Market Basket board places CEO Arthur T. Demoulas and 5 others on paid leave

The Market Basket board placed its chief executive and five other employees on paid administrative leave Wednesday, amid the latest family battle for control at the popular grocery chain.

The board's executive committee allege that CEO Arthur T. Demoulas and others were preparing a work stoppage "as improper retaliation" for board directives.

"Some have made the analogy that it's as if the CEO was holding the company hostage," said Steven Collins, a Market Basket board member and private equity executive. He said the board has launched an investigation into the allegations against Demoulas.

In an interview, Collins said the dispute has been simmering for some time because of concerns Demoulas was making decisions unilaterally, including preparing his children to potentially succeed him when the 70-year-old chief executive eventually retires.

Justine Griffin, a spokesperson for Demoulas, said his daughter and son were among the Market Basket executives placed on leave. Griffin said Demoulas’ three sisters and their three appointed board members were responsible for placing the CEO on leave.

“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,” Griffin said in a statement.

Collins said the board gave Demoulas a list of requests last year, such as creating an annual budget and giving the board more input into capital expenditures and succession planning.

"Not a single one was met," Collins said.

Demoulas will receive his full salary and share in company distributions while he is on leave, according to a statement from the board. Company officials said workers will not experience any salary or benefit changes, and a popular profit-sharing plan — a point of contention in prior Market Basket fights — will remain in place.

The Demoulas family founded Market Basket, which now has more than 90 stores in New England, a century ago in Lowell. Over the years, family factions have fought over control of the company in court and in the public arena.

In 2014, the board removed Arthur T. Demoulas — a popular figure among workers — prompting a massive backlash including walkouts, protests and boycotts. That kerfuffle ended with Arthur T. and siblings buying out their cousin, Arthur S. Demoulas. The group took on $1.6 billion in debt to finance the purchase, which was paid off last year.

Demoulas now owns 28% of the company, while his three sisters control 60%. The remainder is owned by a family trust.

Collins argued the latest battle boils down to a run-of-the-mill dispute between a board and a chief executive.

But he said the situation is unusual in the passion that employees and customers have for the company, giving the public a large stake in the outcome.

"I think this is unique because Market Basket is such a tremendous company and means so much to people," he said.

But Collins argued the fight does not involve customers or most workers. " It's really one individual," he said.

Collins said he does not believe the dispute will impact customers, but could not say how long the investigation will take.

With reporting from Chris Lisinski of the State House News Service.