Judge OKs
trustee pay plan

The pay cap for the
Kamehameha board
would go to $165,000
from $97,500 now

Kamehameha Schools trustees stand to receive annual pay raises of up to 69 percent under a proposal approved by a state judge yesterday that doubles the number of paid meetings they can attend.

Probate Judge Colleen Hirai approved the new compensation structure, which increases the pay cap for trustees to $165,000 from $97,500. The pay cap for the board's chairman, in turn, rises to $210,000 a year from the current $120,000, under Hirai's order.

Trustees' current $97,500 annual compensation includes an annual $30,000 retainer plus a $1,500 fee for each board meeting. The number of board meetings is limited to 45 a year.

Under the new plan, the trustees' annual retainer stays at $30,000, but they are allowed to hold as many as 90 board meetings a year.

"This will provide flexibility and this will provide a maximum," Hirai said.

The state attorney general's office objected to the pay raise, arguing that under recent reforms, the board was supposed to focus on policy-making while leaving day-to-day management to the chief executive.

Trustee pay has been a source of controversy for the $6 billion Kamehameha Schools, going back to the late 1980s and 1990s when board members paid themselves up to $1 million a year each.

The high pay of the estate's former trustees Henry Peters, Richard "Dickie" Wong, Lokelani Lindsey, Gerard Jervis and Oswald Stender prompted the IRS in 1999 to threaten to revoke the estate's tax-exempt status.

Legislative and court-mandated reforms implemented since then have capped board members' pay at "reasonable levels" set by an outside trustee compensation committee.

The proposal approved by Hirai differs from a plan submitted by the Probate Court-appointed Trustee Compensation Committee, which advocated a flat annual retainer of $180,000 a year for each board member and $207,000 for the board's chairman.

The committee, whose members include Kamehameha Schools alumnus Michael Rawlins and local attorneys David Fairbanks and Allen Hoe, said that recent challenges experienced by the trust have forced board members to nearly triple their workloads.

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.

The attorney general's office, which opposed the increase, said it is wrong to use last year's experience as a guide to future trustee pay, especially since the board recently named former health-care executive and 1970 Kamehameha Schools graduate Dee Jay Mailer to succeed McCubbin as chief executive.

Deputy Attorney General Hugh Jones said that board members already meet more than 90 times a year. In addition to weekly trustee meetings, board members also hold weekly meetings with the estate's staff. Trustees are not paid to attend the staff meetings, but could be in the future, Jones said.

"We commend the trustees for making education the primary focus of the trust, but we feel that the current compensation is adequate for now," Jones said.


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