Remember that all the people up the chain deciding compensation are managers. It's natural that they would perceive the management track as more important, because they're on it.
Another factor is that going to management to get more compensation is a given around many industries. You aren't going to get more where you are if you don't want to move into management, because you won't get more elsewhere either in the same state and they know that. They are not trying to pay you what will keep you happy, they are trying to pay you what will stop you taking your knowledge/experience elsewhere.
You just have to be aware of the market you are locking yourself into. I'm well aware I could be making more as a manager, or even if I let myself be called a “senior” which often overlaps in terms of having some responsibility for people/things in a manager-y way, but I pootle along as I am anyway because I know while I'm not exactly happy ATM I'd be less so the other way and I don't think that the extra compensation would balance that.
We may fall foul of AI in the not too distant future and end up stacking shelves for Tesco, but then again a lot of those management reports and decisions look rather automatable by the same LLMs too, if not more so…
For what is worth, I'm a fairly senior manager (a few hundred engineers) and I firmly believe and vocally point out the opposite. I'm sure the kind of self dealing you describe is not unheard of, but it's also pretty cynical to assume that as a default. If the culture in your work place has gone that far down the drain for real, maybe take some time to look for a new gig or reality check it with a manager you trust?
I've actually been in HR discussions telling people managers are overrated and we need to value ICs more. It's really difficult to explain to HR people that managing people isn't[1] a higher responsability job than being an expert at doing something...
[1] Of course, sometimes it is. It depends on the team size and seniority, but also depends on the expertise. I'm just saying that a manager does not have to always have a higher grade than a person on his team.
Maybe start by getting rid of the silly term - "IC". What's the difference between a product, project, sales and a people manager? They all manage something.
It's people's egos and lust for power that makes this distinction.
I'm against euphemisms in general and don't think we should be changing this word either.
As I see it, an IC is anyone whose main contribution is through artifacts or other actions they perform directly, and a manager is someone whose main contribution is through coordinating the actions of others. As such, I'm absolutely ok with "project manager" and "product manager" even if people don't report to them directly.
If you have a better term, do go ahead and propose it, but let's not throw out this useful term just yet.
The distinction is useful because people managers have some specific tasks related to HR processes. The fact that the distinction has an ego implication is the problem, not the distinction itself.
Could it be (get ready to crack some eggs as I am about to fry some conspiracy-bacon) an effort by HR/companies to promote sr engineers into managers to then give HR reasons to cull the herd if they need to?
If management didn't pay well, qualified people simply wouldn't do it or you'd be limited to people who felt emotionally compensated by getting more power over other people (which is already bad enough).
Some of us enjoy helping other people. First bit of advice I give to new or would-be managers is to learn indirect gratification. Most common failure mode for new engineering managers IMO is the struggle to feel productive given that impact is achieved chiefly indirectly.
You just have to be aware of the market you are locking yourself into. I'm well aware I could be making more as a manager, or even if I let myself be called a “senior” which often overlaps in terms of having some responsibility for people/things in a manager-y way, but I pootle along as I am anyway because I know while I'm not exactly happy ATM I'd be less so the other way and I don't think that the extra compensation would balance that.
We may fall foul of AI in the not too distant future and end up stacking shelves for Tesco, but then again a lot of those management reports and decisions look rather automatable by the same LLMs too, if not more so…