Market Basket’s board of directors voted unanimously Tuesday to remove Arthur T. Demoulas as the Northeast chain’s president and CEO, the company confirmed in an email on Wednesday. The ouster comes after months of disputes between the grocery chain’s top executive and its board.
In May, the grocer’s board placed Demoulas on leave, and its executive committee said it was investigating claims alleging that he planned to stage a work stoppage. Demoulas called the move a cover for a “hostile takeover.”
Tuesday’s firing comes after Demoulas and the Market Basket board worked with a mediator at the start of this month in an effort to resolve their dispute over the chain’s leadership.
“Despite extensive efforts by the Board and Mr. Demoulas to come to terms, the mediation was not successful,” Board Chair Jay K. Hachigian said in the emailed statement.
The grocer’s board filed a complaint against Demoulas in the Delaware Court of Chancery the same day as his firing, alleging that he has stonewalled the grocer’s board in various ways, including not giving it an annual budget, failing to provide advance notice about “significant capital outlays” and banning the board members from entering the grocer’s headquarters in Tewksbury, Massachusetts. The complaint also alleges that Demoulas “hijacked” the succession planning process and had a “secret plan” to foment a consumer boycott and worker stoppage if the board tried to take disciplinary action against him.
The complaint notes that Demoulas contests his termination.
Last month, Market Basket removed Bill Shea — a supporter of Demoulas — from the company board and got a restraining order approved by a judge to prevent former longtime executives Joseph Schmidt and Tom Gordon from entering the grocer’s stores and other properties. Hachigian replaced Shea on the board, which currently consists of two other members: Steven J. Collins and Michael Keyes.
Demoulas’ exit comes a little over a decade after the grocer’s board first ousted him, setting off widespread protests by shoppers and workers that led the company to sell the chain to Demoulas. Demoulas currently owns 28.4% of Market Basket, according to the complaint.
While it’s unclear how consumers and workers will react to the leadership change this time, Hachigian said they can expect Market Basket to continue operating as usual.
“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.
Market Basket runs 90 supermarkets across Massachusetts, Rhode Island, New Hampshire and Maine.
