This is true to a much greater or lesser degree depending on country, though. Here in the US you can be a really senior leaf node software engineer with fancy titles like "Staff" or "Senior Staff" or "Distinguished Fellow" and command tremendous respect and compensation.
That doesn't exist in some other countries. I was talking with an Italian friend once who works at a bank over there as a programmer, and seniority was exactly the same as how many people you manage. It was a contradiction in terms as far as he was concerned to be a senior software engineer if you weren't at least managing a team. The first question he asked when I was talking about my job was "How many people do you manage?", and when I responded zero, he immediately thought I was low level (I was not). Everyone aspires to be a manager over there.
My anecdote isn't exactly the opposite of yours, because in mine it's programmers themselves that are assigning status based on how many people you manage, whereas in your anecdote it's someone in an outgroup.