40 years of DAI

Transition
These successes and failures were important
because they highlighted a big and still unanswered
question: what was the future of DAI’s
own leadership? Through the whole decade, it
was clear that there would be a transition—the
question was when.
Despite some reservations, Mickelwait got the
process under way by beginning to divest his
ownership stake in DAI. By 1995, the employee
profit sharing plan (which had first received
shares in the 1981 cash crisis) and Mickelwait
each owned approximately 37 percent of
the shares, and other employees owned the
balance, Barclay’s being the largest individual
holding (9 percent). After securing Board approval,
DAI hired an attorney to transform the
profit sharing plan into an Employee Stock
Ownership Plan (ESOP), which then offered DAI
a tax-advantaged way to buy back shares from
the founder. Mickelwait agreed to sell his shares
over a 12-year period, either to the ESOP or to
other employees who might want to buy them.
The first sale to the ESOP was executed in
1995. Although the Board hoped other employees
would step up and buy some of Mickelwait’s
shares, the steady rise in the stock
price—coupled with some uncertainty about the
company’s succession plan—limited demand,
and the ESOP gradually accumulated a larger
and larger share of DAI’s ownership as Mickelwait’s
declined.
DAI’s corporate governance was also undergoing
a sea change. For years, the Board had
been mostly amenable to the wishes of the CEO
and largest shareholder. There had always been
a few “outside” directors, but up to that time,
most had been elected from the ranks of management
and senior staff on a rotating basis. By
1997, however, the DAI Board had some strong
and thoughtful independent directors. David
Gunning had been there since the beginning.
After overseeing
nearly a decade of
tremendous company
growth as President,
Tony Barclay became
DAI’s CEO on April 9,
1999.
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