Answer by Harry Glaser:
They become … Unix Beards!
They become better, more experienced, more sought-after, better-rewarded engineers. Some of the best big tech companies recognize this explicitly in their career ladders. At Google, for example, there is a separate job ladder for “individual contributors”, which culminates (or once did) at “Google Fellow”. An engineer at this level is commensurate with a Vice President, and has similar high-level impact — even moreso on questions of technology, architecture and technical direction. I believe there are similar positions at Facebook, Apple, etc.
Likewise, at an early-stage startup, the company’s most formidable hacker may well be more valuable than the experienced manager she reports to, and the compensation structure will reflect that. These folks are very much in demand as founding engineers, CTOs, and technical cofounders. Now that I think about it, a very strong engineer with a high risk tolerance might be the single person with the most leverage in the entire startup game.
It’s true that at some companies, engineers are treated as “cogs”. But you don’t want to work at those places anyway, regardless of whether you want to be a manager.