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The Honolulu Advertiser
Posted on: Saturday, January 17, 2004

State opposes trustees' pay hike

By Vicki Viotti
Advertiser Staff Writer

The state attorney general yesterday filed its objection to proposed pay raises for the five trustees of Kamehameha Schools, arguing that the new salaries, nearly double current levels, would far exceed compensation for trustees at other public charities.

JONES
The legal objection was filed in state Probate Court in response to the recommendations of the court-appointed Trustee Compensation Committee. The court, which must approve the plan, has scheduled a Jan. 23 hearing on the proposal to increase the annual salary of each trustee from $97,500 to $180,000. The chairperson would be paid $207,000, up from $120,000 a year.

The attorney general is recommending that Kamehameha keep trustee pay where it is, which, according to the court response, is already higher than what trustees earn at 98 percent of public charitable trusts.

School officials have declined to comment before the hearing. Colbert Matsumoto, who heads the committee, was traveling and could not be reached yesterday.

Hugh Jones, the deputy attorney general who wrote the response and represents the state in Kamehameha trust concerns, said the compensation proposal also has been endorsed by the court-appointed master handling the trust, attorney Benjamin Matsubara.

However, Jones' response criticized only the committee's report, which was based in part on the advice of Martin L. Katz, an executive compensation consultant with Mercer Human Resources Consulting.

The committee argued that "for the foreseeable next few years, being a Kamehameha Schools trustee is virtually a full-time job." But Jones argued that the workload being analyzed had been especially heavy because the trust lacked a chief operating officer. A chief operating officer has since been hired.

"The committee has been looking at what the trustees have had to do for the last year or so, and they want to set pay for the foreseeable future based on a past, temporary situation," he said.

According to the state's objection, Mercer included pay scales for large private foundations in its comparative analysis and reported the compensation for other Hawai'i trusts, including the Lili'uokalani Trust, as being higher than it is.

The community of Kamehameha graduates is buzzing about the committee report — in part, said Jan Dill, because it was not consulted. Dill is president of Na Pua a Ke Ali'i Pauahi, a nonprofit organization formed to support the will of Bernice Pauahi Bishop, the school founder. He said communication between school administration and the community has been vastly improved in recent years, but deliberations over trustee compensation has not included the school beneficiaries.

"The court has not sought input, and frankly, I think that's a mistake," he said.

LeRoy Akamine, a 1952 Kamehameha graduate and a past president of the alumni association, said the proposed raises are too high and come too soon on the heels of a low-earning period for trust investments.

"However, I am confident that our trustees will waive some or all of this proposed pay increase," Akamine added.

Reach Vicki Viotti at vviotti@honoluluadvertiser.com or 525-8053.