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Tuesday, January 13, 2004



Panel touts doubling
Kamehameha salaries

The recommendation for
the trustees is based on
"unanticipated" duties
the board performs


The annual pay for Kamehameha Schools' five trustees would nearly double under a plan submitted by a court-appointed panel.

In a Dec. 22 report filed with Probate Court, the Trustee Compensation Committee for the Kamehameha Schools recommended the annual pay for each trustee increase to $180,000 from the current $97,500.

The three-member panel also proposed that the board chairman's annual pay increase to $207,000 from $120,000.

The new pay requires the approval of Probate Court, which has scheduled a Jan. 23 hearing.

"We are mindful that our determination and recommendation may be viewed by the casual observer on first impression as a significant increase in trustee compensation. However, on balance, during our study we also learned of the unanticipated and substantial demands on the time and talents of the trustees," the report said.

"Your committee is convinced that presently and for the foreseeable next few years, being a Kamehameha Schools trustees is virtually a full-time job."



art


The attorney general's office, which serves as the estate's court-appointed guardian, said it plans to raise objections with the court on the pay plan.

A recent study by Philanthropic Research Inc. for the attorney general's office found that average trustee pay for public charities nationwide with assets of more than $500 million is about $6,500 a year, said Deputy Attorney General Hugh Jones.

Philanthropic Research, which operates the Guidestar.org national database of U.S. charitable organizations, concluded that the proposed increase would make Kamehameha Schools' trustees among the highest paid in the nation for public charities, Jones said.

Kekoa Paulsen, a spokesman for the roughly $5.7 billion trust, said the board is declining comment on the report until the Probate Court takes action on the matter. One person familiar with the trust said the committee did not consult with the estate's board when it made its recommendation, although its consultants did interview several trustees about their day-to-day duties.

The board can waive some or all of the proposed pay increase, the estate source said.

Trustee pay has been a source of controversy at the Kamehameha Schools, going back to the late 1980s and 1990s when board members were each paid up to $1 million a year. Legislative and court-mandated reforms implemented since then have capped board members' pay at "reasonable levels" set by an outside trustee compensation committee.

The committee, whose members include local attorneys Allen Hoe and David Fairbanks and Kamehameha Schools graduate Michael Rawlings, said the new pay structure is partly in response to recent challenges experienced by the trust.

Federal court lawsuits seeking to overturn the school's Hawaiian-preference admission policy, efforts to expand the school's educational programs and the abrupt resignation last year of the estate's chief executive officer, Hamilton McCubbin, have forced the estate's five-member board to spend more time and effort on trust matters, the committee said.

In its 28-page report, the committee noted that trustees Nainoa Thompson, Diane Plotts, Constance Lau, Robert Kihune and Douglas Ing attended more than 130 board meetings, executive briefings and community gatherings during the past fiscal year.

That is nearly three times the 45 yearly meetings the committee envisioned in 1999 when it capped trustee pay at $97,500 a year, the report said.

The committee's report is largely based on a study by Mercer Human Resource Consulting, which recommended an $180,000 annual retainer for board members and $225,000 annual compensation for the trust's chairman.

While trustees of many of the nation's largest public charities serve with less or no compensation, Kamehameha Schools' board members "spend far greater than double the amount of time spent by most corporate directors and trustees of large foundations," the Mercer report said.

"The issues confronted by the trustees from expansion of the schools, land use, environmental issues, to litigation concerning admission policies are most significant, complex and time-consuming matters that cannot be delegated or disposed of in a monthly meeting," the Mercer report said.



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