There are evolutionary flows through the work force that don't require this (moving into leadership positions) but as they mentioned, generally hiring into the top levels comes from a tight circle of people, having gone to the same school, or some other such limitation. So if you didn't go to Stanford, what's your play?
I could understand why someone running a company wouldn't want to address this, but paying your engineers solidified salaries while company profits rise, and possibly with limited amounts of share in the company, is a good way to guarantee that they'll have to jump ship at some point, just to keep up with inflation.