Arthur T. Demoulas keeps his CEO job, for now
ANDOVER, Mass. — After a marathon board meeting, it appears Arthur T. Demoulas will remain Market Basket's president and CEO.
Dean Clevesy, the assistant store manager at the Stratham Market Basket, said late Thursday night that he'd received a text message from a regional supervisor indicating Demoulas had kept his job.
"It said, 'we won. Still the boss,'" Clevesy said.
After Thursday's 13-hour meeting, The Eagle-Tribune of Lawrence, Mass., quoted Demoulas as saying: "I am pleased with today's result. I hope to work constructively with the board going forward."
Other media outlets reported the board made no motion to remove Demoulas as CEO.
The meeting was the culmination of the most recent face-off between family factions of the two brothers who founded the chain, based in Tewksbury, Mass., and comes as the organization continues to expand in New Hampshire, with new stores opening recently in Nashua and Bedford.
Recent turnover on the company's seven-member board of directors had swayed the balance of power in favor of Arthur S. Demoulas, the cousin of Arthur T. Demoulas, who was appointed CEO in 2008 and presided over some of the most dramatic growth in the history of the company.
But Arthur S. Demoulas and directors sympathetic to his position maintained that the company was not run by the highest professional standards or with proper deference to the board of directors.
In a lawsuit filed on June 26 to force a board meeting, attorneys for the Arthur S. Demoulas faction, maintained that the CEO's tenure was "littered with related-party transactions between Market Basket and entities owned by Arthur T. or his family members, and by a remarkable unwillingness to defer to the board."
Boston attorney Thomas S. Fitzpatrick represents the George S. Demoulas faction. In a recent statement, he said the board restructuring is part of a effort to "establish best-in-class standards of fiduciary responsibility and policies for the company through strict adherence to the highest principles of corporate governance."
"Moving forward, the majority shareholders anticipate that DeMoulas Super Markets Inc. will emphasize prudent financial management, integrity and accountability to ensure creation of long-term shareholder value and excellence in all aspects of DeMoulas Super Market's operations."
Two board members are appointed by Arthur T. and two by Arthur S., leaving three seats for independent members elected by all the company shareholders. The three independent members are expected to bring a more buttoned-down approach to the company.
One is a certified public accountant with a New York auditing firm, the other a former executive for Sprint Nextel, and the third a management professor at Harvard Business School.
Employees saw the shift as a power grab by shareholders, mostly Demoulas family members, anxious for larger dividends at the cost of the employee profit-sharing plan and lower prices at the company's 71 stores.
T.J. Lavoie, a Nashua resident and an employee of the Market Basket at Somerset Plaza in Nashua, said he received word from coworkers that Demoulas would stay on.
"I am beyond excited. I am so happy for him," he said. "For him to lose his job would have been terrible for the company."
Employee loyalty to Arthur T. Demoulas was evident in the weeks leading up to the vote, with an online petition in his favor gathering more than 35,000 signatures.
As he arrived for the 9 a.m. board meeting, his driver took him slowly through the crowd so he could shake hands on the way in.
"It was like a papal procession," said Steve Paulenka, an employee at Market Basket offices in Chelmsford. "He was very emotional and appreciative. People followed behind the vehicle until police wouldn't allow us to go any further."
Paulenka wanted to make sure he and his entourage of employees got to the Wyndham Boston Andover Hotel by 5:30 a.m. on Thursday, to find the most strategic location for his truck, tricked-out with bunting and placards proclaiming their support for company CEO Arthur T. Demoulas.
"We wanted to get the best parking space so the directors would see it on their way in," he said.
As Market Basket trucks drove by on Interstate 93, which was visible through a fence along the hotel perimeter, drivers honked their horns to the delight of the crowd, triggering wild applause each time.
Chuck Tsouprakos of Windham, N.H., who works at the Nashua store on the Daniel Webster Highway, said it was telling that Arthur T. Demoulas arrived in a modest compact car and shook hands on his way in.
"That's what he drives," said Tsouprakos. "I have known him since I worked at the first store in Lowell. He is a down-to-earth guy. That's why he's getting so much support out here. He comes into the supermarkets and pulls out carts for customers. He comes up to me and asks me how my parents are, how my sisters are. He knows them by name."