TEWKSBURY, MA - The Market Basket Board of Directors has recently retaliated against Arthur T. Demoulas and two other executives, firing all three from the company. Lowell Sun reports that Bill Marsden, Market Basket’s Operations Director, and Joseph Rockwell, Vice President of Grocery Sales and Merchandising were the two other executives that have been let go.
A statement released by the Board indicates that Arthur T. was not re-elected president and will not retain any management responsibilities moving forward. He will, however, remain a shareholder of the company.
News of the firing comes just a couple months after Arthur T. strongly criticized the Board and potential changes to the company’s profit-sharing plan. In the fiery four-page letter, Arthur T. called the Board “naïve” for thinking that the company’s associates and plan participants believe that the Board is acting in their best interests. For more on this story, click here.
Gallagher & Cavanaugh, the Lowell law firm that represents Arthur T., said that the Board’s action was “driven by greed” and that board members “threatened his job and litigation” after he had implemented a 4% across-the-board price cut in 2014.
Marsden also released the following statement in response to his firing: “Along with Arthur T. Demoulas, I was also fired as was Joe Rockwell, Vice President of Grocery. Combined we have more than 110 years of service to the company. Our crime was our commitment to Arthur T. Demoulas, the employees, and the promise to customers to always honor the Market Basket commitment to high quality and value.”
The Board consists of seven members, including three independents, two that support Arthur T., and two that support his rival cousin, Arthur S. Demoulas. Last summer, the Board had considered firing Arthur T., arguing that he was spending money recklessly and refusing to accept the authority of the board, according to Boston Globe. Arthur T. subsequently alleged that Market Basket had grown and prospered during his tenure as boss, opening 12 stores and renovating another 11. He further stated that the company recorded net income of $217 million on $4 billion in revenue in 2013.
Boston Globe also reports that Arthur T. has gone on record to say that his cousin would push for price increases and cuts in employee compensation if he was in control of the company. Last June, Arthur T.’s shareholders lost their majority stake in the company, while shareholders affiliated with Arthur S. gained majority stake. A number of lawsuits and countersuits followed thereafter, further complicating the family rivalry.
These disagreements have led Arthur S. and his sister to push for a plan to cash in all or a portion of their shares in the company. Together, their collective ownership stake in the family business equates to around 26 percent of the entire enterprise, according to Boston Business Journal.
The Demoulas Board also elected Felicia Thornton and James Gooch as Chief Operating Officer and Chief Administrative Officer, respectively, and as Co-Chief Executive Officers of the company, effective immediately. The Board states that both candidates are “experienced retail and grocery executives who recently have been serving as consultants to the company.”
“The board believes this new management team will enable Market Basket to maximize its potential and pave the way for continued success in the future,” the statement added.
With Arthur T. now removed from the company, we can only speculate as to the future of Market Basket. It doesn’t appear like there will be an amicable resolution anytime soon to this prolonged debate.
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