by Jack Pollard

Not to channel Rick Pitino, but Arthur T. Demoulas isn’t walking through that door, folks. And if you expect him to walk through that door, it won’t be because the board of directors let him.

It’s a bit ironic writing this piece on the anniversary of August 28, 2014, when Arthur T. Demoulas and his three sisters bought out their cousin Arthur S. Demoulas and his family — securing control of Market Basket, seemingly providing the storybook ending to a decades old family feud where everyone shopped happily ever after.

Everything that has happened over the past two weeks indicates Artie T. will indeed be terminated by the board of directors. Demoulas’s last remaining ally on the board Bill Shea was ousted after 26 years on the board. His other ally, Terry Carleton, was ousted in January.

The votes of Shea and Carleton would be necessary for Demoulas to not only stay CEO — but also have some authority to run the company as it has been.

More to This Story

As the board and Demoulas make preparations for a mediation session in under a week from now, details are beginning to hit the media of what has been happening behind the scenes.

According to the Boston Business Journal, the board of directors: forced Demoulas’s hand on “extraordinary” dividend payouts for his sisters, claims Demoulas has falsified meeting minutes to his benefit, intentionally withheld budget forecasting documents (despite evidence showing otherwise), blocked his two children from any consideration to be his successor, and implemented a spending cap of $10 million before board approval is required.

Perhaps most astonishing is that the board of directors voted to have the company ignore the 10-year anniversary of the 2014 boycott and walkout. A vote Demoulas thankfully ignored.

More For Their Pockets

Reading the Boston Business Journal article, one takeaway is clear: Frances Kettenbach, Caren Pasquale, and Glorianne Farnham want more for their pockets.

In the first eight years after the buyout of Arthur S. Demoulas’s faction, each sister pocketed roughly $80 million in post-tax dividends, while their collective shares swelled by $1.5 billion in value. And that was before the board restarted annual dividend payouts in 2021 — payouts that have since ballooned to “tens of millions” every year.

Yet the sisters, who hold no roles within the company itself, pushed for even more. At the same time dividends were resumed, the board imposed a $10 million spending cap on Demoulas, effectively handcuffing his ability to reinvest in stores without board approval.

Dividends were one of the main points dividing Arthur T. and Arthur S. in 2014, with the latter wanting a higher dividend for the shareholders accomplished through increased prices, scaling back the profit sharing/retirement program, fewer reinvestments into stores, and potentially taking on debt.

When the board decided to place Arthur T. Demoulas on paid administrative leave in May, they had a good public face, assuring the public no major changes were on the horizon.

“There is no insurgent group, there is no one looking to change pricing, there’s no one looking to change employee comp or benefits, profit sharing, all of those things will be the same,” said Chairman Jay Hachicigan outside company headquarters.

However, if the sisters desire continued increases to their dividends, something has to give. As dividends grow, the money will have to come from somewhere, and taking on debt would be illogical. The cost, whether today, tomorrow, or in a year from now will either be at the customers or employees expense — probably both.

One has to wonder if the sisters agreed with Arthur S. all along, but the long, complicated family history was the reason they remained loyal to their brother for as long as they did. Maybe it wasn’t about Arthur T. being in charge for them, it was about making sure Arthur S. wasn’t.

More For Your Dollar … at Stop & Shop?

Earlier this week, Stop & Shop announced in a press release that it was reducing prices on 3,000 items at its 88 stores in eastern Massachusetts, with those prices set to roll out to all 116 stores statewide by the end of the month. The cuts bring everyday staples much closer to Market Basket’s pricing.

The announcement comes with less than one week to a “mediation session” between Demoulas and the board of directors. It’s impossible not to believe the two are connected.

Stop & Shop knows that should Demoulas ultimately be fired at this meeting, there is the potential for a work stoppage and/or a boycott.

In a weird way, it also feels like the company is encouraging people to boycott Market Basket. One of the main reasons many have stated they wouldn’t boycott this time is because of higher prices elsewhere and the effects of inflation.

Even in 2014, when customers boycotted, a notable sight was receipts from competitors taped to the windows and doors of Market Basket’s stores. Those receipts didn’t just show how much money the company was losing — they showcased the major price discrepancies between Market Basket and its competitors.

Within two weeks of Arthur T’s side buying out the Arthur S. side, Market Basket was back to business as usual. Stores like Stop & Shop immediately lost out on the influx. This time, they appear to not only be welcoming and prepared for more business — they want to earn customer loyalty.

A Party Without Its Host

This past Friday, Market Basket celebrated the grand reopening of its location in North Andover, a remodeled store with 92,000 square feet, about 40% larger than before.

The three sisters who have been at the forefront of the effort to oust Arthur T. Demoulas were among those in attendance, greeting customers as their security stood closely by. So were their three appointed board members. It was a rare move, as none of them are known for visiting employees or being public faces.

Customers seemed impressed by the new location and its offerings, which include Market’s Kitchen hot food, a coffee and ice cream bar, sushi made in-store, a specialty butcher, and seating. Many left with full carts. It seemed like business as usual — except someone was missing.

Demoulas, the man who has continued to grow and shape the company since becoming CEO in 2008, was absent. Not only has he been the CEO for nearly two decades, he is also the largest individual shareholder with 28.4% of the company. He wasn’t seen, his name wasn’t spoken. It was as if he either didn’t matter or never existed in the first place.

Moments like this are meant to be celebratory, opportunities to show unity. His absence further shows just how deep the rift is, and how unlikely a positive outcome will be.

What Happens Next

There has been little indication about what will happen when the board formally dismisses Demoulas from his role as CEO. It also remains to be seen whether his two children, Telemachus (Mike) and Madeline will be allowed to rejoin the company or not.

If there were betting odds, the favorite to be Demoulas’s successor would be his nephew Mike Kettenbach, who is currently the company’s deli director. It could also be someone from outside the company, which the board hasn’t ruled out.

Kettenbach would likely struggle to gain the credibility and trust of the existing management at the 95 stores and at company headquarters, who have demonstrated unwavering loyalty through the years for Demoulas. However, it may be possible given his family connection, and his years of service with the company. Meanwhile, an outside CEO hire would likely never gain the trust or respect needed to do the job at all.

The fates of roughly 30,000 employees, their benefits, their retirements, and the wallets of customers hang in the balance.