> If you stay at a company, they will give you some fixed pay increase, perhaps tied to your annual review. After a few years, your pay could get seriously out of whack with the market.

This. In my experience, especially applies to H1-B employees or any employees who are perceived to be unlikely to leave. One downside is that, lowering the average salary of all employees makes hiring new employees (at current market rates) difficult. Thus begins (or continues) the downward spiral.