Market Basket CEO Arthur T Demoulas placed on administrative leave by board of directors. Here's why

Arthur T Demoulas, the CEO of Market Basket, has been placed on paid administrative leave by the company's board of directors, reported CBS News. Demoulas has been suspended while his conduct is under investigation, the company's board said in a statement. Demoulas said two of his children and several other executives were also placed on leave and the investigation is a "farcical cover for a hostile takeover."

According to US media reports, in a letter to employees, the board's executive committee said that Demoulas and several other employees working with him were placed on leave because they believe Demoulas was planning "a disruption of the business and operations of Market Basket." The board members stated that they believed Demoulas intended to retaliate against them for insisting that he collaborate with the board on company operations and planning.

"We got information that there was potentially, plans to disrupt business. And mostly, I think, in retaliation for the pressure we were putting on Arthur to cooperate and collaborate with us," said Jay Hachigian, Market Basket chairman of the board.


In the letter, the board said that no jobs are in jeopardy and all benefits, including bonuses and profit-sharing, will remain in place.

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How did Arthur T. Demoulas's team respond?

The CEO's team fired back. His spokesperson called the move a "hostile takeover" by relatives and their board supporters, according to Boston.com. The Executive Board of Directors of the supermarket chain announced that Demoulas—widely known as "Artie T"—has been placed on paid administrative leave, effective immediately.

According to the board, they are investigating "credible allegations that Mr. Demoulas initiated plans to disrupt Market Basket’s business operations through a work stoppage."

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.

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"The company is currently operating at its peak performance and the notion that this board is going to conduct an investigation is a farcical cover for a hostile takeover," said Justine Griffin, Demoulas' spokesperson. The board said Wednesday that Demoulas, a minority shareholder, "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", reports CBS.

In 2014, Arthur T. Demoulas was ousted from Market Basket when the board, led by his cousin Arthur S. Demoulas, took control. The decision sparked a customer boycott and prompted widespread protests by the company’s non-union employees, who effectively went on strike.

The public pressure proved effective. Within weeks, a deal was struck for Arthur T. Demoulas to buy the Market Basket chain for nearly $1.6 billion, resolving the conflict.

According to a company spokesperson, Market Basket finished paying off the $1.6 billion in acquisition debt in December 2024. To commemorate the 10-year anniversary of the employee-led protests, Demoulas surprised workers last summer with bonus checks.