KJT Group Announces Transition to 100% ESOP
Rochester Chamber member KJT Group announced that it is now a 100% employee-owned company. This announcement of the sale to the Employee Stock Ownership Plan & Trust (ESOP) was made to KJT Group employees at a special meeting held at the company’s headquarters in Honeoye Falls, NY.
An ESOP is an employee benefit plan, facilitated through a trust, which provides company stock to employees as part of their retirement benefits. Congress created these plans to make it possible to transfer ownership to employees in a tax-favored way. There are close to 7,000 ESOPs in the U.S. with about 14 million participants. As a 100% ESOP owned company, all of KJT Group stock is now held in trust by the ESOP exclusively for the benefit of KJT Group employees.
“I’ve considered transitioning to a 100% ESOP for the past few years and I’m very happy that this has finally become a reality,” said Founder and CEO Dr. Kenneth J. Tomaszewski. “As a global professional services firm, our hard-working, dedicated employees are the lifeblood of KJT Group. Transitioning to an employee-owned company allows me to reward our employees for their dedication and commitment, many of whom have been with the company for more than 10 years. I believe it creates a more sustainable business model, here in Rochester NY, for our employees and our clients. We expect that providing ownership to employees will lead to greater employee satisfaction, reduced turnover, and a more rewarding work experience. As a 100% employee owned company, we are able to create a more meaningful companywide culture of employee empowerment and responsibility.” Dr. Tomaszewski will remain the CEO and Chairperson.
According to the nonprofit National Center for Employee Ownership (NCEO), extensive research has shown that employee ownership companies outperform non-employee ownership companies by a wide margin. They have been found to grow about 2.5% per year faster in sales, employment, and productivity than would otherwise have been expected, provide 2.2 times the total retirement assets as non-ESOP companies, and provide dramatically greater job stability.
NCEO Executive Director, Loren Rodgers said, “These plans are most often used by owners who would much rather see their company continue with employees as the new owners than some other company or a private equity group. For many business owners, ESOPs are a great way to provide for transition, an issue that is more important than ever with the wave of retiring baby boomers.”