First, for those that don't know, new grads get hired at L3, PhDs at L4 (which IMHO is actually a mistake but that's another issue) and there is an expectation of getting promoted to L5 (Senior Software Engineer). There's no set time frame for this. I've known people who stayed L4 for many years and were quite happy. L6+ start to require increasingly extraordinary influence and technical contribution.
> It's hard to get promoted beyond L5 for open source work
I'll clue you in on a dirty little secret: it's hard to get promoted to L6 for anything. This is by design. It's how the company controls costs and maintain retention (by dangling that L6 promotion, possibly for years).
One of the things that Ruth Porat did when she became CFO is lowered the promotion target percentage. This meant less people got promoted at each cycle.
How promotions work is a committee of higher-level engineers (eg L7s consider promotions to L6) and will have 10-15 packets to assess. These will get stack ranked by the committee. If you're above the line you'll get promoted. If you're not, you won't. Ruth's change just made that line a little higher.
As for the pay cut, this requires some context. By the time you reach L5+ the majority of your total compensation comes from equity, both your initial grant (for the first 4 years) and annual refreshes and discretionary grants you get along the way. So less than 50% of your income comes from salary plus bonus.
For those employees who go permanent remote, there is a location-based pay adjustment. SF and NYC are at 100% rate. Other areas at 85-95% of that.
That only applies to the salary plus bonus (since bonus is derived from salary) part of your total compensation. So a 10% cut for L5+ is in reality <5%. You don't save on taxes by moving to San Diego but it is cheaper than the Bay Area. If you move to a no-state income tax state however your net pay can in fact be higher.
So, the argument for no pay cut is you're saving the company money by not having to pay for office space, a desk (etc), free food and so on, all while doing the same job. This seems to be the author's position and I'm certainly sympathetic.
The argument for a pay cut is that your compensation isn't really associated with your output at all and is entirely market-based. For many people not going into the office and being able to live somewhere that isn't the Bay Area is a huge plus so people are willing to give up something for that. Plus you could argue the company doesn't want people going remote who don't really want to by offering the same pay. By lowering your pay slightly it creates a psychological barrier such that only people who really want to do it do so. I'm sympathetic to that argument too.