So Prime Minister can kill people for no punishment? Great developers have high salary, all other benefits are equal.
Does this seem fair?
Why is it fair to increase the wage so slowly? Either less experienced developers are not worth the money to begin with or someone, somewhere has an idea of what the max cap of a developer is, and sticks to it.
Anyway, you're asking a room full of developers what they would want and they're telling you. 20% time is a solution that works. Toiling away on the same problem day after day sucks and it gets boring. 20% time breaks up the drudgery.
I suspect that you don't want to solve the developer's problems though, just your own.
Management is hard. We're all learners when it comes to working with people, especially when some of the people are smarter than we are. Keep learning!