While it's true that the government (obviously) cannot supply equity and is capped at 174k (by law capped at a senators salary), they can try to make it up other ways. Providing free room and board (or funds for the same), paying higher education costs and providing free healthcare. Also, allowing those benefits (and a healthy percentage of your income salary) to continue into retirement.

There is also the fact that they have more take home pay then you might expect, because government salaries are exempt from FICA taxes