@OP
I'm afraid your L3 lied to you. If you think for one second that total compensation doesn't play into this, you are fooling yourself. Your coward of a director can say whatever he wants, but make no mistake, the coward will still have to make a choice.
We aren't a performance first business any longer. We are a company $140 Billion in debt. High performers cost more. Low performers can be compelled to assume responsibilities of those high performers. When they can't cut it, that's great because that means I can request that work be farmed to an H1B or MSP. Cheaper and someone else's problem.
Further, if I were you, I'd be lodging a COBC complaint because, his little 2 bullet strategy speech just created a very hostile work environment for everyone, not just the 'poor performers'.
Lastly, I will tell you that I've met some of the worst employees you could imagine and they will never be let go. They stink but they are a consistent butt in a chair. They are uneducated, unskilled, and unwilling to bend. Conversely, they are have zero ambition, no opinions, and they take responsibility for other people's ideas and creativity. These people will always be last on the list for surplus because they are just too tough to replace.