The New Jersey Economic Development Authority (NJEDA) has taken a major step in expanding employee ownership opportunities by selecting Onyx Partners Group and Lazear Capital Partners to support businesses in creating Employee Stock Ownership Plans (ESOPs).
New Jersey already has a strong foundation for ESOPs. The state is home to 88 employee-owned companies, collectively managing nearly $65 billion in plan assets and benefiting more than 423,000 employees and retirees. The average stock account for eligible workers in these ESOPs is approximately $188,868.
As part of the forthcoming ESOP Assistance Program, the NJEDA will connect approved businesses with these firms to conduct feasibility studies and provide technical guidance—key steps in transitioning to an employee-owned model. The initiative aims to help companies establish sustainable succession plans while fostering economic empowerment for workers.
Advancing Economic Equity Through Employee Ownership
The ESOP Assistance Program aligns with Gov. Phil Murphy’s broader economic equity agenda. In 2021, Executive Order No. 262 established the Wealth Disparity Task Force to address longstanding wealth gaps, particularly among Black and Hispanic or Latino communities. ESOPs serve as a powerful tool in bridging these disparities by enabling employees to gain ownership stakes in their workplaces, potentially creating generational wealth.
“Under Governor Murphy’s leadership, New Jersey continues to build a stronger and fairer economy,” said NJEDA CEO Tim Sullivan. “ESOPs offer a pathway for businesses to transition ownership while expanding economic opportunities for workers and their families. By eliminating financial and technical barriers, this program will help more businesses explore employee ownership as a viable option.”
Recognizing the potential of employee ownership, NJEDA partnered with the Rutgers School of Management and Labor Relations in 2024 to develop educational programming on ESOPs. Rutgers continues to play a key role in promoting awareness and providing resources for business owners and employees interested in this model.
“By promoting employee ownership, particularly among communities of color, we can help close wealth gaps and empower workers,” said Michelle Bodden, NJEDA Chief Diversity, Equity, and Inclusion Officer. “For Black-owned businesses and workers, transitioning to employee ownership can be transformative—potentially increasing household income by up to 92 percent and ensuring these businesses remain community assets.”
“This program provides business owners with a sustainable succession planning option while allowing workers to directly benefit from their contributions., said” William Castellano, associate director of the Rutgers Institute for the Study of Employee Ownership and Profit Sharing.
What’s Next?
Onyx Partners Group and Lazear Capital Partners were selected through a competitive bidding process in September 2024, based on their expertise in ESOP transitions, feasibility studies, and valuations.
The NJEDA Board is expected to give final approval to the ESOP Assistance Program in March. Once approved, applications will open in early April, providing New Jersey businesses with a new pathway to explore employee ownership.
