With the exception of perhaps an odd startup, all published payscales for US Airlines are years with the company (not years in seat) - so like Pilot said, if you upgrade after 5 years you will get 5 year captain pay. The published "year 1 Captain" number is generally meaningless because nobody upgrades in their first year (with extremely rare exceptions, of course).
But, yes, you take a hit in your bidding power once you upgrade since you are now a junior Captain rather than a senior First Officer. Some guys will put off taking a Captain upgrade for a while to allow more junior people to move into the left seat first - thus they will have a bit more bidding power once they finally do take the upgrade (essentially moving in "above" the more junior folks that took the upgrade sooner).
Hope that helps.