- Market Basket CEO Arthur T. Demoulas has been fired by the board of directors after mediation efforts failed to resolve longstanding issues of control and succession.
- The board, appointed by Demoulas’ three sisters who control a majority interest in the company, voted unanimously to remove him as President and CEO.
- Demoulas expressed disappointment over the failed mediation, accusing the board of not acting in good faith to reinstate him.
- The board’s complaint, filed in Delaware court, seeks validation of Demoulas’ termination and criticizes his management style as autocratic and resistant to oversight.
The background: In 2014, Demoulas was ousted from the company, leading to a six-week customer boycott and worker walkout in support of him. The boycott ended with Demoulas and his sisters taking control of the company.
The stakes: The internal conflict has created a tense atmosphere within the company, with concerns about the future leadership, culture, and prices of Market Basket.
What they’re saying:
- “Despite extensive efforts by the Board and Mr. Demoulas to come to terms, the mediation was not successful.” – Board Chair Jay Hachigian
- “It became clear to us that this was not a good faith effort by the board or my sisters to reach an agreement on the issues they created by abruptly placing me and my senior management team on leave.” – Arthur T. Demoulas, via spokesperson Justine Griffin
- “I’m not surprised because his behavior was totally inappropriate. It’s too bad because he was a hero. The employees were really going to bat for him.” – Market Basket shopper Robert Hargrove
- “If he’s really good to his employees and it seems to be thriving here, then I don’t see what the problem is.” – Market Basket shopper Emily Sweeney
The reaction: Unlike the 2014 showdown, which saw significant employee and customer protests, there have been no major protests this time. Shoppers and employees are carrying on like normal, with many focused on the fate of the chain’s famously low prices.
What’s next: The board has not addressed who will succeed Demoulas as CEO. Demoulas still holds substantial influence as he can block any sale of the company to outsiders, requiring an affirmative vote of at least 80 percent of the shares to sell the chain.
