One way to offset that is to make sure that team performance is as much of an incentive as individual performance.

A stock compensation helps in that regard: hiring strong individuals will help ship a better product faster and should increase the stock value. Meanwhile traditional stack-ranking and a mostly salary compensation will encourage individuals to make sure they are seen as the top performer no matter what.

Most people want to hire the best candidates they can despite some of the misaligned incentives. You don't want to spend overtime on someone else's bug because you hired poorly. The risk of a smaller bonus or less promotion chances is complicated as sometimes there is more available if the teams performance improves as a whole. When you deliver on a major project the team's pie is often much larger, and even if you end up with a smaller slice of said pie you're usually better off.