Executive Compensation at Hippocrates Health Institute

The Hippocrates Health Institute (HHI) – a non-profit 501 (c) (3) that operates out of a 50-acre tropical setting in West Palm Beach, Florida – provides educational and instructional services to teach individuals how to live and eat healthier for a fee (referred to as “program service revenue”). HHI is not a charitable organization that relies on donations; instead HHI relies on  program service revenue paid by those who choose to enroll and/or attend the Institute.

The organization raises about $17-$18 million a year – primarily through program service revenue – and spends about $16 million (although this varies year-to-year) in eight areas:

• $8 million on staff and benefits
• $2 million on occupancy, office, insurance, and travel
• $1 million on food
• $1 million on fees for services (management, legal and accounting)
• $1 million on advertising and promotion
• $1  million on therapists
• $1 million on supplies
• $ 1 million on other expenses

For those attending HHI, about half of their revenue goes towards paying staff while about 30% is used to pay the administrative costs (i.e. occupancy, office, insurance, advertising, promotion, management, legal, accounting and other expenses) while  the remaining 20% is used for food, therapists, and supplies.

Given that staff costs eat up about half of revenue, it is important to note HHI reported employing 200 employees (2016) who were compensated $8 million.  However, 2 people – Brian R Clement and his wife, Anna Maria Gahns-Clement (although she is listed on the 990 as “Anna Maria Gahns” serve as President and Vice President and received total compensation of $1.3 million (see below in the list of the 6 most highly compensated staff):

• $837,699:  Brian R Clement
• $448,013:  Anna Maria Gains-Clement
• $201,050:  Michael Allen, VP of Operations
• $132,264:  Carole Bianco, Director of Finance
• $128,660:  Pamela Knapp, Nurse Coordinator
• $105,911:  Marty Hall-Landau, Salon Manager

If the total salaries of the above staff – about $1.9 million or 25% of the total staff costs – were considered separately, then about $6 million in compensation was provided to 194 staff, which equates to an average compensation of $31,000 – meaning there appears to be a few people paid a lot of money and a lot of people paid significantly less.

It is also interesting to note that the website for HHI only lists Brian R Clement and Anna Maria Gahns-Clement as Co-Directors. An inquiry into the 990 shows there are 5 other directors:

• Robert Clement (who is related to Brian R Clement although the 2016 990 does not provide this information).
• Anna Helena Birgitta Brand
• Soloman Gabbay
• Shula Gabbay
• Julia Loggins

Soloman Gabbay and Shula Gabbay appear to be husband and wife and it is unknown if Anna Helena Birgitta Brand is related to the Clements (possibly a daughter?) because the IRS Form 990 (2016) does not provide information on relationships of board members and management.

And, finally it is important to note that HHI has about $27 million in net fund assets concentrated in land, buildings, and equipment and publicly traded securities.

In closing, it is important to point out that it’s not that HHI doesn’t do good things – they do teach people about healthier lifestyles – but if people can afford to pay the program fees.  Although HHI is technically a non-profit, there are those who would refer to it as an expensive spa that also teaches educators its principles.  The organization also does not appear to be managed with independent directors; instead it appears the Clement family (at least 3 members and possibly 4 out of 7 directors) runs this organization and greatly benefits financially from it.

To read the IRS Form 990 (2016), click here.