I still don't see how you beat the market-driven salary. Don't you have to pay market rate for good managers, and market rate for good IC's?
If a company unilaterally cuts manager pay, they presumably won't get great managers, or at least not good managers who also want to be paid fairly.
It also means managers will only want to manage more senior IC's, so as to benefit from the higher salary, while it's the junior IC's who need more capable management.
You could drop manager pay and accept that it will mean "worse" managers, and perhaps hope to make up the difference by using the savings to pay more for ICs and hope that this will get you "better" ICs and the result will be better team performance overall.
I don't know how you'd ever make that change to a company structure though. The turkeys would have to vote for christmas.
If a company unilaterally cuts manager pay, they presumably won't get great managers, or at least not good managers who also want to be paid fairly.
It also means managers will only want to manage more senior IC's, so as to benefit from the higher salary, while it's the junior IC's who need more capable management.