Sennheiser is a German company and in Germany engineering is a matter of national pride and that mentality I would say is certainly present within Sennheiser even at the upper management level. The best engineers can command very high salaries so to keep good people a company must keep salaries competitive in the marketplace.
Lets look at a couple of flagship headphones of the last 5 years.
1) The Grado PS1000.....an absolute turd of a headphone that from an engineers perspective should never have earned the flagship moniker, let alone commanded a near $2000 price tag. It's the same basic design as the $60 SR60i, but with some metal on the outside of the cups, leather on the headband and bigger ear pads. I'd be surprised if $10,000 was spent engineering it.
2) The Sennheiser HD800...considered by many to be the finest dynamic headphone ever, so far (Sony MDR-R10 gets that title from some, but it wasn't a production headphone, merely a limited edition engineering science project). The level of performance the HD800 attains does not come by accident. Sennheiser probably spent in the tens of millions on R&D for this single product. They most likely won't recoup all that money on HD800 sales, but the acknowledged bad-assedness has a trickle down effect to the more mainstream consumer products and boosts the companies sales overall.
Edited by cswann1 - 1/21/14 at 9:07pm