Tuesday, May 4, 1999

Trust makes
a bundle

Goldman Sachs shares close
up 32.8% on strong demand

By Rick Daysog


Bishop Estate saw its investment in Goldman Sachs Group Inc. quadruple in value as the Wall Street firm's stock began trading on the public market for the first time.

Shares of the 130-year-old Goldman opened its first day of trading today on the New York Stock Exchange at $76 a share before falling back to close at $70.37.

Yesterday, the investment banking firm raised $3.66 billion in an initial public offering priced at $53 per share.

Bishop Estate, which invested $500 million in Goldman Sachs beginning in 1992, earned $477 million from the sale of about 9 million shares in yesterday's stock offering.

But the 114-year-old, nonprofit charitable trust retained 21.9 million shares, or a 4.7 percent stake in Goldman. Based on today's closing price that stake is worth nearly $1.55 billion.

The news was welcomed as "outstanding" by the estate, which has been wracked with turmoil during the past two years. "This is something for which people have been keeping their fingers crossed and looking forward to," said Bishop Estate spokesman Kekoa Paulsen.

Paulsen said the trust plans to use proceeds from the stock sale to pay down debt and expand educational programs for its Kamehameha Schools.

5 trustees each
paid $301,000
since Jan.

By Rick Daysog


Bishop Estate's five trustees each took more than $301,000 in commission for the first four months this year, even after a new state law limiting trustees' salaries went into effect.

The five trustees -- Richard "Dickie" Wong, Oswald Stender, Henry Peters, Lokelani Lindsey and Gerard Jervis -- each earned an average of about $75,000 per month since Jan. 1, according to a filing yesterday by the estate's court-appointed master Colbert Matsumoto.

Matsumoto's filing comes on the heels of Probate Judge Kevin Chang's decision Friday to suspend the pay of all five trustees. Court documents show that board members received more than $1 million in commissions during the estate's fiscal year ending June 30, 1998, and another $820,000 for the first 10 months of the 1999 fiscal year.

Critics have complained the pay was excessive and violates the new law limiting trustees' pay to reasonable levels.

The Internal Revenue Service, which has been auditing the estate's finances since 1996, also is investigating trustees' pay, and the the attorney general's office has raised concerns that the salaries could affect the tax-exempt status of the trust and the estate-run Kamehameha Schools.

"This compensation issue is really the source of all that is wrong with the trust," said Deputy Attorney General Hugh Jones.

A spokesman for the Bishop Estate could not be reached for immediate comment.

In the past, trustees have defended their pay as performance-based and equivalent to that paid to top executives with similar duties.

Estate's pay

Since Jan. 1, the Bishop Estate trustees have each received the following payments:

January: $62,880
February: $95,677
March: $80,420
April: $62,414
Total: $301,391

Bishop Estate archive

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