EDITORIAL
Trustees did right by Kamehameha Schools

Kamehameha Schools trustees have turned down their first opportunity for a pay raise since the estate was reorganized in 1999 following allegations of greed and mismanagement against the former board.

We commend their prudence and, presumably, their sensitivity to the crisis of confidence that brought down their predecessors, who made annual salaries of $1 million, and perhaps felt they had to meddle more intensively in the estate's affairs to justify their compensation.

That is not the job of trustees. Indeed, it has been our contention that trustees should be limited to the part-time task of setting broad policy and long-term goals. Those policies should be implemented by full-time executives who manage the day-to-day operations.

In turning down the raises, it appears trustees have taken to heart the suggestions of such representatives as Pohai Ryan, president of Kamehameha Schools Alumni Association's O'ahu region, who said: "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."

A court-appointed panel in January recommended almost doubling the pay of trustees to $180,000 and further boosting the chair's pay to $207,000. Probate Court Judge Colleen Hirai went on to approve a structure raising trustee pay to $165,000 and the chair's pay to $210,000. That's a 70 percent raise.

As it is, Kamehameha Schools trustees are paid in the top 2 percent among public charity trustees.

Granted, compensation is relative when you consider that former Tyco CEO Dennis Kozlowski made nearly $467 million in salary, bonuses and stock during his four years running the company into the ground.

But trustees are not CEOs. Indeed, there are some who question why they should receive any compensation at all. Proponents of that line of thinking point out that the Charles Mott Foundation, with assets over $3 billion, and the David and Lucile Packard Foundation, with assets over $13 billion, haven't had difficulty in recruiting trustees of stature and have never paid for board service.

Similarly, large public charities such as Stanford University, the American Red Cross, Boy Scouts of America and the Art Institute of Chicago are led by boards composed of corporate executives, policy-makers, academics and nonprofit leaders of significant reputation who serve without compensation.

As Kamehameha Schools moves forward, trustee compensation must be debated in the context of these and other concerns. By all means, let them be compensated. That said, we appreciate the board's rejection of increased pay at a time when public sentiment is clearly against anything that can be construed as corporate greed. We can only hope they have set an enduring precedent.