Mediation Could Decide Market Basket’s Leadership

The future of a popular supermarket chain's leadership could be determined through mediation. 

This week, the board of Market Basket began a mediation session in Delaware to determine whether the company's 70-year-old CEO, Arthur T. Demoulas, would be allowed to stay in charge.

According to a Boston Globe report, board members shoved Demoulas aside in May, putting him on paid administrative leave along with two of his children and several other officers of the company. If mediation succeeds, Demoulas might return with either a time limit on his role or other restrictions. If it fails, the board may need to face the challenge of replacing him.

As the Globe noted, the board placed Demoulas on leave to determine whether he was instigating a potential work stoppage at the supermarket chain to keep his job. In 2014, a similar scenario took place within the company before Demoulas and his sisters bought out another family group from the business.

The Globe reported that Demoulas has been sparring with his three sisters over control of the company. His sisters own 60% of Market Basket and control the board. Demoulas controls another 28%. 

Tempers have flared over succession plans. Demoulas wants two of his children, T.A. and Madeline, to succeed him. He also wants to have financial information shared with the board and distribute excess profits to his family members.

Over the last several months, tensions between Demoulas and his family have continued to rise after two of his lieutenants, Joe Schmidt and Tom Gordon, were fired. The last of the board members who aligned with Demoulas, Bill Shea, was dismissed.

"Perhaps some middle ground can be reached: He [Demoulas] could be brought back for a limited time — say, for a certain number of years — in part to allow for a proper succession plan to take shape," wrote the Globe's Jon Chesto. "Maybe, in mediation, the two sides could reach an agreement over what exactly Demoulas needs to do to restore a professional relationship with the board, even if it's not a particularly personable one."