#15 - In most corporations the salaries of executives are

[ioannisk]

Section two, preptest 21, question 15.
How is it A and not B? from what I understand, it's not B because the legislature is directly effecting themselves.
But isn't the board members themselves directly effecting themselves?

it states that: Most members of a coporations board are themselves exeuctives of some corporation (implying that they are not executives of that corporation? how are they on the board if they're not in the coporation?) and can expect to benefit, which implies indirect benefit of raising the standard.


Also, for A, it says "due to successful plaintiffs," What? what does that mean?

[Dave Killoran]

Hi ioannisk,

This is a challenging question, and I'd say the difference between (A) and (B) rests on them indirectly affecting themselves.

First, let's look at corporate boards. Note that the stimulus says about them that, "most members of a corporation’s board are themselves executives of some corporation." So, typically, whatever compensation they might award to a company executive won't come right back to them, but it could indirectly as raising salaries at one corporation will have a domino effect in the market, and eventually other corporations will do the same.

In (A), successful plaintiffs are ones that have won their case, and are now being given damage awards. Putting other doctors in a place to affect rewards means they might lower the awards, which would benefit them indirectly when they might face a malpractice suit.

In (B), there's no similar indirect benefit in play.

Please let me know if that helps. Thanks!

[ioannisk]

Hi ioannisk,

This is a challenging question, and I'd say the difference between (A) and (B) rests on them indirectly affecting themselves.

First, let's look at corporate boards. Note that the stimulus says about them that, "most members of a corporation’s board are themselves executives of some corporation." So, typically, whatever compensation they might award to a company executive won't come right back to them, but it could indirectly as raising salaries at one corporation will have a domino effect in the market, and eventually other corporations will do the same.

In (A), successful plaintiffs are ones that have won their case, and are now being given damage awards. Putting other doctors in a place to affect rewards means they might lower the awards, which would benefit them indirectly when they might face a malpractice suit.

In (B), there's no similar indirect benefit in play.

Please let me know if that helps. Thanks!

So the phrase "most members of a corporation’s board are themselves executives of some corporation." implies that most members are a executive in a corporation but does not imply of the same corporation?

[Dave Killoran]

Yes, and I think there are two things at work behind this:

First, and perhaps foremost, is that I think LSAC would say that it is an widely known fact (and therefore commonsense knowledge, to use their term) that many members of corporate boards work for other corporations. Indeed, the idea of a corporate board is generally to provide guidance that comes from beyond the walls of the corporation to provide the best perspective.

Second, I actually do think they meant they typically work elsewhere, in part because if you are on the board of a company, you are an executive, and the stimulus states that "most members of a corporation’s board are themselves executives" (italics added). There seems no reason to state it that way if they are all executives at that very firm (this is also, I think, a use of "most" intended to be indicative of a portion, and not "all"). But, to some extent, clearly understanding this interpretation is reliant on understanding the first point above, so I understand your question about this.

I'm also not a fan of reverse logic (that is, using the correct answer to justify a particular analysis of a stimulus, but I'll do it here anyway ), but note how carefully (A) refers to "physicians not directly involved in a suit" (italics again added). The indirect aspect of this was something clearly intended to play a major function.

Please let me know if that helps. Thanks!

[ioannisk]

Yes, and I think there are two things at work behind this:

First, and perhaps foremost, is that I think LSAC would say that it is an widely known fact (and therefore commonsense knowledge, to use their term) that many members of corporate boards work for other corporations. Indeed, the idea of a corporate board is generally to provide guidance that comes from beyond the walls of the corporation to provide the best perspective.

Second, I actually do think they meant they typically work elsewhere, in part because if you are on the board of a company, you are an executive, and the stimulus states that "most members of a corporation’s board are themselves executives" (italics added). There seems no reason to state it that way if they are all executives at that very firm (this is also, I think, a use of "most" intended to be indicative of a portion, and not "all"). But, to some extent, clearly understanding this interpretation is reliant on understanding the first point above, so I understand your question about this.

I'm also not a fan of reverse logic (that is, using the correct answer to justify a particular analysis of a stimulus, but I'll do it here anyway ), but note how carefully (A) refers to "physicians not directly involved in a suit" (italics again added). The indirect aspect of this was something clearly intended to play a major function.

Please let me know if that helps. Thanks!

Thank you!
you see, the whole corporate board consisting of people not part of the corporation was not.... hrm... common sense for me.

[Dave Killoran]

I understand that, and it's a tricky one because sometimes the line of "what you're supposed to know" isn't entirely clear. The good news is that it is very unlikely that this issue would ever cause you a problem on the LSAT again

[reop6780]

The correct answer is A while I chose E.

I thought the main issue in the stimuli is that most members of a board are also executives of some corporation; hence, the salaries of executives can be raised for the benefit of board members themselves.

The physicians mentioned in answer A are "not directly involved in a suit." On the other hand, some of board members are also executives.

How come answer A is most parallel to the situation in the stimuli?

[KelseyWoods]

Hi reop6780!

In the stimulus, the author reasons that since board members are executives of other companies, they would benefit indirectly from setting generous benchmarks for executives' salaries. The board members are not executives of the company whose board they are members of so when they set the salaries for the executives in that company, they are not setting their own salaries. But if all the board members of companies agree to set high salaries for their executives, then they are essentially helping each other out. The executive salaries that board members set become a precedent and other companies, including the ones they are executives of, may raise executive salaries to match.

This is parallel to the situation in answer choice (A). The physicians not directly involved in the malpractice suits are analogous to the board members who are not executives of the company they are board members of. Just as the board members may have a vested interest in making sure executive salaries are high, doctors may have a vested interest in making sure that the doctors in medical malpractice suits don't have to pay very high damages. They would like to keep the standard malpractice pay out rather low in case they themselves are ever involved in a malpractice suit.

Hope this helps!

Best,
Kelsey

[reop6780]

Ah ha! thank you. I got it.