Frequently Asked Questions

Answers to frequently asked questions about corporate governance of Demoulas Super Markets. (Updated as of 1/9/2014)

Who are the directors on the Demoulas Super Markets Board?

Currently, the Board consists of seven members. The two “Class A” directors are Arthur S. Demoulas and Gerard Levins. The two “Class B” directors are William Shea and J. Terence Carleton. The three “Class A/B” directors are Keith Cowan, Ronald Weiner and Eric Gebaide.

Each of the current A/B directors was duly elected and has been deemed independent under the NYSE rules by both the Company’s Audit Committee and the full Board. Subsequently, in September 2013, the Massachusetts Suffolk County Superior Court affirmed the standards of independence applicable to the A/B directors, and rejected a challenge to the qualification of the current Chairman of the Board. Click here to read the Court’s ruling.

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What is the Board’s role?

It is the Board’s desire and intent to try to work cooperatively with the management team to achieve the goal of Market Basket’s “More for Your Dollar” philosophy. The Board selects, oversees and monitors the performance of the Company’s senior management. The Board also has the fiduciary duty and responsibility to exercise its business judgment on matters of critical and long-term significance to the Company based on what it believes to be in the best interest of the Company and its shareholders.

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Has the Board made changes in corporate governance?

Yes. We have adopted standards, policies and practices to improve corporate governance, limit or avoid conflict of interest transactions and help the Board fulfill its responsibilities of serving the best interests of the Company for the benefit of the shareholders. Accordingly, the Board has implemented policies and procedures to oversee and evaluate the Company’s business operations and management’s performance.

The Board now has six permanent committees: an Audit Committee, a Compensation Committee, a Governance Committee, a Finance Committee, an Investment Committee and a Real Estate Committee, and may add or eliminate committees to serve what we determine to be the best interest of the Company and shareholders. Management periodically reports to the Board or these committees. While all major decisions will be considered by the Board as a whole, having committees to help review, audit and oversee the performance of the organization is appropriate to help keep the Board informed and to advance good corporate governance.

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Is the Board committed to Market Basket’s “More for Your Dollar” philosophy?


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There has been much speculation about Arthur T. Demoulas’ role as President, has the Board made any decisions in this regard?

Arthur T. Demoulas is the President of Market Basket, and the Board is not currently looking for a new President. Under the Company’s Bylaws, the role of the President is to report to the Board and to manage the general day-to-day operations of the business. His responsibilities include purchasing, pricing, customer satisfaction and employee training and retention.

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Why has an executive search firm been retained?

It is a Board’s responsibility, and our intent, to assure that both corporate succession planning and the identification and development of additional executive talent is an integral part of long-term planning for the growth of Market Basket. To fulfill this obligation, the Board has retained an executive search firm to assist in identifying qualified potential candidates from outside the organization.

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Has the Board made changes to associate pay or benefits?


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Does the Company intend to continue to contribute to the profit sharing plan?

Yes. The Board voted unanimously to make a contribution to the profit sharing plan at a level consistent with what it has been for the past several years. In an effort to further reward associates, the Board began a process for selecting nationally recognized investment advisors to professionally manage the funds in the profit sharing plan with the objective of attaining a better return than the plan generated over the recent past (relative to the market performance).

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May participants in the profit sharing plan continue to request hardship withdrawals?

Yes. Those requests may continue to be made through Don Mulligan and Company management.

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Will the planned development of store locations in Waltham and Revere proceed? Will other planned store openings still take place?

The Board has asked management to open Attleboro, and authorized management to sign a lease that would allow the Waltham project to proceed. However, as for other projects, there are issues that still need to be addressed and resolved by management prior to approval by the Board.

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Are there plans to have the Company take on more debt?

There are no current plans to take on more debt. Market Basket has adequate cash to continue to expand its operations and make capital improvements to its existing stores. The Board will continue to assess opportunities to raise debt in the capital markets as it determines what capital structure is in the best interest of the Company and shareholders.

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Why are dividends paid out to DSM shareholders?

It is a common practice for companies to pay regular dividends and make special distributions of cash that is accumulated in excess of a company’s projected needs. All dividends are paid to DSM shareholders based on the number of shares they each respectively own.

DSM shareholders are the owners of the Company, which is a “Subchapter S” corporation for income tax purposes.  As such, the taxable income of the corporation is allocated to the shareholders, and the individual shareholders are responsible for paying the income taxes on the profits of the Company. As a further result, any subsequent dividend of the accumulated profits is “tax free” when distributed to the shareholders (since the profits were already deemed to be earned by the shareholders and already taxed to them).  Therefore, it is entirely appropriate to pay out, as a cash dividend, all accumulated profits in excess of the cash needs of the Company. 

Over the years, the Company has accumulated cash in excess of its needs as determined by management.  Accordingly a dividend was paid out to the shareholders. In September 2013, the Massachusetts Superior Court refused to stop the Company’s right to make such dividend distributions to DSM shareholders, and that decision can be read here.

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Will the Company continue to meet its financial and operational needs after any dividend payments to shareholders?

Yes. Market Basket will meet all of its financial and operational needs. Payment of dividends does not affect the Company’s ability to open new stores or make improvements to existing stores.

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Why doesn’t the Board respond to all public statements made by management or emails from associates and customers?

It is the Board’s desire to try to work cooperatively with management. When a member of management decides to make public statements about corporate governance or the business, the Board will make every effort to respond as appropriate and address the issue privately with management.

It is management’s responsibility (not the Board’s) to respond to questions from Market Basket associates or customers. In doing so, we are optimistic that management will provide accurate and timely responses, while respecting their corporate confidentiality obligations.

However, in cases where members of management make allegations against the Board, it may be appropriate to respond publicly, even though the Board has no legal or other obligation to respond.

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