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GMAT Verbal Section | trouble with pronouns in Manhattan GMAT

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Dear friends:

in Manhattan GMAT's sentence correction book (5th edition guide 8, p72), there's this one portion that I simply do not understand:

it's about the usage of ambiguous pronouns:

so this is wrong:
Quote:

The board is investigating several executives' compensation packages in order to determine how much they may have been improperly awarded to THEM


since THEM may refer to packages or executives.


but this is right:
Quote:

The board is investigating the compensation packages ofseveral executives

...

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