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It is not to say that what managers do is not important. But, I am not yet convinced that as a manager you should get paid more because you have direct reports and have people management responsibilities.
Supply and demand. They spend all day in meetings gathering requirements, fighting to fund their staff, keeping their staff from being dragged off onto other projects. Few can do it well.
But when they do, it's because of leveraged impact. If I'm a 10x engineer, then that's a huge individual contribution. However, if I'm a 2x manager with 12 reports, then my impact is greater than a 10x engineer. That is to say, if I can make my 12 reports twice as productive, then that's a huge benefit to the org. If I'm a 2x director with 4 managers reporting to me, then that 2x compounds through each level of the org.
Now, a 2x manager might seem far fetched, but so is a 10x engineer if we're being honest. Think about your productivity under your best boss vs your worst boss.
What is a bit of nonsense is bad managers. But that's a whole different issue, with tomes of academic research (see The Peter Principle) trying to figure out why incompetence is so pervasive in management.
That's not always true.
Next let's explore the ideal case. An engineer is very good at using tools to accomplish work. A good manager should be very good at using/making/helping humans accomplish work. Totally different skill set, but not easy, and potentially very profitable for the company. I think that there is a belief that if you assume responsibility for a team that you are now the primary locus of work getting done or not and thus your risk/reward levels are increased.
The reality is more along the lines of, "persuasive people end up in control of capital and then pay people like themselves more." Really effective leaders, through myriad strategies both good and bad, manage to take the potential work output of a group of individuals and focus it on their goals preferentially. This is super powerful. They see this as their particular talent and power and, noting how powerful it is, want to compensate others who are doing something similar. This is an admittedly jaded and machiavellian take on management.