Heated to a boil: Experts say N.J.’s merger market is on fire — and there are few regrets

When you spend three decades officiating mergers and acquisitions, you’re going to see more than a few partnerships that everyone involved regrets.

Bob Anderson, shareholder at Lindabury, McCormick, Estabrook & Cooper P.C., certainly has seen his share.

Anderson, however, believes bad breakups are at an all-time low. Buyers and sellers pleased with their bottom line are often finding ways of making things work out in spite of quibbles.

“What’s making deals successful right now is the fact that, when the acquisitions are made, it’s in the context of a very good economy,” he said. “Even if you don’t find that operations are ideal at the company you’ve acquired, the fact that the economy itself is so strong — that tends to pull companies along regardless.”

For that reason, New Jersey’s merger market has remained at the busiest point in Anderson’s 30-year career over the past two years.

“People are buying and selling businesses at a rate I’ve never seen,” he said. “Sometimes, in the past, you’ve had different industry segments pick up an activity — with one area hot and one slow. Right now, there are buyers with money and sellers who see right now as a time to cash out in every industry.”

Other experts in these transactions, such as Jeffrey Cassin of Scarinci Hollenbeck, have been saying the same.

The defining story of dealmaking as of late has been the mixture of high levels of private liquidity, the recent tax overhaul leaving companies flush with cash and baby boomer company leaders retiring. With these ingredients, the market continued to heat to a boil, Cassin said.

M&A is all about buyers, as well as sellers, trying to predict the future. So, you can look at what businesses have done in the past, but now the future is making some people nervous because of the tariffs. It makes it difficult to predict what the next five years will look like.” — Bob Anderson

Although Cassin said a lot depends on particular circumstances when asked whether deals are more often successful today, he did say that he’s noticed both the buyer and seller side of the coin come to these transactions far more prepared than they did in the past.

“M&A actors have gotten more sophisticated using their legal, accounting and other advisers,” he said. “That allows them to ‘spec out’ their deals, basically just using those advisers to make better deals. And it’s the same on the sell side. Overall, it’s a cleaner process.”

Everyone agrees that sellers probably stand most to gain from deals today, due to the higher prices companies are fetching as larger businesses and private equity firms compete for the same deals.

Cassin said what’s fetching a higher price than ever today are companies that specialize in “human capital.” That means sales forces, IT teams and other employee-heavy operations.

“I think that’s a cool trend, because it means companies are really valuing people,” Cassin said. “And it might not have to do with general unemployment —and firms struggling to find talent —but just what businesses most need today.”

Even if the pricing of businesses is in flux, Cassin doesn’t expect any near-term issues that will make deals more difficult to pull off.

“Even when there is economic slowdown, M&A activity doesn’t always take a hit because you might just see a flip to it being more of a buyer’s market,” he said.

Anderson, on the other hand, wonders how much the international trade situation and new tariffs could start to deflate the ever-expanding appetite for acquisitions.

“M&A is all about buyers, as well as sellers, trying to predict the future,” Anderson said. “So, you can look at what businesses have done in the past, but now the future is making some people nervous because of the tariffs. It makes it difficult to predict what the next five years will look like.”

Without having seen any sort of impact yet, Anderson suspects that the economic saving grace less than perfect partnerships have had over the last few years might soon be a thing of the past.

“As it becomes more difficult to make predictions for what things will look like a few years out, that will make some more uneasy about what deals they’re putting together,” he said. “So far, activity is held up in the face of all that. We’ll have to see if that changes.”

Conversation Starters

Reach Bob Anderson of Lindabury, McCormick, Estabrook & Cooper at: or 908-233-6800.

Reach Jeffrey Cassin of Scarinci Hollenbeck at: or 201-896-4100.

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First National Bank of Elmer may not be down the Shore, but it’s making inroads with seafood industry

When the First National Bank of Elmer got started 115 years ago, it was founded in a barbershop in its namesake Salem County borough. That’s at least an hour’s drive from the Shore.

So, when the bank recently went fishing for a customer segment, what it came up with might be a surprise.

“What we have down in South Jersey is a concentration of seafood businesses,” said Brian Jones, CEO and president of the bank. “And, because of banking industry consolidation, there’s fewer players in that market down there today than there were five or six years ago. And these seafood businesses need new banking partners.”

Not keen to tell the tale about the big one that got away, this community bank is pursuing clients in the South Jersey fishing industry, adding to the small and midsized businesses it already serves in its footprint across Cumberland, Gloucester and Salem counties.  

And the sector is a big one. Nationally, the seafood industry — between harvesters, seafood processors, wholesalers and retailers — generates about $129 billion annually, Jones said. Combined, the country has more than a million jobs in this sector.

The Upper Deerfield branch.

Locally, the combined port of Cape May/Wildwood is one of the largest commercial fishing ports on the East Coast, he added. A recent report put the value of this South Jersey industry at $85 million.

Cold Spring Fish & Supply Co., one of the region’s largest seafood businesses, contributes about 500 jobs to the Cape May County economy — making it one of the county’s largest employers. Another Cape May business, Snow’s/Doxsee, has the nation’s largest allocation for fishing and harvesting ocean clams.

There are more businesses in the region’s fishing industry, mostly tightly held operations that have been handed down from generation to generation. These businesses are looking for banking partners who have similarly long-held ties to the industry.

Therein lies the catch.

“For that reason, this type of lending is not the easiest to break into,” Jones said. “You need to know how to work with this sector if you’re going into it, or you’re in trouble. But if you can do it, you’re in demand.”

The First National Bank of Elmer got into the market with the assistance of Elizabeth Hulitt, the bank’s new senior vice president. She’s a transplant from an acquired banking entity, one of those along the Shore that once eagerly angled for fishing industry clients. She has an expertise in the local industry and has closely worked with the Massachusetts-based regulators that monitor it. 

The amount of harvesting of scallops or clams that can be done locally is controlled by permits those regulators issue. The high price tag on those permits is one of the reasons the industry keeps close ties to bankers.

“You have to maintain your vessel and your fleet, which can be very capital-intensive,” she said. “Also, when there’s an opportunity to add a permit to fleet’s ability to harvest, you have to be in a good liquidity position to do that.”

Like the banking industry, fisheries and seafood suppliers have consolidated over the past few years, which has only increased the value of those permits.

Hulitt added that the industry’s borrowing activity is driven by a swarming number of vertically integrated companies with a fleet of commercial fishing vessels, as well as facilities for freezing and processing products.

“That provides many opportunities for a traditional community bank to work with these companies to provide financing for equipment, real estate and other assets,” she said. “As a bank, we’re very fortunate to have a financing need that we’re able to understand and also see and touch in our own backyard.”

To make sure a loan is successfully recorded under the terms and conditions set by the U.S. Coast Guard, legal experts are often called in for the loan term. 

Some aspects of these loans can be complicated, but Jones said working with his bank’s growing customer niche is not altogether different from other banking relationships. 

And his belief is that — like a number of other industries — the seafood sector prefers a community bank’s more personalized model to the sometimes-wide net cast by larger institutions.

“With people who are running these boats, a lot of their business relationships involve buying and selling in a hands-on way with people they trust, so they want the same thing on the banking side,” he said. “That’s something we want to offer.”

Conversation Starter

Reach Brian Jones of The First National Bank of Elmer at: or 856-358-7000, ext. 0100.

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Hometown hero: URSB, with sole location in Carteret, has become not just local bank, but part of fabric of community

Right in the middle of the borough of Carteret is a century-old institution where Mayor Daniel Reiman, the town’s finance director, Patrick DeBlasio, and other community leaders make sure locals have what they need.

It’s not the Mayor’s Office — that’s two blocks down. It’s United Roosevelt Savings Bank. 

The bank, which also goes by URSB, has its sole bank branch in the borough’s downtown. It only needs the one, because the bank is all about Carteret — that’s why its board of directors is a who’s who of Carteret officials, such as the mayor.

Officially, Kenneth R. Totten, CEO and president of URSB, isn’t a city official. But he’s quickly joining the roster of community leaders himself.

“The primary focus we’ve taken since I joined the bank (in 2015) has been, when something happens in Carteret, we want to be a player in it,” he said. “We want everyone here to call us to see if we can help them with funding. … We want to be the first place locals think of.”

Kenneth R. Totten, CEO and president of URSB. ­

And, when he says he wants to be the first call Carteret locals make, he might be the one answering the phone.

“What I do — on my business cards and any letter I sign, I have my personal cell phone on it,” Totten said. “I encourage people to call me on it if they have an issue. You won’t find that at a larger bank. That’s one of the things that differentiates us.”

URSB is among the smallest banks in New Jersey by most measures. But it’s also one of the largest banks that have just a single physical location. 

And, while it’s also more than 100 years old, it doesn’t look its age. The bank recently updated its Carteret base, inspired by the residential and commercial real estate development projects that the borough is currently undertaking.

“We want to be a vibrant part of that,” Totten said. “So, we spent a significant amount of money renovating the inside and outside of our bank to match the look of the new town.”

Around $1.3 million is the amount the bank dedicated to refreshing its headquarters to match the borough’s larger revitalization.

At a time when banks are stretching their geographic footprint larger than ever, or simply throwing in the towel and finding bigger banks to partner with, URSB is instead content to improve its presence in the same community it always has served.

“Like anyone else, we’re looking to expand, but, when I came on board here, one the very first things I said we need to do is address the needs of those from Carteret,” Totten said. “It’s our hometown. I didn’t feel like we were a vibrant enough part of it, so we wanted that first before we looked at other opportunities.”

And it’s actually paying off. Totten reported that the bank has increased its asset base by $36 million within just the past 15 months. After that growth spurt, which Totten says is unprecedented for a bank of URSB’s size, it now has about $140 million in assets.

Given its singular focus on the Carteret area, the bank’s continued success is very tied in with the prosperity of the borough’s businesses. To that end, the bank rolled out a program that encourages its customers to purchase goods and services from local companies. 

“So, if someone has our debit card and they use it at 15 selected merchants in town, they get some sort of discount, whether it’s a free cup of coffee with a food order or a free tire rotation,” he said. “Our goal is to have between 40 and 50 merchants in this, so we can really assist our local businesses.”

Community banks that have built such strong ties to New Jersey locales are commonly seen as potential acquisition targets for larger, merger-hungry financial institutions.

That doesn’t seem to be in the future for Carteret’s unofficial city hall.

“We’re growing not so we end up just another branch of someone else,” Totten said. “We’re growing to be more a fabric of the community here. And our plan is to continue doing that.”

Conversation Starter

Reach Kenneth R. Totten of URSB at:  or 732-541-5445, ext. 209.

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Secrets to being second-gen business owner come to light at ACG event

As president of IMG Business Advisors in Morristown, Michael Givner said he has seen his share of family business issues.

“Family dynamics can be a very challenging aspect of servicing the middle market,” Givner said while moderating a breakfast meeting hosted by the Association for Corporate Growth’s New Jersey chapter on Tuesday at the Pleasantdale Chateau in West Orange.

The four panelists, however, were all there to discuss how they overcame multiple challenges to take their companies to new heights as next-generation business owners.

“I took every single business and psychology course offered at Baruch College,” said Harvey Wexelman, CEO and president of Alwex Inc., a New York City-based independent insurance agency specializing in high net worth individuals and families. “And, once I could prove to (my father and his partner) that I knew more than them, I was given a nice long leash.”

Wexelman’s father and his business partner founded the company in 1991 after leaving their prior agency. Wexelman joined in 1993 — three years prior to his graduating Baruch College.

“I was 19 years old when I was told I had to take over the business because none of the other kids wanted to be involved,” he said. “So, I went to night school and worked every day for four years to learn the business from the ground up.”

Wexelman said he was at first challenged with taking charge of employees who felt as though he had simply had the business handed to him by his father.

“There’s that initial sort of change, when all the employees hate you because they don’t feel like you’ve earned it,” he said. “But I was told to eat what I killed and that the sky was the limit. I received a $16,000 salary when I took over the company and the only additional money I made was business I brought in.

“And, if I wanted to implement new technology or hire more people, that came directly out of my paycheck.”

Darren Slosberg, CEO of Legacy Converting in Cranbury, said he willingly accepted the challenge to transition his father’s company, Nosaj — a distributor of non-woven and paper disposable wiping products founded in 1971 — into a larger, more lucrative manufacturing company in 2007.

“But my brother and I at first wanted nothing to do with our father’s company,” he said.

Slosberg wanted to open a gym, he added. His brother, Jason Slosberg, wanted to become a surgeon.

However, upon learning that one of their father’s partners was stealing from him, the brothers stepped in to help.

“There was an opportunity for both of us to come into the business and help my father navigate the path in which to get rid of this guy,” Slosberg said.

Though their family bonds never wavered, Slosberg said many heated battles followed.

“We had defined roles, but I thought I was running the company while my brother and my father were also thinking the same thing,” he said. “But we always said, look, I’ll do it the way I want, you do it the way you want and, whichever way works best, that’s what we ultimately will go with.

“My father did a very good job at giving my brother and I the autonomy to make a lot of mistakes.”

After six years working with Nosaj, the brothers transitioned into the manufacturing and private labeling of disposable wiping products when they created Legacy Converting.

“The business has grown 12-fold since,” Slosberg said. “Though my brother and I are still 50/50 partners in the company, I run the day-to-day while he takes a year and a half to live on a sailboat in Croatia, sailing the Mediterranean with his wife and kids.

“He wants to explore and do things outside of the company now, but I still love it. I don’t want to leave. But he, too, is helping me to grow, as I figure out how to incorporate such work-life balance.”

John Conforti Jr., president of Air Group in Hanover, said his family dynamics made business more complicated due to having a third sibling involved.

“When my parents would leave for Florida for a few months, we all tried to run the business without them and ultimately it always came down to pandering for the third vote,” he said.

Conforti Jr.’s grandfather and father started the heating, ventilation, air conditioning, electrical and plumbing company for New Jersey customers in 1965.

However, in 1999 — while Conforti Jr. was working in construction as an engineer — his father merged the company with another family business.

“I called my older brother to ask him why he wasn’t putting his foot in the door and he said, ‘Where have you been?’” he said. “So, I moved back to New Jersey so that my brother, my younger sister and I could battle together with how we were going to move forward.”

The siblings would buy out the shares from the other family in 2012, only to struggle with deciding who ultimately was going to run the business.

“We get along now as well as we ever have, but there were meetings with professional psychiatrists,” Conforti Jr. said. “Aside from our own juggling act behind the scenes, though, we also had to gain the confidence of the employees who we still needed to foster a culture with, like the one that had previously been instilled.”

It was nearly four years ago that the family began to trust in each other and their clearly delineated roles, Conforti Jr. said. Even his brother-in-law has joined the business.

“In the end, the bottom line is what it is and, if the company is profitable, everyone in the family is happy,” he said.

Catherine Choi, president of Bulbrite in Moonachie, said she also quickly realized how a trio of siblings working together in a family business was not harmonious.

“For a very short period of time, my sister, my brother and I all worked in the business — and that was not good,” Choi said. “Working with my sister was great, as well as with my brother, but for whatever reason, having all three of us in the same building at the same time did not work.”

Her younger sister, Choi said, has since happily left the business to pursue other life goals, while her younger brother remains as chief strategist to the leading manufacturer and supplier of innovative light source solutions.

“My father immigrated from Korea to New York City to start this business in 1971,” Choi added. “But, because we have a rule that we must work outside of the family business before we can join, I graduated from college, got my MBA and worked out in Hollywood for eight years.

“Then, when I and the business were turning 30, my dad asked me to coffee and said, ‘No pressure, but I’m turning 60 — if you’re interested in coming into the business, now would be the time. If not, I will plan for the next phase, which may include selling.’

“Then he went on to say how he had come to this country empty-handed, without speaking English and without a dollar in his pocket. So, I joined.”

Choi said that, while she worked her way through the company for eight years before becoming president, she, too, struggled with company culture once her father handed over the baton.

“The success of a second generation and generations beyond that has a lot to do with the first generation, I think, and their willingness to be open minded,” she said. “I think a lot of business owners say they are ready to pass the baton, but they hold on to the other end of it for a really long time. Sometimes, I can tell by the look in my father’s eyes that he might want it back, but he very clearly and truly gave over the business to me when he did.”

When an employee asked her how to address a problem, however, Choi said she was taken aback by Choi’s response.

“I said: ‘I don’t know. You’ve been here longer than me. What do you think?’ And she struggled with that, because my dad had made all of the decisions for 30 years,” Choi said. “But Andrew was not the boss anymore.”

Choi said she then set out to redefine Bulbrite’s culture.

“I hired a culture consultant to help us retain the core values that my father’s business was built on, such as integrity and building relationships with partners, but I also wanted to put my own spin on it, too, to encourage our employees to take ownership, to learn and to grow — just like I had.”

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Ex-employee testifies financial firm used false info to obtain incentives

World Business Lenders recently made a splash in the New Jersey business sphere by aggressively pursuing legislation to govern its operations and creating a partnership with the Statewide Hispanic Chamber of Commerce of New Jersey to help minority small businesses overcome obstacles of access to capital.

But, on Thursday in Newark, WBL made headlines for a different reason: A former employee said the company used false information to obtain and then sell a Grow New Jersey tax credit — which rewards companies for creating and retaining jobs in New Jersey with tax credits ranging from $500 to $5,000 per job.

In her testimony at the second EDA Task Force hearing, Kerrie-Ann Murray said her company made a sudden move from New York City to Jersey City in 2016, and hired and fired about 80 people just to meet the requirements of the Grow NJ tax credit it was awarded for its move.

WBL, in a statement provided to ROI-NJ, vehemently denied Murray’s allegations, saying they came from a disgruntled former employee.

“Before today, World Business Lenders conveyed to the Task Force on the Economic Development Authority‘s tax incentives that there were numerous and serious reasons to believe Kerrie-Ann Murray would not testify truthfully,” the statement said.

“We are bitterly disappointed that the task force has, nevertheless, allowed Kerrie-Ann Murray to provide her biased and unreliable testimony without also allowing World Business Lenders the opportunity to have a witness testify. Kerrie-Ann Murray is a disgruntled former employee of WBL.”

Murray’s allegations are noteworthy.

Doug Naidus, center, is CEO of World Business Lenders.

When it was located in New York, WBL had 80 employees, and needed to hire 100 to 125 more in a two-month timespan, between May and July 2016, after the staff knew it was moving to Jersey City.

Murray said staff were instructed to create a relationship with the New Jersey Department of Labor & Workforce Development to fill the positions, and in that process also benefitted from DOL incentive programs to encourage hiring of individuals on welfare, who live in specific zones, or are veterans, and the company was also reimbursed for half of the hourly wage per employee it hired from a certain pool of unemployed individuals.

WBL then hired the more than 100 people, paid them $10 per hour and created a new department to cold-call small businesses to see if they were interested in and qualified for a loan.

“It wasn’t a role or positions that the company previously used,” Murray said.

“The company does subprime lending, if I can say that, so you would have to be very experienced in sales, experienced in selling, experienced in getting borrowers to actually borrow money at the high percentage rate.”

Murray also told the task force members that the company kept a monthly spread sheet, entitled Grow New Jersey, which tracked the number of employees. It included information such as employee names, positions, hours worked, annual salaries and earned pay per month.

If an employee didn’t meet the full-time hours, managers were asked for reasons. If no reason was provided, Murray said, the company would backfill the hours as paid time off, or PTO.

That went on for about six months, and, in January 2017, the entire department was eliminated.

When employees who were left asked why, they were told it was because the tax credit had been sold.

In a recent interview with ROI-NJ, WBL CEO Doug Naidus said there is a cold-calling department whose operations matched those described by Murray.

The statement also addressed the tax credit being sold, and the rehiring of the cold-calling department.

“In accordance with the Economic Opportunity Act, WBL voluntarily sold (and was not forced to sell) its tax credit for 2016,” according to the statement.

“Under the Act, this is a permissible practice employed by many companies across the state. The reasons for WBL’s decrease in payroll in 2017 is one that would be familiar to anyone who follows industry trends. In the second half of 2016, the fintech credit bubble began to deflate, which led to downsizing across the industry. WBL was forced to reduce its payroll count the following year, even as many of our competitors went out of business altogether. Since then, our industry has recovered and we have begun to hire again.”

But Murray also told the task force Thursday that other falsified information was used to boost the jobs numbers, such as keeping an employee on the payroll even though they had already been terminated while in New York, and the severance pay was kept on the books, just to help maintain the needed number of employees for the grant.

From July to December 2016, Murray said, staff were instructed to, despite constant turnover, maintain a minimum of 225 employees.

The statement from WBL does not address this claim. Instead, it claims Murray was responsible for falsifying information.

“During 2016, Ms. Murray reported incorrect employee headcount information to WBL’s chief financial officer, which was intended to be sent to the Economic Development Authority,” the statement said.

“Ms. Murray proceeded to argue her incorrect data was, in fact, correct despite being proven wrong by management employees. In the end, the numbers submitted to EDA for 2016 exactly match the payroll numbers from ADP, the company’s payroll provider. This well-documented data is clear, transparent and unimpeachable.”

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Opportunity knocks: Sarah Krom has grown into a leadership role at SKC; now, she is helping the accounting firm grow, too

According to the American Institute of Certified Public Accountants, women comprise 50 percent of college accounting program graduates — but less than 25 percent of women are partners at firms. 

That is just one of the reasons SKC & Co. in Boonton Township stands out, Sarah Krom, its managing partner, said. 

“We are atypical,” she said. 

For one thing, her firm boasts a completely gender-balanced leadership team and an employee base of more than 85 percent women. 

Additionally, SKC & Co. — known as “the entrepreneurs’ accounting firm” since 1982 — strives to make work-life balance possible for all, including working parents, Krom said. 

“If our employees are happy and fulfilled, they are going to be the best versions of themselves that they can be for our clients,” she said. 

Including Krom herself. 

Upon graduating from Stockton University, Krom said she began her career at a firm with 25 people. 

“By the time I left nearly six years later, there were 75 people and the firm had grown from six partners to 13,” she said. 

As space in the boardroom grew smaller, Krom said she sought opportunity to advance elsewhere by joining SKC & Co. in 2010. 

“In my previous role, I would go to clients and tell them everything they were doing wrong without being able to help them improve or implement any of the suggestions I was making,” Krom said. “That was frustrating and very unsatisfying.” 

SKC & Co.’s model, however, focused on service offerings for businesses. 

“We help business owners become their best selves, too, both in how they run their businesses and in achieving their own personal goals,” Krom said. “It is different for every client and therefore a much more exciting, diverse and challenging way to work.”

Krom said she felt she had nothing to lose in starting over in a new environment with new rules. So, at her 90-day review, she told the founder of the firm, Mitchell Sharpe, that she felt “a bit bored.” 

“I said, ‘Sure, I have these clients I work with and I’m still learning, but I also like to be challenged,’ ” Krom said. 

A few days later, Krom said, Sharpe asked her to run the information technology department — despite not having a degree in IT. 

“But I was happy to step in where needed,” she said. 

Krom would then take on additional hiring functions, management of the firms’ interns and more. 

Sarah Krom became managing partner of SKC & Co. in 2015.

“As time went on, I took on this director of operations role that hadn’t previously existed while still managing all of my clients,” Krom said. “And Mitch realized that, if I was this committed, I would be a good succession plan.” 

Krom became managing partner of the $5 million to $10 million accounting firm in 2015, working with businesses with revenues from $100,000 to $100 million in a variety of industries. 

“We care less about the industry in which our clients do business and more about the mindsets of the owners — which is really a product of being able to customize so much of what our clients need,” she said. “We especially love to work with entrepreneurs who are willing to step out of their comfort zone to grow and develop strategic plans, speaking with all of our clients (regularly) to ensure we are always in front of them having important conversations.” 

One of which is the overarching theme of change in the gig economy and the future of work.

“You can now have an expansive network of people who work for your company, none of whom live in the same state, which can help to expand the talent pool and allows businesses an edge,” Krom said.

“If you are not a company that is positioned and willing to adapt quickly, you will not be able to remain competitive by only looking at local talent while other businesses think outside of the brick-and-mortar and expand their net to hire employees globally.”

The gig economy creates more fun and interesting challenges for SKC & Co., too, Krom said. 

“Companies are more often bringing in high-level accountants to run special projects or short-term tasks they want to accomplish, which I think is exciting, seeing as we also can offer our team to companies in this way,” Krom said. “There is a lot more opportunity to engage with these short-term commitments and one-off consultations without requiring a recurring contract with different businesses.”

SKC & Co. also has pivoted to help its clients spend more time doing what is most valuable for their businesses, Krom said. 

“For example, we offer virtual assistant services,” she said. “While we cannot be anybody’s receptionist, we do have event planning and marketing services, for example, as well as the ability to schedule meetings and copywrite in addition to paying bills and invoicing.” 

In the near future, Krom said she would like to double her team from 22 to 40 employees — with work benefits being key to the firm’s growth. 

“We have pretty demanding expectations of our team in regard to being on-site with clients,” Krom said. “So, for example, we realized it would be beneficial to provide child care for our working mothers.” 

Krom said SKC & Co. has offered subsidized on-site care for nearly three years, with parents utilizing it between two and five days per week. 

“It is a fraction of the cost it would be to replace any of our employees if they chose to leave or work for a company with less demand,” she said. “My overall philosophy is to help our team be the best version of themselves so that we can provide the most value to our clients.

“That is why we have child care, a wellness program and fitness area, professional development programs and flexible work schedules, allowing our employees to work from home or take on part-time or reduced-hour schedules. 

“It creates a no-excuses environment in which everyone can be at their best.” 

Youth is served

Sarah Krom, managing partner of SKC & Co. in Boonton Township, has served as the youngest president of the New Jersey Society of Certified Public Accountants since June of last year. 

“I also am the third woman to serve out of 97 presidents,” Krom said. 

Krom said that, when she received a scholarship from the Atlantic/Cape May Chapter of the NJCPA in her senior year of college, she was able to graduate without any student loans. 

“I wanted to give back to the organization,” she said. 

Therefore, Krom became a member and got involved in various committees, including what is now the Emerging Leaders Council, the strategic planning committee, the scholarship committee and the board of trustees. 

“My presence then led me to being nominated for president,” Krom said. 

Conversation Starter

Reach Sarah Krom at:

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Paper chase: Credit union leaders can’t understand why N.J. hasn’t gone high-tech with car lien docs

Cumbersome doesn’t begin to describe it.

John Dawidowski of Princeton-based Healthcare Employees Federal Credit Union said he’s seen veritable wheelbarrows full of paperwork being carried off by credit union staff en route to register a car loan lien with the Department of Motor Vehicles.

John Dawidowski

“Then you have all this paperwork on hand — and there’s a cost of maintaining and tracking these titles, too,” Dawidowski said “We have to put them in a fireproof safe. The whole thing is very, very archaic. … It’s crazy.”

When a lien is created by an auto loan, a process that secures the lender’s rights as lienholder to that vehicle until a loan is repaid, it involves stacks of physical documents … or, at least, it does in New Jersey. That’s not true everywhere. 

Almost half of states now spare more than a few trees using what’s called an electronic lien and title system. Credit union leaders like Dawidowski, fed up with the old way of doing things, have been calling for that to be adopted in the Garden State, too.

“I don’t see what the big issue is,” he said. “Next door, in Pennsylvania, they’ve been doing it for 10 years. We could run off the same platform and things would be a lot easier. It’s not rocket science.”

It’s a head-scratcher for Dawidowski, who regularly hears how the transfer of data between lienholders and state departments takes minutes in states that have introduced digital updates to this process.

In New Jersey, credit union leaders say it takes a day and a half of a staff person waiting in all-too-familiar DMV lines and acting as a courier for the title documents.

During former Gov. Chris Christie’s final days in office, the state did sign into law a piece of legislation that would establish an electronic lien and titling system in the Garden State that would modernize the current paperwork-based system.

Alexandra Pais
David Frankil, the CEO and president of the New Jersey Credit Union League, believes an electronic lien and title system is a “no-brainer” for the state.

It mandated that the New Jersey Motor Vehicles Commission complete a study to determine whether the department itself could create an electronic system. Many other states use a third-party software service vendor that manages these title record transfers.

More than a year later, credit unions are still waiting for the promised update.

“The commission has really been dragging their feet … and this is after it took seven or eight years to get to the point where the governor signed this,” he said. “This is something I’ve pushed for as far back as 2011. I went to (the New Jersey Credit Union League) and asked why the state is so far behind on this, because it’s very awkward to deal with.”

David Frankil, the CEO and president of the New Jersey Credit Union League, is among those hoping for progress. 

Besides the extra resources required in dealing with mountainous paperwork, Frankil said having an electronic system could make it more difficult to alter or create fake documents.

“So, not only is it an efficiency issue, there’s fairly strong fraud component, as well,” he said.

Frankil cited a case from back in 2017 in which a handful of individuals allegedly forged letters from lenders stating that loans were repaid and used those letters to get car titles from the New Jersey Motor Vehicles Commission. Then the group allegedly flipped at least 25 vehicles over four years for more than half a million dollars.

The closed loop created in an electronic system would eliminate the potential for this type of fraud, according to Frankil.

For all the other issues that less paperwork could avert, such as lost documents, Frankil believes this is a no-brainer.

“This isn’t self-interested, it’d help anyone financing automobile titles in New Jersey,” he said. “For every possible reason you can think of, it’d be better for us to have an electronic system. It’s better for credit unions, for banks and it’s better for the state to not continue dealing with paper in this way.”

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Lies, damned lies — and opinions on the effectiveness of EDA tax incentives

Another day, another headline about how New Jersey’s tax incentive programs seemingly have been a bad deal for the state.

This one came from the New Jersey Society of Certified Public Accountants. Its poll said 55 percent of CPAs surveyed do not think the Economic Development Authority’s incentive programs have been an effective tool for attracting companies (and jobs) to the state. Only 9 percent, in fact, said they felt the programs were effective.

But do these sentiments match the impact? And do those being polled truly understand how the programs work?

That may be the bigger question. One no poll or study can provide an accurate answer to.

“It’s the type of misinformation that makes my head explode,” said someone who — not surprisingly — feels incentives have been a good thing.

And, who — not surprisingly — does not want to go on record.

The record, however, may speak for itself.

The majority of those responding to the CPA poll (54 percent) said New Jersey’s tax incentive programs should focus on a balance of large and small/midsize companies, while 32 percent believed that the focus should be primarily on small and midsize businesses.

Both answers seem to indicate that EDA incentives go mostly to larger companies.

The reality: Most of the EDA incentives already do go to small and midsize companies. It’s just that those awards do not get the same publicity as the bigger ones.

And, while the bigger ones were recently criticized by Gov. Phil Murphy, some business leaders said their impact should not be overlooked.

So said Michele Siekerka, head of the New Jersey Business & Industry Association.

“We can’t disregard what has gone on in our inner cities of Newark, Camden as well as Jersey City and how the incentive programs have worked,” she said. “We can’t ignore that.”

Tom Bracken, the head of the New Jersey Chamber of Commerce, offered another angle.

The incentive programs have not been as effective as they could have been — but they haven’t been bad, either.

“Look at the numbers,” he said. “Eleven billion is the dollar amount of tax credits given out or granted, but the amount that was utilized I think was somewhere in the $500-600 million area over 10 years.

“So, were they effective? To be effective, they had to induce job creation and capital investment. And because only $600 million was utilized, obviously the job increases and capital investment didn’t happen, or more of that money would have been utilized.

“It’s strictly a numbers thing. They are not wrong, they are just stating the obvious based on the numbers.”

Numbers are, in fact, the key to any discussion involving tax-incentive programs.

Ralph Thomas, the head of the NJ CPAs group, said taxes — not tax-incentive programs — are the real issue.

“Taxes are clearly a subject that New Jersey residents and business owners feel passionate about,” he said. “The New Jersey Legislature would benefit from listening to CPAs, who are in touch with the business community on a daily basis.”

The same sentiment is shared by Mike McGuinness, the head of the New Jersey chapter of NAIOP.

McGuinness said the poll results did not shock him.

“I’m not terribly surprised to see this,” he said. “I think what they are emphasizing is that incentives can be helpful, but perhaps we should be focusing on the more germane issues that every country deals with, like infrastructure and transportation.”

Siekerka said incentives are desperately needed — no matter what anyone thinks of them.

“The consistent message is that incentives are a part of a toolbox that the state has in order to help attract companies to come here,” she said. “When you look at the states we compete with, you have to be cognizant of the fact that those states have incentive programs, so we need to have programs that are on par with those and use as one tool in the toolbox.”

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