It definitely makes sense to not hire for a certain period to see how this salary bump impacts the company as a whole.

Anecdotal mention: https://open.buffer.com/layoffs-and-moving-forward/

Fast Hiring at that salary level is probably why SV startups burn through money so quickly.

I doubt they will see major performance boosts with the salary increase. If they don't, it indicates the team is already working optimally OR salary increases don't always translate to increased performance. If they do, do they then start asking themselves why performance was so average (relatively)?