Same here. The reality is that what company chooses to pay is the minimal amount they can get a candidate to accept for that location.

If the candidate had other better offers, then they can either reject the offer or propose a higher counter-offer. If the company received a counter-offer and chose to accept it, then this amount becomes the new minimal amount.

Over a period of time, if there are enough counter-offers (or rejections), this continues to increase. Since, the two (or however many) locations don't necessarily have the same demand or supply, it's inevitable that some location will end up with much higher compensation than others. It's the nature of free market and why some companies engage/d in hiring collusion (see https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_L...)