On GMAT, pronoun reference is governed by context or logic.
If there are two antecedents which may be grammatical referents of a pronoun, but if only one of those make logical sense with the pronoun, then there is no pronoun ambiguity. For example:
The car hit the tree, breaking its engine. - Here "it" can grammatically refer to either car or tree. But logically only "car" has engine, and hence "its" refers to car.
The car hit the tree, breaking its branches. - Here also "it" can grammatically refer to either car or tree. But logically only "tree" has branches, and hence "its" refers to tree.
The car hit the tree, breaking its parts. - Here also "it" can grammatically refer to either car or tree. And logically too both "car" an "tree" have parts, so in this sentence we have pronoun ambiguity.
Now lets consider the sentence in question:
The board is investigating the compensation packages of several executives in order to determine how much they may have been improperly awarded.
Likewise, in this sentence, both "packages" and "executives" make sense. Notice the two sentences below. Both are correct. So you may notice that we can get to either of these sentences if we replace "they" with these possible two antecedents.
Compensation packages may have been improperly awarded (to people).
Executives may have been improperly awarded (the compensation).
This is why there is pronoun ambiguity in this sentence.
Now lets assume, if we had the following sentence:
The board is investigating the compensation packages of several executives in order to determine how much they may have been improperly awarded to the executives.
Now only "packages" will make logical sense in place of "they". Thus, the sentence above does not have any pronoun ambiguity.
Thus, always go by logic to see if there is any pronoun ambiguity or not. Meaning is the key !!!
You may also review the following posts on pronoun ambiguity:
https://e-gmat.com/blogs/?p=289 - No Ambiguity
https://e-gmat.com/blogs/?p=285 - Possible Ambiguity
Payal