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Market Basket board votes to remove Arthur T. Demoulas
Tuesday’s vote followed months of escalating corporate tensions and two failed mediation sessions.
Arthur T. Demoulas is out as Market Basket president and CEO following months of escalating corporate tensions and public mudslinging, the company’s board announced Wednesday.
Board members voted unanimously late on Tuesday to oust the embattled leader, who had been on paid leave since May amid an investigation into allegations that he and his allies were planning a work stoppage.
Specifically, the board suggested Demoulas intended to retaliate after board members demanded both access to key employees and collaboration “regarding the most basic corporate oversight.” They also raised concerns about transparency and succession planning in the family-run business.
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A spokesperson for the ousted CEO alleged Wednesday that Demoulas’s firing was “predetermined,” and that the board’s actions were “a farcical cover up for a coup.”
More on Market Basket:
“The so-called investigation was designed from the start to falsely tarnish the reputation of Mr. Demoulas and his leadership team,” spokesperson Justine Griffin charged in a lengthy statement. “Mediation has now demonstrated that to be true.”
A popular leader affectionately known as “Artie T.,” the 70-year-old Demoulas saw a wave of support from some Market Basket deputies and employees, and even a few local elected officials.
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The long-simmering corporate feud pitted Demoulas against his sisters, Caren Demoulas Pasquale, Frances Demoulas Kettenbach, and Glorianne Demoulas Farnham. While Arthur T. controls about 28% of the company, his sisters wield a combined 61%.
Both sides headed to mediation Sept. 3 in hopes of settling their differences, to no avail.
“Despite extensive efforts by the Board and Mr. Demoulas to come to terms, the mediation was not successful,” Market Basket Board Chair Jay K. Hachigian said in a statement.
Both sides had agreed not to comment publicly during the confidential mediation process, he added. Hachigian also said the board has filed in the Delaware Court of Chancery — where Market Basket’s holding company is incorporated — to make Demoulas’s removal official.
The board shared a copy of its strongly worded complaint, which likened Demoulas to a dictator and alleged he “had a long-standing history of exercising his own unfettered discretion as to virtually every important decision at the Company—while ignoring and stonewalling the Market Basket Board.”
The filing also took shots at former board members who purportedly “capitulated to Mr. Demoulas’s bullying tactics” or “willingly did Mr. Demoulas’s bidding.”
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The remaining board members alleged that Demoulas has long “acted as if he were the sole owner of the Company and rejected any form of even the most basic oversight by the Board,” refusing to comply with board directives and insisting that his children succeed him as Market Basket executives.
Demoulas, they alleged, “acknowledged no one’s authority but his own.”
Market Basket’s family feud
The complaint further accused Demoulas of going “scorched-earth” since the board suspended him, two of his children, and a few of his top lieutenants last spring.
“Mr. Demoulas revealed his true colors, that he cared more about getting his own way than about the Company and its constituents’ best interests and future—just the opposite of the carefully cultivated public persona that Mr. Demoulas portrays to the outside world,” board members alleged.
The ongoing schism was years in the making; according to the complaint, the Demoulas sisters began to “professionalize” the board beginning in 2019, but Arthur T. bucked these efforts and at one point even dared board members to fire him.
Market Basket Complaint – Demoulas Firing
Griffin, Demoulas’s spokesperson, said he was “deeply disappointed” the attempts at mediation had failed. She further alleged it was “crystal clear” that neither the board nor Demoulas’s sisters had any intention of reinstating him.
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According to Griffin, Demoulas’s sole focus throughout the corporate feud has been returning to work at Market Basket.
“He knew that there was a path to resolution and he was confident that if the board shared these priorities, agreement could be reached,” Griffin said. “That is why the failure of mediation is so deeply disappointing to Mr. Demoulas.”
She added: “Mr. Demoulas’ passion for the company and his care for the associates remains unchanged.”
Demoulas contests his termination, according to the board’s filing.
“We assure our valued associates and customers that, as we have demonstrated over the past several months, Market Basket will not change its operations, profit-sharing, bonuses or culture, and will continue to offer the best groceries at the lowest prices anywhere in New England — well into the future,” Hachigian said.
Still, Demoulas’s ouster could have lasting implications for the grocery chain. After he was removed from his job in 2014 over a similar family dispute, Market Basket workers staged protests and walkouts, and many loyal customers boycotted the grocer. Demoulas and his sisters later reached a $1.6 billion deal to buy company shares from rival family members, restoring him to power.
But in its filing, the Market Basket board appeared confident about the company’s future without Arthur T.
“Through it all, Mr. Demoulas and his allies have suggested that Market Basket could not possibly function without him and his lieutenants at the helm,” the complaint states. “The record shows that is simply untrue.”
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