Sign up for the Today newsletter
Get everything you need to know to start your day, delivered right to your inbox every morning.
Market Basket executives push back on the board’s claims about Arthur T. Demoulas
An executive told the Boston Globe it’s “preposterous” to allege that "Artie T." was planning a walkout.
Top Market Basket executives supporting CEO Arthur T. Demoulas are denying claims that he was orchestrating a potential work stoppage to safeguard his position at the company.
On Wednesday, Demoulas and other employees were placed on paid administrative leave by the company’s board of directors amid simmering tensions between the board and the CEO.
The board stated that Demoulas refused to cooperate in business matters and alleged that he was planning to implement a work stoppage as a form of retaliation.
However, two top executives have told the Boston Globe that this allegation is baseless.
Advertisement:
“The accusation that the management team … is somehow involved in planning a walkout is false,” Joe Schmidt, director of operations for Market Basket, told the Globe. “The assertion that, because the board feels that he has differences with them, would have him want to stage a walkout of some type is preposterous.”
The family feud is resurfacing, following a family dispute that occurred nearly a decade ago, in which Arthur T. Demoulas was ousted from his position by his cousin. Rather than accept new management, workers decided to take a stand by walking out and staging protests.
Advertisement:
About six weeks later, Arthur T. Demoulas reached a $1.6 billion deal to buy the company’s shares from rival family members led by his cousin, Arthur S. Demoulas. The company only recently paid off the debt, in December.
Previously:
However, the fighting now appears to be among Demoulas’s immediate family. According to the Globe, Arthur T. owns a 28% stake in the company, and his three sisters, who helped him finance the 2014 purchase, own 60% of the company.
In statements released earlier this week, the executive committee said Demoulas was resisting directives requiring him to comply with the board’s “most basic corporate oversight” and provide them with “access to key employees.”
The board also stated that Demoulas was disregarding the board’s succession plan and insisted that he has a “unilateral right” to appoint his children as his successors.
The board also placed Demoulas’ son, Telemachus, and daughter, Madeline, as well as several other top executives, on paid leave.
The Boston Globe reports that Schmidt and Tom Gordon, the top grocery supervisor, were among those put on leave.
In interviews with the Globe, Schmidt and Gordon stated that neither Arthur T. Demoulas nor anyone in management was planning a work stoppage due to the potential damage it might cause to the company.
Advertisement:
The two said Demoulas, who is 70, has given no indication of wanting to retire and has tried to cooperate with the board.
They told the Globe that Demoulas believes the board members overreached with several of their requests, including that Demoulas not appoint any of his children as successors and not commemorate the 10th anniversary of the 2014 boycott.
“By them overreaching, certainly it has created a pushback,” Schmidt told the Globe. “That’s just not how organizations are run, never mind Demoulas Super Markets [Inc.]. It’s not in the best interest of the board to try to make day-to-day decisions for the company.”
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com