My intuition for this is leverage. As a people manager, the team's output is your output. When you manage a large team, small changes in IC output can quickly e

My intuition for this is leverage. As a people manager, the team's output is your output. When you manage a large team, small changes in IC output can quickly exceed 1 FTE. These multiplicative productivity improvements are why Managers get paid more. There's tons of ink spilled on the idea of the 10x engineer. Let's assume that exists. Even if an extraordinary single person can deliver 10x output (call that 10FTE), a good manager can deliver a similar productivity boost by merely 2x'ing the output of a 10-person team of average ICs (10FTE output -> 20FTE output for a delta of 10FTE, same as hiring a 10x engineer, which is hard to do.) If you have a 10 person team of 10x engineers, a good manager can deliver that 10FTE bump by increasing team performance by just 0.1x (10x 10FTE/person = 100FTE -> 10 x 11FTE/person = 110FTE team output, for a 10FTE boost). THAT is why good managers are worth paying.