How do you go from Sr. Manager to Manager, you manage a large team, and create a need to have your org have multiple managers.
So yes, lots of perverse incentives to grow your org so-as to grow your career.
There are some other tides working in the favor of bloated salaries and payrolls. One is the focus of "stakeholder capitalism". Most of the large companies are held by ETFs. The large banks that run the ETFs are less concerned about individual efficiencies of any one company (they own them all anyway), but are more interested in other things (green initiatives, social causes, etc). So the decisions being made at these companies are less about profit and more about servicing "stakeholders", be it their employees, the community, the environment. That's all fine, but it's difficult to track and hold executives responsible. A bloated staff is fine because you don't want to lay off employees. Or various money losing departments are okay because they're servicing the community.
No org is perfect, but I keep seeing this take again and again and again, yet rarely any form of acknowledgment that it could be good for the company to incentivize proactively growing a team
The larger a company gets, the more careerists it attracts. For careerists, “number of people managed” is a key performance indicator (and a boardroom/resume bragging right).
The human motivations of decision makers - to advance their own careers by being the manager that manages more people - is completely misaligned with these future efficiency hypotheses
As long as that remains true, we will continue to see bloat and companies hiring way more people than they need.