Comment by ironjunkie

except that this doesn't work in a high demand market such as the Bay area right now!

Your old manager may have said that to encourage you to stay, but at the end of the day he will promote whoever needs to be promoted in order for that person not to leave. It is all very simple offer and demand at the end of the day.

I was once in a company where the CEO liked to brag that in this company everyone is fairly paid in regards to their competences. You can guess what happened next, we went to have a couple beers with colleagues one evening and started talking about salaries. We realized that we had salaries that didn't really match what the CEO was pretending. The laws of the market are simply too strong, you will always need to sometime pay someone a lot because of circumstances or because that person had another offer to match.

At the end of the day, companies benefit a lot from information asymmetry (they know everyone's salary, but you know nothing). They can claim a lot of things without you having the ability to verify it.