How does a Product Manager add value?

Sounds like you've never worked with a good PM. A good PM knows the product and problem space extremely well, and guides the engineering team on what needs done. Yet at the same time sits back and lets the engineers devise the actual solution. They talk to all kinds of stakeholders, internally and externally, and build the roadmap. They know if an incoming bug is urgent enough to do right away, or how long it can wait. And they know which incoming feature requests should be done, which should be modified to fit a broader audience, and which are simply one-off bad ideas.

All that being said, there are engineering teams where the leads know all this and do all this. There are more engineering teams where the leads think they are good at this, but really just run all bugs and requests into the product in FIFO mode. The point is that somebody should be in this role of deciding what gets built through a deep understanding of the "why" of the product. A PM who does this job well brings a ton of value. A bad PM kills products and teams.

My advice is to care just as much about the quality of your PM as you do about your boss when making career decisions.

Everybody here is talking about "good" PMs... but OP seems to be talking about regular-average PMs. In that regard, regular-average PMs bring very little value in my experience, and sometimes they get better salaries than regular-average engineers.

It's clear that "good" PMs bring value. Any "good" INSERT_ROLE_here brings value.

I think people are usually not paid for how much work they do or how skilled they are. People are paid by how much responsibility they have. If I screw up, and my solution ends up in the final product, my project manager will (and should!) be blamed for it. Because it is his responsibility to make sure the correct decisions are made.

If that means that my project manager gets paid more than I do, but also takes more responsibilities, I'm fine with that.

I know organisations that pay engineers more than PM. It ultimately depends upon the org. Again, role of product manager depends from org to org. However, I think a product manager is responsible to create end user persona, do research with customer, discover customer painpoints and convert into feature request, manage feature timelines etc.

It depends on the company culture and its maturity towards software development.

Good PM if they know the product inside out and they have a good insight on how development works provides a lot of value.

However there are some companies that believes that software engineers are “second class citizens” and roles such as Project Managers and Product Owners just gets paid more without any clear justified contribution.

For me this is a red flag that the company has not realised yet the real value of the software engineers.

OP is talking about product mangers. Why are there so many comments about project managers

Good project managers turn chaos into clarity.

A good PM should be focused on ensuring you're building the right things, and bringing it to market in a way that leads to growth and risk mitigation. That includes (for example): - quantitative and qualitative prospect and customer input on roadmap - pricing and packaging of your solution - establishing and managing inbound OEM contracts - working with legal on making sure custom contracts don't handcuff your business - input and planning for FY business goals and targets - educating and aligning partners and customers on roadmaps - helping sales target the right customers and distribution channels - managing profitability of the business (at least partially) - helping refine the 'pitch' and 'demo' - remember, your company does 2 things - Build and Sell product. A good PM should be at least as focused on Selling as Building. - etc

These are just a few of the responsibilities, of course. A good PM is at the center of the business interactions. The interactions between engineering and PM is hardly the entirety of the role. And yes, you will often have to spend time explaining to them how things work so they can be better enabled to have customer discussions and so on. Their job isn't usually about HOW, it's about WHAT/WHY primarily.

My advice: 1. Don't be jealous of the pay. That's down to the market and supply/demand. Jealousy is a cancer that robs you of your happiness and clouds your mind into making career-limiting, and rather juvenile statements like 'The role should really sit with some entry level people'. As Dr. Winston said in How to Speak: "you'll be judged based on the quality of your speaking, the quality of your writing, and the quality of your ideas - in that order."

2. Understand what goes into a software business. I doubt you're explaining 'everything' (and if you are, then maybe you should be a CEO)

3. Think about becoming a PM. The pay is better... :) Really though, the best engineers (e.g. fellows), engineering managers, and senior architects get paid as well or better than PMs. Do what you love and what you're good at, and the pay will follow as your career progresses and you accomplish things of note.