That's one way to look at it. If someone paid me a certain amount to live and work in Hawaii, for example, and I knew I would live well on that amount and it would make me happy then how do you optimize for happiness?

I make more than the proposed compensation and am no happier than when I was making half of that. I probably did something wrong in making my arrangements but it wasn't in the money department.

For the company it's probably not relevant but for the employee it is. As long as the pay is financially sufficient for you then it's more important if the job is something you will enjoy doing and are a good fit for.

The pay does reflect how much value you bring to the company. The better you are for a position the greater value you should be providing and your pay should reflect this.

The table has two sides.