The best engineers get all the benefits of being leaders
*All* the benefits?
I don't think so, I think it's just inertia. Our industry pays middle management comparatively poorly. In software engineering / web development which is my line of work, manager get paid barely more than senior engineers. Now I'm not one of those people who feels it's wrong to have an engineer making more than his boss (I've managed people earning more than me before, they were all awesome) but if you want the best people to step up and take a lot more pain you need to pay them a lot more.
In most other industries managers earn significantly more than their reports. Take a look at retail, at sales and many other professions. Someone in retail in the UK earning £16k/annum on a checkout line will have a manager who earns around double that - 30k or so. Same for customer services.
So, take a software engineer earning 55k/annum in London - his manager probably earns around 65k-70k, and has a MUCH more stressful and less enjoyable job, and almost certainly longer hours. His pro-rata take home is probably only around 5% better.
So how about we pay our Development Managers 100k? I bet you'd have a few more of the stronger candidates stepping up to the plate.
Yours sincerely, a (fairly, IMHO) good Development Manager in London - considering taking a step down or sideways because the money just doesn't justify the extra hassle...