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August 24, 2020

Executive Compensation at Hippocrates Health Institute (2017)

by Anne Paddock

The Hippocrates Health Institute (HHI) – a non-profit tax-exempt 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.

In 2017, HHI raised $17.5 million (which is about the same as the previous year) – primarily through program service revenue (most attendees come for 1-3 weeks and spend about $2,500-$3,000 per week) – and spent $15.7 million (not including $1 million in depreciation):

  • $7.9 million on staff and benefits
  • $2.1 million on occupancy, office, insurance, and travel
  • $1.0 million on food
  • $0.7 million on fees for services (management, legal and accounting)
  • $1.2 million on advertising and promotion
  • $1.0  million on therapists
  • $0.9 million on supplies
  • $1.0 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 158 employees (2017) who were compensated $7.9 million, which equates to an average compensation of about $51,000.  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 5 most highly compensated staff):

  • $846,403:  Brian R Clement, President
  • $451,570:  Anna Maria Gahns, Vice President
  • $199,500:  Michael Allen, VP of Operations
  • $140,371:  Carole Bianco, Director of Finance
  • $132,459:  Pamela Knapp, Nurse Coordinator

As illustrated above, 5 employees received $1.8 million in compensation.  If total compensation were adjusted to exclude the above most highly compensated employees, then 153 employees were compensated $6.1 million, which equates to an average compensation of $40,000.  It is also important to note there are 7 directors, only 2 of whom are independent.  That would make 5 directors related:  it appears that Brian R Clement, Anna Maria Gahns, Robert Clement, Anna Helena Birgitta Brand, and 1 other director (Julia Loggins?) are related. 2 others (Solomon Gabbay and Shula Gabbay) are related.

2 independent contractors received more than $100,000. The four most highly compensated independent contractors were reported to be:

  • $376,697:  Tina Discepola Medical PC in West Palm Beach, FL for consultations
  • $164,000:  Wellness Coaching, Inc. of Wellington, FL for psychologist
  • $ 97,751:  Spectrum Healing Association of Jupiter, FL for psychologist
  • $ 31,481:  Bioenergy Fields Foundation of Montecito, CA for program manager

In summation, HHI is overseen by a Board of seven people, five of whom are related and only 2 who are independent. The President and Vice President of HHI are married and together take $1.3 million in compensation annually – nearly 10% of total revenue.  Nearly $700,000 is paid to three (3) outside organizations – a doctor who runs her own medical office, and two therapists – who provide services to the clients staying at HHI. How HHI is a non-profit, tax-exempt organization is questionable given that most “spas” (after all, medical and psychological services appear to be outsourced) do not share this type of advantageous tax classification with the government.

To read the IRS Form 990 (2017), click here.

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