LSAT 21 | Section 2 | Logical Reasoning: Q14

LR Question 14 Explanation

QUESTION TEXT: In most corporations the salaries of executives are…

QUESTION TYPE: Main Point

CONCLUSION: It’s incorrect to think that boards of directors will keep executive salaries under control.

REASONING: Most members of boards are themselves executives of other companies. They benefit generally from high executive salaries.

ANALYSIS: This question can be tricky if you don’t take the time to understand the stimulus. The wrong answers are full of plausible sounding nonsense.

The main point is this: board members have an interest in setting executive salaries high. The reason is that they themselves are executives.

When it comes time for the board of their company to set salaries, their salaries will be higher if average salaries for executives are high. So many board members may do their part by choosing high salaries for other executives whenever they can.

Therefore, the conclusion is that boards won’t keep executive salaries under control.

___________

1. The stimulus didn’t say what board members earned. The main point was that board members had a shared interest in increasing executive salaries in all corporations.
2. Not quite. The board members are themselves executives. So they have a vested interest in seeing other executives earn lots of money. That’s the main point.
3. CORRECT. Their role is to serve the economic health of the corporation. But many board members may serve their own interest as executives instead.
4. Not quite. The board members benefit from higher average executive salaries. When it comes time to set salaries at their own corporations, the salaries will be higher if the industry average is high. There’s no need for an executive to expect to eventually work for the company whose salaries they are setting.
5. The stimulus doesn’t say anything like this. The executives’ main interest is seeing a high average salary for their industry.

Recap: The question begins with “In most corporations the salaries of executives are”. It is a Identify The Conclusion question. Learn more about LSAT Identify questions in our guide to LSAT Logical Reasoning question types.