It can be argued that not disclosing salaries is a way to suppress wages; an asymmetry of information. Is open salary information where "everyone at the same level gets the same salary, but there's some gotchas" another way to do the same thing?
Their transparent webapp thing[1] is really nice to play with btw, it feels like a no bullshit vibe for newcomers as well as current employees.
It makes me think that these "formulas" will probably not age well with time. They're already at their version 3, which would probably not be a good formula at the early days of the start up and will probably not be a good formula in 3-5 years.
Somehow related, I remember having something like these to rank posts on one of my boards (similar to the weight ranking of HN). I had:
* time influence negatively
* number of upvotes and downvotes in the comments influence positively
* number of heavy posters influence positively
* number of upvotes for the post influencing positively
It was really tricky to tweak, in the end with the website scaling up I was constantly tweaking the formula. I don't think there is a "always work" formula.
What it does do is attract all the people that find those salaries public to be higher than the ones they have now. Im sure they get plenty of applicants on this measure alone.
So, yeah, ti doesn't make much sense in practice. But it's nice to have the numbers open.