Trendspotting: Market Basket suspends CEO amid investigation
By
Craig Levitt
Trendspotting: Market Basket suspends CEO amid investigation
The more things change….
Almost 11 years ago, Market Basket's board of directors fired Arthur T. Demoulas, president and CEO, along with two other executives: Bill Marsden, director of operations; and Joe Rockwell, vice president of grocery. Combined, the three men had been with the company for more than 110 years. A few months later the company was sold and Demoulas and his team returned to power.
Earlier this week, the executive committee of the Market Basket board of directors placed CEO Demoulas and several other employees on paid administrative leave while an investigation is conducted into the CEO’s conduct. The investigation will include a review of allegations that Demoulas began to plan a disruption of the business and operations of Market Basket with a work stoppage.
The executive committee believes that Demoulas and others have taken these steps as improper retaliation for the board’s directives requiring the CEO to work with the board regarding corporate oversight and to provide the board access to key employees.
Demoulas has also resisted an appropriate succession plan for Market Basket, asserting that he has the unilateral right to appoint his children to succeed him without any consideration of the view of the board or the majority owners of Market Basket.
The company said at a time of great economic uncertainty for many households, such work stoppages would significantly harm and broadly disrupt Market Basket’s stores and operations across New England, as well as its valued customers, associates and vendors.
“Market Basket stores provide a place that our local communities consistently count on for both their livelihoods and daily needs — the board has a responsibility to safeguard the company’s effective operations now and well into the future,” said Steven J. Collins, director of Market Basket.
While on leave, Demoulas will continue to be paid his full salary and share in all company distributions. During this time, the board will rely on the existing management team to ensure that the operations of the 90 stores will be uninterrupted.
There will be no changes for the company’s dedicated associates in their jobs, salaries and benefits, including the company’s profit-sharing plan, and the ownership of the business will not change. For shoppers, Market Basket will continue to provide its customers superior products and service at prices they have come to expect.