CEO of Market Basket suspended as investigation is launched
The chief executive of a 90-store, family-controlled New England grocery store chain has been placed on leave.
The executive committee of the board of directors of Market Basket has placed CEO and minority shareholder Arthur T. Demoulas and several other company employees, including his son and daughter, on paid administrative leave while an investigation is launched into the chief executive’s conduct.
Market Basket said the investigation will include a review of “credible” allegations that Demoulas had started planning a disruption of the business and operations of Market Basket with a work stoppage.
“The executive committee believes that Mr. Demoulas and others have taken these steps as improper retaliation for the board’s directives requiring the CEO to work with the board regarding the most basic corporate oversight and to provide the board access to key employees,” the board said in a statement.
The statement also said that Demoulas has "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.”
A spokesperson for Demoulas said he was "ousted" from his position as president and CEO by his three sisters and their three appointed board members: Jay Hachigian, Steven Collins and Michael Keyey, according to a report by CBS News. The spokesperson called the investigation a “farcical cover for a hostile takeover.”
The board said that a work stoppage at a time of economic uncertainty “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 said it will rely on Market Basket’s existing dedicated management team to ensure that the operations of the 90 stores will be uninterrupted and “maintain the quality, experience, and superb service that customers expect and enjoy.”
