The new hire is going to be at 105k as well. As people leave you will eventually ratchet up to the rate you don't want to pay anyway. You are right that it would probably be exponential the further wages get from market. One day a large portion of people would leave and their replacements will be less effective and cost a lot more.
On the other hand, if you are a executive you can keep rolling the dice, get a nice bonus and leave yourself in two years because you know the real money comes when you switch companies.[0]
On the other hand, if you are a executive you can keep rolling the dice, get a nice bonus and leave yourself in two years because you know the real money comes when you switch companies.[0]
[0]https://rationalwiki.org/wiki/IBGYBG