TEWKSBURY, Mass. — The three newly elected members of the Demoulas Market Basket board of directors told employees that they have “moved thoughtfully” to improve corporate governance at the parent of Market Basket stores, and were committed to its “More For Your Dollar” philosophy.
The three independent directors — Keith Cowan, Nabil El-Hage and Ronald Weiner — were elected earlier this year after control of the board shifted to family shareholder Arthur S. Demoulas, cousin to the company’s chief executive officer, Arthur T. Demoulas. The board considered ousting Arthur T. earlier this year and has since hired an executive search firm.
In a memo sent late last week, the directors made no mention of potential executive changes but did say the board sought “the right team” to execute the grocer’s strategy. The message was likely prompted by employee uproar over changes the board enacted at its most recent meeting, including the payment of a $250 million special dividend, changes to trustees of the company’s profit-sharing plan, the executive search-firm engagement, and the establishment of a line of credit seen as a precursor to taking on new debt, according to sources briefed on the meeting.
Read more: Market Basket Said to Hire Executive Search Firm
“The new board has … adopted standards, policies and practices to improve corporate governance. It has formed and staffed board committees to focus on audit, compensation, governance, finance and real estate — all with a goal of ensuring that Market Basket has a sound strategy to grow its business and value, with the right team to execute the strategy and with the proper plans and capital structure to support future growth,” the memo said. “The board will also review business transactions for fairness to the company, particularly real estate and other transactions having an inherent conflict of interest for management.”
That remark likely references allegations that Arthur T. Demoulas steered real estate business toward companies controlled by his wife and other family members without board consent.
The memo acknowledged the dividend payment and the changing of profit-sharing trustees but said the dividend would not affect the company’s business or its capital budgets. The board said it was committed to continuing a profit-sharing plan but did not specify what if any changes it would seek to make beyond the new trustees.
Remarks on social media sites dedicated to supporting Arthur T. Demoulas indicate employees viewed the memo with skepticism.
“The board appreciates your strong and positive feelings toward Market Basket,” the memo added. “We, like you, want the best for Market Basket and are firmly committed to seeing Market Basket continue to thrive as New England’s leading grocery chain.”
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