NJEDA Board Approves Program to Assist Companies in Creating Employee Stock Ownership Plans

$2.7M ESOP Assistance Program aims to reduce economic disparities and create generational wealth

TRENTON, N.J. (April 22, 2025) – The New Jersey Economic Development Authority (NJEDA) Board approved the creation of the Employee Stock Ownership Plan (ESOP) Assistance Program, which will connect applicants with an approved contractor to perform feasibility studies and provide technical assistance. The program aims to increase employee ownership models in the state, which can provide employees with opportunities to have a greater stake in a business, generate sustainable and equitable wealth, and ensure greater financial security.

“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,” said NJEDA Chief Executive Officer Tim Sullivan. “By expanding ESOPs, the NJEDA aims to create life-changing economic opportunities for workers and their families while supporting sustainable business transition plans, strengthening communities and businesses across the state.”

In 2021, Governor Phil Murphy issued Executive Order No. 262, which established the Wealth Disparity Task Force to examine the causes of, and creates remedies for, the longstanding wealth disparities that affect Black and Hispanic New Jerseyans. ESOPs, an employee ownership model in which employees retain interest in shares of a company through holding corporate stock in a trust, can create generational wealth for workers and provide unique succession plans for business owners.

ESOPs are successful nationwide and around the state, creating and sustaining wealth for employee owners. New Jersey is home to close to 90 ESOPs, nearly $65 billion in plan assets covering over 423,000 current employees and retirees, with an average stock account for eligible current employees of close to $190,000. The ESOP Assistance Program will alleviate risks for the business owner as they explore an employee ownership model. 

“Through the promotion of employee ownership models, the NJEDA aims to close racial wealth gaps, preserve diverse businesses, and increase household incomes for working class families,” said NJEDA Chief Diversity and Inclusion Officer Michelle Bodden. “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.”

“We applaud the Murphy Administration and the New Jersey Economic Development Authority’s efforts to provide employees with access to resources that can place them on a pathway to understanding the principles to creating and obtaining wealth,” said African American Chamber of Commerce of New Jersey Founder, President, & Chief Executive Officer John E. Harmon, Sr. “The ability to connect the hard working citizens of NJ, to this level of professional assistance can be transformational. 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.”

“The NJEDA’s support for companies exploring employee ownership through ESOPs is a major win for our members and their employees,” said Statewide Hispanic Chamber of Commerce President and Chief Executive Officer Carlos Medina. “It creates a pathway for building generational wealth, deepening employee engagement, and strengthening small business stability. This initiative is a meaningful step toward a more inclusive and equitable economy across New Jersey.”

In July 2024, the NJEDA entered into an agreement with the Rutgers School of Management and Labor Relations to create educational and informational programming to increase the quantity of New Jersey businesses utilizing an ESOP. In March, the NJEDA and Rutgers held an ESOPs panel with business owners employing employee ownership models, which included discussions on the various benefits of ESOPs, methods of creating and implementing ESOPs, and the cultural and financial impacts of ESOPs on the workforce.

Rutgers is proud of the opportunity to partner with NJEDA as it develops this assistance program,” said Rutgers Institute for the Study of Employee Ownership and Profit Sharing Associate Director and Rutgers Center of Employee Ownership Executive Director William Castellano. “Together we are continuing our work to promote the many benefits of employee ownership throughout the State; from the business owner who is looking for a sustainable succession plan option, to the worker who stands to gain an added benefit through these opportunities, and to the communities these businesses serve.”

An informational webinar on the ESOP Assistance Program will be held on Wednesday, May 28, at 1:00 P.M. To register, click here.

In February, Onyx Partners Group and Lazear Capital Partners were approved by the NJEDA Board as contractors for the ESOP Assistance Program. Both firms are experienced in ESOP transitions, including the design and development of feasibility studies and valuations. Applications for the ESOP Assistance Program are expected to open in early May.

About the NJEDA

The New Jersey Economic Development Authority (NJEDA) serves as the State’s principal agency for driving economic growth. The NJEDA is committed to making New Jersey a national model for inclusive and sustainable economic development by focusing on key strategies to help build strong and dynamic communities, create good jobs for New Jersey residents, and provide pathways to a stronger and fairer economy. Through partnerships with a diverse range of stakeholders, the NJEDA creates and implements initiatives to enhance the economic vitality and quality of life in the State and strengthen New Jersey’s long-term economic competitiveness.

To learn more about NJEDA resources for businesses, call NJEDA Customer Care at 844-965-1125 or visit https://www.njeda.gov and follow @NewJerseyEDA on Facebook, Twitter, Instagram, and LinkedIn.

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