When Peter Cancro was 17, he took out a loan to buy the sandwich shop he worked at in Jersey Shore. Fifty-one years later, that shop has grown into a nearly 3,300-location national chain — and as of July 30, a publicly traded company.
Jersey Mike’s went public at about a $7 billion valuation, with shares pricing in the middle of their IPO range before slipping slightly in early trading, according to Business Insider.
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The debut marks the first time Blackstone has brought one of its broad-based employee ownership programs to the public market, offering an unusually detailed look at how it works in a way that previous private deals didn’t require.
Who gets the bonus and who doesn’t
Blackstone announced in May 2024 that all future U.S. private equity control investments would include broad-based employee ownership programs. Jersey Mike’s is the first company to go public under that commitment.
Here’s how it works: corporate employees — the 293 people working at Jersey Mike’s New Jersey headquarters — are eligible for bonuses ranging from 0%–200% of their eligible compensation. The payouts are funded directly by Blackstone’s IPO proceeds, Business Insider reports.
The final amount depends on Blackstone’s return on its original investment and may be prorated based on how long an employee has been with the company. To qualify, employees must have been at the firm for at least one year at the time Blackstone gives up control.
Executives will also receive stock grants, aligning their incentives with investors in the more traditional private equity fashion.
What the plan doesn’t cover is just as notable. Franchisees, their sandwich-making staff and employees of corporate-owned stores are all excluded. That means the people actually slicing the deli meat and assembling the subs — the vast majority of people whose daily efforts helped build the brand — won’t receive any of the bonus pool.
The bigger picture: Private equity’s profit-sharing moment
The Jersey Mike’s IPO is Blackstone’s first public demonstration of a strategy the private equity industry has been building toward for years. KKR pioneered the model through its nonprofit Ownership Works. Since 2015, it has awarded billions of dollars in equity to more than 120,000 non-management employees across more than 55 companies.
Notable examples include Ingersoll Rand, which has granted equity to more than 28,000 employees since 2017, and Lineage Logistics.
Jersey Mike’s had 293 corporate personnel eligible for the program as of the end of last year. Blackstone-owned Copeland, which filed for an IPO at that time, has 18,000 employees eligible for similar benefits.
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“In what we’re trying to do across our portfolio, broad-based equity ownership is just a part of a much more important path,” Joseph Baratta, Blackstone’s global head of private equity, told ImpactAlpha in 2024.
Across its portfolio of more than 270 companies, Blackstone says it employs about 700,000 workers worldwide.
What Blackstone changed and what it didn’t
In less than two years, Blackstone has reshaped Jersey Mike’s leadership. It brought in Charles Morrison as CEO — the executive who led Wingstop through its 2015 IPO — replacing founder Cancro, who moved to a board role, Business Insider notes.
A new executive team followed, including a chief financial officer from Wyndham Hotels and a chief operating officer from Jeni’s Ice Cream. The company’s first post-acquisition board included the former CEO of Dunkin’ as chairman alongside the current CEO of Abercrombie & Fitch.
What Blackstone didn’t touch were the sandwiches. Portions have stayed the same, deli meat is still sliced fresh in store and, according to a source familiar with Jersey Mike’s operations cited by Business Insider, the company has kept the same suppliers since the acquisition.
The future
The IPO values Jersey Mike’s at roughly the same level, including debt, as the $8 billion Blackstone paid for its controlling stake in 2024.
Business Insider says that’s a sign Blackstone plans to hold onto its roughly two-thirds voting stake for years while the chain works toward its goal of 7,500 U.S. locations and 15,000 worldwide. The firm has shown patience before, holding Hilton shares for more than four years after that company’s IPO.
For the 293 corporate employees waiting to learn the size of their bonuses, the final payout will depend on whether Blackstone’s bet on sub sandwiches delivers the returns it is expecting.
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This article originally appeared on Moneywise.com under the title: Jersey Mike’s employees may see a 200% bonus post-IPO — how majority shareholder Blackstone is sharing profits
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