The five Kamehameha Schools trustees stand to receive pay increases of 65 percent to 123 percent under a plan submitted by a court-appointed panel.

Board members Diane Plotts, Robert Kihune, Corbett Kalama and Doug Ing could see their annual compensation jump from about $100,000 to about $187,000, according to the report filed in state Probate Court on Thursday.

Chairman Nainoa Thompson could see his compensation increase to a maximum of $217,500 from the $97,500 he earned last year.

The Probate Court-appointed trustee compensation committee said its recommendations reflect the complexities of a board that sets policy for a $9.1 billion charitable trust.

The recommendations are based on a study by an outside expert, San Francisco-based Mercer LLC, which found that Kamehameha Schools board spends more than twice as much time on trust matters — 2 1/2 to 3 days a week — than do the boards of comparable nonprofit organization and for-profit corporations.

"It is Mercer's opinion that this is a reasonable annual amount of compensation which takes into account the difference between the role of a typical corporate director or exempt organization trustee and that of a KS trustee," the Mercer report said.

PAY HIKES QUESTIONED

Others question the necessity of pay increases of 65 percent or more.

Bill Coleman, chief compensation officer at Waltham, Mass.-based Salary.com., said it's highly unusual for a board to receive such a steep pay hike unless the board was severely underpaid in previous years.

"There aren't a lot of jobs that have a pay increase of 65 percent," Coleman said.

Roy Benham, a 1941 graduate of Kamehameha Schools and a former president of the school's alumni association, said he'd rather see money for pay increases go toward the trust's main purpose: educating Hawaiian children.

Benham said he sees no reason to up the pay since the current compensation levels haven't deterred qualified people from applying for recent board openings.

"Give me a break," he said. "I can understand a cost-of-living increase, but 65 percent or more is a little bit out of hand."

The recommendations require the approval of Probate Judge Colleen Hirai.

Trust spokesman Kekoa Paulsen declined comment until the probate court makes a final ruling on the matter.

TRUSTEE COMPENSATION

Kamehameha Schools, which was established by the 1883 will of Princess Bernice Pauahi Bishop, is a nonprofit trust that educates Hawaiian children. It is one of the nation's largest charities and is Hawai'i's largest private landowner with more than 360,000 acres.

The issue of trustee compensation played a major role in the late 1990s turmoil at Kamehameha Schools.

The Internal Revenue Service threatened to revoke the trust's tax-exempt status due in part to the $1 million a year paid to then-board members Richard "Dickie" Wong, Henry Peters, Lokelani Lindsey, Gerard Jervis and Oswald Stender.

The IRS later settled with the estate after board members resigned and the trust reformed its governance and pay policies.

The trustee compensation committee was set up in the aftermath of the controversy to cap trustee pay at "reasonable" levels.

In 2004, the committee recommended increasing the maximum pay for a trustee by more than 70 percent to as much as $180,000 for regular board members and $210,000 for the board's chair. The probate judge approved most of the increase but all five trustees agreed to turn down the raise.

SKEWED COMPARISONS

The current committee — whose members include Kamehameha Schools alum Michael Rawlins, insurance executive Douglas Goto and attorney Rosanne Goo — said its recommendations are based on an analysis of board pay at multibillion-dollar foundations, publicly traded corporations, for-profit real estate investment trusts and some local publicly traded companies such as Bank of Hawaii Corp. and Alexander & Baldwin Inc.

The Mercer study did not include the pay policies of local nonprofit boards due to "lack of comparability," the committee said.

Board members of most local nonprofits receive no pay for their work.

Salary.com's Coleman believes the report might be skewed toward the higher end due to its inclusion of for-profit corporation.

He believes a more accurate study would have compared Kamehameha Schools board pay with that of large tax-exempt organizations such as the $12.3 billion in assets of the Ford Foundation and Robert Wood Johnson Foundation, which holds $9.4 billion in assets.

Board members of those foundations receive $21,500 to $46,500 a year.