"Send people home at 5" is a metaphor for a humane workplace that values a balance between worklife and personal time - and importantly, requires people to take the time to achieve that balance. The degree to which it should be taken literally is the degree to which your office runs 9-5.

Based on the description of your workplace and if you want to follow the advice, it could be "Send people home after eight hours," because it looks like you have people regularly working 12 or more hours. Of course, that is easy to do in industries where the work is creative and the project is done when you run out of time.

Salaried compensation facilitates overwork because the feedback loop doesn't contain measurable consequences until staff get fed up and quit. But it doesn't have to be that way. If you want a feedback loop which forces management to take a real interest in long hours, put everyone, including the CEO on hourly compensation - I have a friend whose architecture firm did that years ago. They maintained very high retention through the construction boom when job hopping was common and salaries were rising because people appreciated the inherent fairness and management was able to add staff appropriately.

Good luck.