The stimulus starts by discussing how, in most corporations, a group from the board of directors decides the salaries of executives. The idea behind this procedure is that, since the board of directors is supposed to ensure the corporation stays in good financial shape, they will not set executives' salaries too high.

The author then rejects this line of reasoning. He points out that most members of a corporation's board of directors are also executives of some other corporation. He argues that they can therefore benefit themselves by setting "generous benchmarks" for how much executives get paid. Thus, he suggests that the way most corporations set executives' salaries won't necessarily achieve the goal of keeping executives' salaries from being excessively large.

This is an unusual question. It's basically testing our understanding of the argument in the stimulus, and specifically asking us to rephrase the support the author provides for his suggestion that the way most corporations set executive salaries won't necessarily keep those salaries from being too large. The author's premise is that most directors — i.e., most of the people who could be chosen to set executive salaries at any given company — are themselves executives elsewhere. This gives them an incentive to set a "generous benchmark" for executive salaries. In other words, they are motivated to set a high standard for executive salaries at the corporations where they are directors, presumably because this might cause their own salaries to be raised at the companies where they are executives.