Trustee salaries up about 70 percent
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By Vicki Viotti
Advertiser Staff Writer
A state judge yesterday approved a new pay structure for Kamehameha Schools trustees that will probably result in raises of about 70 percent, despite objections by the state attorney general's office and members of the school community.
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Under the decision by Probate Court Judge Colleen Hirai, trustee compensation would go up from $97,500 per year to as much as $165,000. The chairman's pay would go up from $120,000 to as much as $210,000.
Probate Court Judge Colleen Hirai approved the new pay structure yesterday.
It's the first raise for trustees since the trust was reorganized in 1999. Before that, trustee pay was based on a percentage of the estate's gross receipts. For the fiscal year ending June 1998, the five trustees each received more than $1 million.
Nainoa Thompson is the board's chairman for 2004. Other trustees are J. Douglas Ing, Robert Kihune, Diane Plotts and Constance Lau.
Kamehameha spokesman Kekoa Paulsen said the five trustees have not had a chance to discuss the raises. Dee Jay Mailer, the schools' newly hired chief executive officer, said her focus is on the respective roles of herself and the board rather than the compensation.
The network of school alumni has been abuzz since the court-appointed Trustee Compensation Committee proposed the raises last month. Pohai Ryan, president of the alumni association's O'ahu region, said she has heard from many graduates as well as non-Hawaiians who, like the state attorney general, believe the salaries should stay where they are.
Hirai rejected the proposal of the three-member committee to increase trustee pay to $180,000 and the chairman's pay to $207,000.
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She also rejected the counterproposal by the state attorney general, who argued Kamehameha Schools should keep trustee pay where it is, which is already higher than what trustees earn at 98 percent of public charitable trusts.
"I think when the courts address compensation they must be sensitive for the painful process it took for the alumni and the Hawaiian community to reach a place of trust," said Pohai Ryan, president of the alumni association's O'ahu region.
Hirai decided to go with an alternative option presented by Martin L. Katz, an executive compensation consultant with Mercer Human Resources Consulting hired by the compensation committee.
In the approved option, each of the trustees receives a $30,000 retainer. Additionally, the chairman is paid $2,000 per meeting and the remaining four trustees earn $1,500 per meeting. The number of meetings would be capped at 90 per year, double the number of meetings they are allowed to be paid for in the current pay structure.
Hugh Jones, the deputy attorney general who wrote the state's proposal, yesterday said the trustees have been holding more than 90 meetings a year.
"The attorney general's position is still that the trustees are reasonably compensated," Jones said. "If they are going to be paid per meeting, then the allowable meetings should be only official board meetings" and not informal gatherings, he said.
Attorneys Michael Rawlins, Allen Hoe and David Fairbanks served on the compensation committee. After the hearing, Hoe said the ruling "was better than what the state wanted: no compensation."
That was a reference to a 1999 position that has since been rescinded, Jones said.
Ryan last night said that reorganizing the administration into a structure topped by a CEO with a policy-making board was a big part of restoring the trust the community had in the schools.
"I think when the courts address compensation they must be sensitive for the painful process it took for the alumni and the Hawaiian community to reach a place of trust," said Ryan, emphasizing that this was her personal view and not necessarily that of the alumni association. "It can jeopardize the trust that was built should the compensation be perceived as unjust."
Jan Dill and Roy Benham are members of an advisory committee for the CEO and trustees. Dill stressed his frustration that the community was not consulted on the issue. He said the trustees have worked hard but that the goal of pairing a CEO with a board would not call for high salaries.
"I would trust that by a year from now we would see a reduced number of meetings and that the trustees would want that," Dill said.
Benham agreed. "I still don't see what prompted the need for this raise. It seems that they were operating fine."
Reach Vicki Viotti at 525-8053 or vviotti@honoluluadvertiser.com.
