In that model, why wouldn’t the company insist that you move closer to work to minimize the commuting payment? You picked where you live and what company you applied to work at; they didn’t pick where you live.
If that means that you want to only apply for remote positions, that’s certainly your choice; I don’t blame you in the least for it, but expecting a company to pay you as a result of where you chose to live seems unlikely to happen, to put it mildly.
Expecting a company to pay you as a result of where you choose to live used to happen: if you moved to San Francisco from the midwest in order to work at a company in San Francisco, you would expect a cost-of-living-in-SF to be factored into what was being offered and what you'll accept as compensation; and if you didn't then you were underwater.
I don't have a clear cut way to interpret this interaction either in the past or going forward (everyone's motivations are different). But now physical location factors into the calculation on both sides differently than it did in the past. In the past "travel time to sit at a desk in a specific location" was always completely assumed to be a burden incurred solely by the employee (it had been the government who made allowances for pre-tax commuter costs in some cases). That is no longer the case.
When it comes down to it, getting paid for 8 hours of company time but 2 of them being travel time and 6 being productive is getting paid 33% more. The negotiation may be less directly about money: rather than "I want more money for that 40 hours" it could be "I'll work 32 hours for that money"
Or for that matter, why wouldn't folks decide to live farther away from work to maximize their compensation? I think a lot of people wouldn't mind spending a few hours each day on the train for a 40% raise.
There are a lot of discrimination landmines when you ask employees to live in particular locations. In general, the safest thing to do is to require them to show up in person, and they will decide how far they are willing to live. In fact, if I recall correctly, you can't even ask people if they own a car. Being prescriptive about location can become a lawsuit for class discrimination.
Many people have purchased a house that they intend to remain in, the friction to move houses is often larger than friction to change jobs.
Also, there may be a spouse who just doesn't want to move house.
>The closest homes to work are $1.15MM and $1.5MM. I’m not sure if the CEO is paid enough in cash to qualify for one of these homes on salary alone.
Obviously yes? You realize that most people mortgage their homes? A 1.5M, 30 year mortgage at today's rates (3.1%) translates to $76,863/year which seems pretty doable for a CEO (unless you're the garage startup type).
If that means that you want to only apply for remote positions, that’s certainly your choice; I don’t blame you in the least for it, but expecting a company to pay you as a result of where you chose to live seems unlikely to happen, to put it mildly.