The New Jersey Economic Development Authority (NJEDA) Board has approved a new initiative to promote employee stock ownership across the state. Named the Employee Stock Ownership Plan (ESOP) Assistance Program, the initiative aims to encourage the creation of employee ownership models in businesses through feasibility studies and technical guidance.
NJEDA CEO Tim Sullivan stated, "Under Governor Murphy’s leadership, New Jersey has expanded opportunities for equitable economic growth by providing the resources needed for diverse businesses and entrepreneurs to thrive." He emphasized the program's potential to transform financial opportunities for workers and ensure sustainable business transitions.
The ESOP model allows employees to hold interests in a company through corporate stock retained in a trust. This model is intended to generate wealth and financial security for employees while providing succession planning options for businesses. There are currently nearly 90 ESOPs in New Jersey, with plan assets totaling around $65 billion for over 423,000 employees and retirees.
NJEDA Chief Diversity and Inclusion Officer Michelle Bodden commented on the program's objectives, saying, "Reducing economic disparities in New Jersey will contribute to a stronger and fairer economy for every resident and business owner, strengthening the state’s economic competitiveness."
The program is part of a broader initiative that also includes efforts such as a partnership with Rutgers School of Management and Labor Relations to bolster ESOP education. An ESOP panel in March highlighted the benefits and implementation strategies of employee ownership models.
John E. Harmon, Sr., CEO of the African American Chamber of Commerce of New Jersey, expressed his support: "The wealth disparities in our state are significant, and the best way to mitigate them is to first acknowledge the disparity and then apply proven strategies with intentionality to attain meaningful outcomes. The ESOP Assistance Program can be the catalyst to achieving these goals."
Statewide Hispanic Chamber of Commerce President Carlos Medina remarked, "It creates a pathway for building generational wealth, deepening employee engagement, and strengthening small business stability."
In February, NJEDA selected Onyx Partners Group and Lazear Capital Partners as the initial contractors for the program, both of which specialize in ESOP transitions. The ESOP Assistance Program is expected to open applications in early May, with an informational webinar slated for May 28 to provide further details.
Rutgers Institute’s William Castellano added, “Together we are continuing our work to promote the many benefits of employee ownership throughout the State."
