"What's more, Microsoft never paid the really big bucks like the FAANG companies"

I never knew this open secret. In my day msft was very glamorous and I guess something like oracle played the role you're ascribing to msft now. I wonder what their strategy was? (I tend to doubt this was a careless/unexamined decision.) Maybe they figured that paying extra for individuals doesn't get you much if you have enough structure in place? A Bill Bellichik approach to hiring. Is the relationship you're making (FAANG salaries == better products) accepted as true?

Good question. For a long time I think the justification was location: Microsoft is in Seattle, and it’s only the Bay Area that is getting inflated salaries.