I agree that it is mostly about ego, but........
In a large Fortune 500 company, your salary and benefits are often determined by someone with absolutely no aviation experience at all. Out of 30,000 employees, there may be 6 pilots. This presents difficulty for an HR apparatus trying to figure out what is appropriate compensation. They (being HR) consult with consultants and order surveys that try to neatly summarize job tiltles and responsibilities.
Depending on how savvy your HR folks are, you could have them attempting to pay you the Regional Jet FO pay if your title is Co-Pilot . After all, they are a Co-Pilot on a turbojet powered aircraft (same job description as you). Have you ever seen first year FO pay even at a major (not that they have hired anyone in a long time). Pretty poor.
A proactive Flight Department manager will school HR a little and maybe show them a Stanton Salary Survey or Conklin DeDecker report. I have heard from many a Dept. Manager that surveys from Pro Pilot or NBAA hold no sway with HR, because it is pilots reporting salaries and not HR.
Unfortunately, when your boss goes to HR and tells them that they need to re-evaluate compensation, they will say. Has anyone quit lately? If the answer is no, then in HR's eyes there is not a problem and no need to do additional work in that area. I know it doesn't sound very progressive, but imagine the FAA promulgating a new rule for an issue that has never caused an accident. How seriously would you take it?
Is it cost effective to recruit, train, relocate a new employee? Of course not. In this market, do any of us have the leverage to demand more money or threaten to leave? Very few of us.
Hopefully anyone who calls him or herself a "Captain" actually posseses the skills to dutifully carry out that role without regard to which seat they are occupying and the qualifications of the person sitting next to them. Hopefully the people in your HR department are just as competent at their jobs. Lets make both of our lives easier by assigning a title that allows them to accurately detemine fair comensation for us.
That being said, if anyone out there is willing to pay $200K a year for a weak FO, I am available immediately.
