Wednesday, April 29, 1998

Cayetano supports
trustee salary limit

Conference committee is
considering a $94,780 a year cap
based on recommendations

By Pat Omandam


Bishop Estate trustees, averaging $800,000 annually, should each earn no more than the chief justice, or $94,780 a year, critics say.

A House-Senate conference committee today could consider that proposal, which has the support of Gov. Ben Cayetano.

"It's something that could be on the table," said Senate Judiciary Co-Chairman Avery Chumbley (D, Kihei).

Members of Na Pua a Ke Alii Pauahi, state Attorney General Margery Bronster and authors of the Broken Trust essay yesterday unveiled the plan that limits pay of trustees of charitable trusts.

Toni Lee, president of Na Pua, a group that has criticized Bishop Estate trustees for management of the estate and Kamehameha Schools, said the money paid to trustees in recent years is grossly in excess of that standard.

The group wants the Probate Court to set pay for trustees of all charitable trusts, with the law banning any trustee from using trust funds to influence or appeal the court's determination.

"Charitable trusts are to be treasured, not squandered," Lee said.

Bronster said the two key elements to the proposal are the "cap" for trustee pay and the use of "reasonable" in justifying compensation, a term that takes into account, among other things, a trustee's qualifications, experience, as well as commitment and performance to the trust.

"So if there is a trustee that does have a valid, reasonable basis for seeking to have the court add some additional compensation, there will be process for that," Bronster said.

"But it would not be something that could be funded by the trust and cause injury to the beneficiaries of any charitable trust," said Bronster, who added the governor has favored such a plan.

Walter Heen, a retired judge and Broken Trust co-author, said: "The court, in doing so, may hire an independent expert at the estate's expense to determine the reasonableness of that level of compensation."

"Should the trustees disagree with that, then any challenge they make will be subject to payments from their own pockets," he said.

Bishop Estate officials could not be reached for comment last night. Trustee Henry Peters has stated in written testimony that trustee commissions are the result of the performance of the billion-dollar trust.

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