Interesting! This will have positive effects: You can set the performance bar high, and then only recruit the best people. The issue of money will be off the table, so people can concentrate on performing well.
Watch out for the negatives: people will not want (or be able to) leave, yet a healthy turnover of staff is not a bad thing. Watch out for a 'closed shop' mentality developing around the jobs there.
Secondly, it will create a 'bubble' in the local employment market; rival firms will have to increase their rates to attract good people, and this might create a local pay 'arms race' (which might be unsustainable in the medium / long term). However, a good development, and I wish them well!