GAI Consultants

An ESOP comes full circle
Written by: 
Christine Fisher
Produced by: 
Ian Nichols

From GAI Consultants’ office in downtown Orlando, Florida, CEO Gary DeJidas feels immense pride looking across the city’s skyline. But he also can’t help but reflect on what’s less visible—GAI’s history and its future.

Thirty-five years ago, DeJidas launched the Orlando office of GAI, a Pittsburgh, Pennsylvania-based engineering, planning and environmental consulting firm with 24 offices in 11 states.

Many things have changed since DeJidas joined GAI in 1972—the company has grown from 70 to 900 employees—but much is the same. Notably, the employee stock ownership plan (ESOP) structure that was instituted so the original owners could retire, leaving the company under DeJidas’ guidance, remains.

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Among other benefits, the ESOP has enabled GAI’s growth and geographic expansion, improved the company’s retirement offerings, boosted employee morale, and helped increase employee retention. Now, as DeJidas prepares to retire, the ESOP will allow him to pass the company and its culture on to the next generation of GAI leadership.

Putting a stake in Orlando

DeJidas began climbing GAI’s corporate ladder in 1972, when he took a job as a civil engineer in GAI’s Pittsburgh office. There, he became a design engineer and contributed to roadway and land development projects.

In 1982, DeJidas and his family moved to Orlando, so he could open a GAI subsidiary, GAI Consultants-Southeast, Inc., in the city perhaps best known for the whimsical—Walt Disney World and more than a dozen theme parks.

“It was hard breaking in,” DeJidas remembers, thinking back to the time he spent building GAI’s reputation in Florida. “I was coming from Pittsburgh and had no real experience here in Orlando, so it took several years to get opportunities.”

In 1985, DeJidas and his Florida-based colleagues made their first big splash with Orlando’s Orange Avenue Streetscape project, which replaced aged underground utilities, widened sidewalks, added trees and pedestrian amenities, like benches and bus shelters, to a four-lane state highway. GAI was responsible for the design, preparation of construction documents, acquisition of permits for sanitary and storm sewer replacement and monitoring construction.

That $3.5 million project was hailed for boosting businesses, conserving energy, reducing pollution, beautifying the corridor and improving traffic circulation. It has had a lasting impact on Orlando by making the street more accommodating to new development, shoppers and commuters alike. And, it is still among the projects DeJidas is most proud of completing.

Under DeJidas’ leadership, GAI Consultants-Southeast, Inc., grew to more than 100 professionals in Orlando and Jacksonville, Florida. GAI-Orlando also became the anchor tenant in the GAI Building, the first privately developed green office in downtown Orlando. The sleek and modern seven-story office building has a curved glass entryway and 105,000 square feet of office space, of which GAI occupies 65,000 square feet.

For DeJidas, becoming the anchor tenant in that LEED Silver building was a milestone in his 45-year career, as it gives the firm a landmark in Orlando.

Preserving culture through ESOP

When, in the late ‘80s, GAI’s original owners, who had founded the firm in 1958, began thinking about retirement, they asked DeJidas and others to take over. But doing so was a heavy lift, and DeJidas would need to come up with $2 to $3 million to buy the owners’ stock. Not in a position to leverage that kind of cash, DeJidas came up with an alternative: employee ownership.

In fact, it was a blend of an ESOP trust and traditional, direct stock ownership. Under this structure, the ESOP trust and employees began purchasing the founders’ stock in the late ‘90s, and by the time DeJidas was named president and CEO in 2003, GAI had bought out the original seven shareholders.

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Today, 45 percent of GAI’s stock is directly owned by employees. The remaining 55 percent of stock is in the ESOP trust.

By all accounts, this employee-ownership structure has been a boon to GAI.

The company has invested a significant amount of money into its ESOP trust, and today it has a cash balance of more than $5 million. That allows GAI to offer generous retirement plans to its employees and to be self-insured for both professional liability insurance and medical insurance—an especially cost-saving advantage.

Engineering future leaders

While DeJidas acknowledges the ESOP boosts employee retention, it’s not the only factor that keeps employees sticking around.

In 2009, several years after DeJidas was named GAI president and CEO, he launched GAI University, an internal training program through which GAI employees can take technical training classes and, if they choose, even earn their MBA.

DeJidas saw this program as a way to pay it forward and to ensure that GAI was training senior leaders so that it could promote from within, he says.

“I was very fortunate when I came to Orlando,” DeJidas says. “I basically started a business from scratch. I learned a lot about business on the job, but unfortunately, a lot of people don’t have that exposure.”

Now, GAI partners with DeJidas’ alma mater Point Park University, which sends professors to GAI’s Pittsburgh office. Employees there can simply go down the hall and attend class once a week. Employees scattered throughout the country are invited to join online through video conferencing.

GAI covers half of the cost of tuition, and employees are responsible for the remainder. So far, 40 GAI employees have earned their MBA through the program, and another 10 are currently completing the coursework.

“The two-year MBA program seemed like a perfect solution to give senior staff exposure to business that they probably did not have because a lot of us are technical people—engineers and scientists—and our experience in college does not include a lot of business training,” DeJidas says.

Passing the torch

All of that foresight is paying off. In June 2017, as part of a detailed succession plan, DeJidas passed the role of president to Anthony Morrocco, an internal MBA graduate who served previously as GAI’s executive vice president and chief operating officer. DeJidas will remain CEO and chairman of the company’s board of directors for several more years, to ensure a smooth leadership transition.

The very same ESOP that allowed DeJidas to become president and CEO as the founders retired, will allow DeJidas himself to follow suit, retire and leave the business in good hands.

And, with the hindsight of 45 years, DeJidas knows just how GAI has evolved.

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“When I took over in 2003, we really made a concerted effort to grow the company,” he says.

At that time, GAI still had only a handful of offices—about six or seven—and somewhere around 300 employees. Today it has 24 offices and close to 900 employees. The company has experienced growth and financial success year over year, and, in 2018, will celebrate its 60th anniversary.

A good foundation, no doubt, for GAI’s next leaders.

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