That's ridiculous. Most companies can do it. You're just saying you don't want to because you can get away with exploiting employees' aversion to changing jobs. Pretending that greed is "basic math" is just deflection.
Compensation is a Huge lever on earnings. There would certainly be a consequence on the stock price if margins diminished due to overly extravagant raises, which they most certainly would in a most if not all cases.
If they focus on those, it wouldn't be "overly extravagant raises", just... "staying up to date".
IME, people are a lot more sensitive to lowered stock prices than meager annual increases. The latter doesn’t feel emotionally like a loss.
We are a very loss averse species.