Kamehameha Schools trustees have rejected a 69 percent raise that was to have gone into effect next January.

In fact, the trustees said yesterday that they will take a 10 percent decrease in compensation, effective immediately.

The announcement came just hours after the pay increase recommended by the trust's Probate Court-appointed manager, David Fairbanks, was approved by Judge Colleen Hirai.

Members of the board would have been paid $165,000 a year, up from $97,500.

The chairman's annual salary would have climbed 80 percent, to $217,000 from $120,000. It would have been the first pay raise for the trustees in a decade.

“;Given the current financial condition of the trust at this time, the Kamehameha Schools trustees will not accept any increase in compensation until that situation improves. In addition, each trustee has elected to take a 10 percent decrease in current compensation, effective immediately,”; the trustees said in a statement.

Kamehameha Schools, one of the nation's largest charities, has been hit hard by the economic downturn. In January it calculated its investment portfolio lost $1.4 billion over four months to stand at $7.7 billion as of Nov. 1.

The trust, Hawaii's largest landowner, was established by the 1883 will of Princess Bernice Pauahi Bishop as a nonprofit trust that educates Hawaiian children.

“;The trustees are committed to the keiki our trust exists to serve, and to the careful management of resources that will allow Kamehameha Schools to education native Hawaiians in perpetuity,”; the statement said.

The trustees are paid far less than the $1 million annual salaries paid to board members in the late 1990s when the Internal Revenue Service threatened to revoke the trust's tax-exempt status. Board members of the then-Bishop Estate resigned, and the trust reformed its pay policies.