins profit.
With an employee, if you hire them at a salary of $100k, and a year later, they are worth $400k in the market, you do not receive any of that difference.
edit: A bubble in assets that can be resold can happen because it rational on the small scale to buy into the bubble. Everyone may know it will pop eventually, but people think they can make money and then get out. A bubble in unsellable things like employees can't happen because no one can expect that he will be able to "resell" an employee at a higher price.