Companies tend to have a ladder and different paths/comp levels for managers and individual contributors. Different regions are then sliced into different levels and what you're left with is location, a role, and a level. These are combined to create a salary band which is the range an employee that fits into the profile.
It's important to note, it's a salary band. This means an individual can have a fairly wide range of total compensation across this band. Also, some companies are biased towards salary or stock options/RSUs. But generally, an employee will have a lower "comp-ratio" meaning they are under the middle of the band. This leaves room for raises, etc. At some point an employee will be at the top of their band. They are either promoted into a higher level, kept at their current level but only given CoL increases (bands tend to increase ~3% each year), or fired.
The company can decide how competitive they want to be in each region or choose to not hire in a region because it is too expensive to be competitive there.
